Smart money weekly; market bubble burst, how to invest, tax savings via super

Ben Nash

Hey team,

Happy Monday.

Rising oil prices were a hot topic in Friday’s morning news. Recent hikes at Aussie petrol pumps are linked to global oil prices, which have risen steadily over the past two years. In fact, since December 2020, the price of oil has more than quadrupled. Which all begs the question, where is the price of oil going in 2022? And what does it mean for Aussie households and consumers? Oil will soon bust through the US $100 a barrel mark, Mr Dhar forecasts, which will drive up petrol prices and potentially raise the cost of food and other goods.

Over time, everything changes and maybe spending habits and reactions to inflation have as well. For example, households are spending a record low amount of disposable income to service debt, and higher fuel prices are also apparently not as relevant with spending on motor fuels currently half of what it was in the 2010s. Inflation can’t be ignored entirely as lower-income families are struggling with higher prices.

Smart Money upside #56
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; mid 20’s, income ~$77k, total assets ~130k savings~ $2k annually

Having more money available than ever before, but not utilising it properly and no clear strategy in place.

What they wanted from us / the advice process
Have a plan – something clear and easy to follow, understand property investing and how it can help. Additionally, ensure super money is working hard.

What success looks like for them
Not needing to compromise on lifestyle, and owning a property.

What money strategy they were following before we went through the planning process
No clear plan in place, savings in cash and sporadic investments with no strategy.

What money strategy they chose to pursue from our planning work
Structured banking accounts, investing over the long term in investment properties and a diversified share portfolio.

Key benefits of going through the process
Support from an adviser who can create a financial plan that allows them to utilise their funds appropriately, and provide the education and guidance they are after in order to create a plan.

Value of advice after all advice fees year one: $23,480
Year 20 upside after advice fees: $1,485,322

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 family is all-important, which extends to our fur babies alongside our humanoid relatives. So we celebrated our furry friends by providing education on effective animal care to families in Nepal. 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.

Upcoming events:
Our Employer Share Event series just wrapped, but don’t forget to jump onto my YouTube to catch up if you missed it. We have one more event coming up and we’ll launch a bunch of new ones across the next few weeks so keep an eye out. Here is our final event that’s coming up this month, click through to register:

Event schedule and links to book here:
How to invest if you’re saving more than $5k monthly: Thursday, Feb 24, 12pm

Money Hack of the week: Why you need to set goals and create habits.
If there’s one thing we’re familiar with since the pandemic began, it’s changed! But, how does Chris Muddell use tactics to build relationships and navigate such rapid changes in his work? He creates habits and sets goals. Check out our full chat here.

Share market wrap
It’s earnings season again and it’s been pretty dismal with results coming out so far. Telstra, Wesfarmers, Star Entertainment and many more are all reporting losses. Across the ditch, markets were essentially flat thanks to imminent geopolitical and monetary policy decisions influencing investors to wait and see what happens.

Key sharemarket numbers:

  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week  0.30% higher than last Friday, on 7,539.80 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week -2.80% lower than last week, at 4,380.26 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -3.49% lower than last week, at 13,716.72 points.
  • The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -1.87% lower than last week (Friday AEDT), at 7,537.37
  • The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 4,445.2We 9 for the month, down 6.80% for the month to date

Investment story of the week: X2M Connected Ltd (ASX: X2M)
X2M is a technology company that uses the internet to deliver productivity improvements, cost savings and improved public safety to enterprise and government customers. X2M’s current focus is servicing the utility sector in the APAC utility market through technology that connects devices online, such as water meters and gas pressure sensors and enables data exchange and control of these devices. X2M uses its patent-protected two-way, distributed intelligence solution to address the problems that utilities, local government and enterprise customers face in an efficient and cost-effective manner. The share price rocketed up 23% on Thursday, on the back of the company continuing to strengthen its relationship with Korea Water Resources Corporation, and with its customers. Despite a poor 2021 on the stock market, compounded by covid, the optimism around the company and their continued desire to grow may result in a much more promising 2022.

Money mistake of the week: How the financial loans market was failing.
Tell me, what’s your record for being put on hold by a customer service rep? 30 mins, 1 hour? It’s time for businesses to take a step back, have a good, hard look at their customers’ needs and find a way to create better experiences. Shaun Lordan from Nano Home Loans spoke with me about the gaps in the loans market and how Nano’s advancements are the solution to provide their customers with seamless services. Check out our full chat here.

In the news: Trick to save $2658 tax a month via superannuation
I get it – superannuation is boring and something you shouldn’t really need to think much about until you’re pretty old, so what’s the point? Many younger Aussies fall into this thinking trap and cost themselves a bunch of money as a result. Read on to find out tricks to save you precious tax dollars via your super.

Jargon Buster of the Week: CHINESE WALL (Via Morgan Stanley)
Imaginary barrier restricting the flow of information between the Public side of the business (e.g. Sales and Trading) and the Private side (e.g. Investment Banking).

Podcast from last week:  #156 How to cut your tax bill by $100k+ using trusts
In this session, I put together all about trusts and how they can be used to save you a ton of money when you invest.

I get a lot of questions about this so I wanted to unpack the key things that you need to know about how trusts work, how they can save you tax, where they are helpful when they’re less helpful, as well as some of the trust mistakes to look out for and things to avoid if you go down this path. Also, the key questions that you need to ask, to know if a trust might be helpful to grow your investments, assets, and wealth faster.


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.