4th July 2022

Smart money weekly; Market opportunities, property slowdown, EOFY wrap-up & 5 legal ways to pay less tax

Ben Nash

Hey team,

Happy Monday.

Another June 30 rolled on last week and FY 21/22 came to a close. What a wild year it’s been, particularly off the back of the lows and ultimate highs that graced us across 2020 and 2021, both across the markets and property. The Australian share market lost about 10 per cent of its value over the past financial year because of the war in Ukraine, the COVID-19 pandemic, supply chain disruption, high inflation, rising interest rates, and worries about a global recession.

The long and the short of it is – these global challenges aren’t going away and things might continue to feel uneasy. But now more than ever before, what I will continue to say to both followers and clients is, that now is a time of opportunity. For those that have a clear plan in place, I’m confident that you’re sleeping easy and the dreary news cycle isn’t phasing you. I’ll do a full EOFY wrap up in my In The Money News podcast this week.

In the words of Warren Buffet; “be fearful when others are greedy, and greedy when others are fearful.”

In the news: Five legal ways to pay a lot less tax
If you want your tax bill to be hundreds or even thousands of dollars less, I will reveal some easy ways to pay less. Check out the article here

Upcoming events:
Happy New Year! Well new financial year at least… Check out our upcoming events to kick start the new year with a bang. Early July we will kick off with smart ways to invest for this finanical year. Don’t leave it to the last minute again. See registration details below.

Event schedule and links to book here:

Share market wrap
The Australian equities market ended the 2022 financial year in the doghouse and is likely to stay there for some time given the excessive negative sentiment about inflation, rising interest rates and geopolitics. Bitcoin dip buyers are hoping things won’t get much worse for cryptocurrencies with very little positive news to share on that front.
Key sharemarket numbers:

  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -0.2% lower than last Friday, at 6,720.40 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week -3.71% lower than last week, at 3,768.11 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -5.66 % lower than last week, at 10,971.06 points.
  • The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -0.73% lower than last week (Friday AEDT) at 7,168.65 points.
  • The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 1,901.91 for the month, down -42.16% for the month to date

Investment story of the week: Collins Food (ASX: CKF)
Collins Food (ASX: CKF) has seen an 18% increase in the past 5 days (at time of writing) in their share price. Collins is Australia’s largest KFC franchisee with 261 outlets in the country. Notably they also 20 Taco Bells in Australia and another 62 KFC outlets internationally. They reported a 47% increase in net profit over the last financial year. However, given the current crisis with raw materials, inflation and rising costs of ingredients such as lettuce, there could be some vaolitiy. Keen to see where this one goes.

Smart Money upside #76
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; late 30’s with income of approximately $350K. Total assets worth $550k. Saving about $10K annually.

Frustrations

  • No savings or investments plan at all.
  • Overwhelmed with information.
  • Didn’t know where to begin

What they wanted from us / the advice process

  • A clear banking and saving structure
  • A plan with their employer shares, specifically RSU’s
  • Advice on property, a solid tax minimisation strategy, and a superannuation review

What success looks like for them

  • They wanted their money to be working harder
  • Have confidence  that they have put the right things in the right place for the future
  • Clarification over their home and tax minimisation strategies moving forward

What money strategy they were following before we went through the planning process

  • No plan in place

What money strategy they choose to pursue from our planning work

  • Upgrade their primary place of residence
  • Implement a strategy to have sufficient savings for their upcoming expenses
  • A strategy to deal with employer shares (RSU’s)
  • Purchasing an investment property in the long term
  • Appropriate superannuation review

Key benefits of going through the process

  • Education around tax, investments and RSU’s
  • A solid banking structure with a clear plan for the future
  • Knowledge of their financial trajectory

Value of advice after all advice fees year one: $53k
Year 20 upside after advice fees: $800k

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
This week we wanted to support the businesses that are keeping the economy moving through these challenging times, so we celebrated their amazing work by providing 15 microloans to support the growth of businesses in Zambia. 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: The quantifiable value of financial planning.
What do you actually get out of financial planning? In this chat, I talked to Chris about his experience with financial planning and the quantifiable value he’s enjoying from the process. From improvements in his mindset and personal confidence to, of course, the mathematics of financial planning, he’s no longer worried about his financial future. Check it out here

Money mistake of the week:  Ensure you prepare for your tax advisor.
How well does your tax advisor know your goals? I talked to Stuart Reynolds from Fullstack about the best way to get on the same page as your advisor. By outlining your goals, investments and income structure in a simple, one-pager (hello bullet points) and sending it to your advisor a few days before your appointment, you’ll help them understand the full potential of your tax structure. Easy-peasy! Full chat here

Jargon Buster of the Week: Construction loan (via Macquarie)
A loan which funds the construction or renovation of a property. The funds are released to the borrower in stages in line with the development of the property. This allows the borrower access to the funds as they need them so the borrower does not accrue interest on the entire loan until the whole amount of the loan has been released.

Podcast from last week:  #225 Money news in human words; Stamp duty gone, USD & AUD investing, ApplePay later & scam alert
In this episode, I covered the potential for stamp duty being abolished in New South Wales and whether now is a good time to buy U.S. investments based on the Aussie dollar being so weak along with some of the forecasts around where things are going.

We talked about Apple moving into Buy Now Pay Later (BNPL), some of the social commentaries around the massive rise in property prices not being reflected in inflation data and consumer price indexes. While addressing the fact that consumers are much further behind compared to what the numbers show.

I also talked about some recent scam activity, a warning for potential investors, and what the New South Wales public service strike off the back of a 3% wage increase means for wage growth across the broader economy.

This episode is perfect for anyone that wants to demystify the headlines,  understand how to cut through the noise and figure out what the money news means for them.

Helping people with this stuff is our jam, so if you want to chat about how to make your money success easier you can book an intro call with us here.

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, 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.