This week we’ve been diving deep into some of the psychology that drives our money choices on our podcast, and I’ve personally learned a bunch from the guests we’ve had on. We’ve also been chatting all things crypto in the wake of the recent market movements. Stay tuned over the next couple of weeks to get the gold straight into your earbuds.
Money hack of the week: Understanding the first home buying process
Being in the market as a first home buyer is fking daunting. The fear of making a mistake can leave you paralysed and unable to make a decision. But, Information is the resolution of uncertainty. I chatted to Pivot Wealth client Oliver about his experience as a first-time homebuyer. Without the support from Pivot and our strategies for making the best decisions, Oliver would still be confused and overwhelmed by the process. To listen to my chat with Oliver, click the link below: Check out the full chat here.
Share market wrap
This week saw the Australian share market reach another record high, off the back of better than expected employment data and the US continuing to pump money into financial markets through its bond-buying program.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 0.94% higher than last Friday, on 7,624.30 points.
- The US ‘S&P500’ (Top 500 shares in America) finished the week 0.60% lower than last week (Friday AEDT), on 4,221.86 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 0.53% higher than last week (Friday AEDT), on 14,158.22 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 0.93% higher than last week (Friday AEDT), at 7154.07
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at – 1.81% for the month, down 3,942.23% from last week
Investment story of the week: Zip Co (ASX:Z1P)
Zip Co is back in the spotlight this week off the back of some solid earnings data and strong spending coming out of the COVID pandemic, up 57.45% in the last 6 months. As the buy now pay later trend becomes part of everyday life, one to watch in the new financial year.
Money mistake of the week: Not looking ahead to drive motivation for high achievers
You wouldn’t go to an insurance broker for advice on how to invest your money. So, if you want to earn more in the long-run, you need someone who’ll leverage every aspect of your finances. During my chat with Pivot Wealth client Clare, we talk about her surprise at how deep we dived with her finances and how she’s gained the motivation to aim for bigger goals. She’s now out of the financial fog and feeling optimistic about her future. Check out the full story here.
In the news
In Australia we pay a lot of tax. ABS data shows the average income earner pays $21,246 of income tax alone. But while tax is important, you don’t want your annual donation to the ATO to be any bigger than it needs to be. Because the tax rules are complex, it’s easy to make mistakes. One of the biggest tax mistakes I see is one that’s hidden below the surface. It often goes unnoticed for years, but when discovered it can cost you tens or hundreds of thousands, if not millions. I downloaded my top tax tips for news.com.au, check out the full story here.
Jargon Buster of the Week: Derivatives (via Morgan Stanley)
A contract whose value is based on the performance of an underlying financial asset, index, or another instrument (i.e., options and futures on various securities or commodities).
Podcast from last week: #118 Pivot client story w. Nicola – How to maximise my employee share program to get ahead
In this episode, I chat with one of our lovely clients, Nicola, who has recently gone through the financial planning process. She talks about how she got on top of her employer’s share plan. She works for one of the big tech companies and some of the light bulb moments that came around her frustration around seeing her money doing nothing and what sort of prompted her to take action there as well as the education and I suppose financial fitness came as a result of taking the time to really understand the high-level parts of her money for someone that’s really not that interested and what shifts that had in her mindset.
Giving update of the week
This week we’ve had the privilege of starting work with a bunch of new clients, and we’ve celebrated by providing 100 underprivileged people in Africa with 365 days of access to clean, life-saving water. 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).
Smart Money upside #22 – Building assets outside of super and getting set for retirement
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.
Individual, late 50’s, household income ~$300k, Cash ~$100k, total assets ~$700k, saving $10k annually
Unclear about his retirement strategy which is in 7 years time – whether he should buy a property or contribute to a ETF or Super.
What they wanted from us / the advice process
Guidance on what is achievable and how to action that plan.
What money strategy they were following before we went through the planning process
Nothing really. Had a pile of credit card debt, personal loans and a small ETF portfolio without a clear investment strategy. He is maxing his concessional contributions which is a default due to his income – not a conscious decision.
What money strategy they chose to pursue from our planning work
Going to try to save the deposit funds for the home purchase in the next 2-3 years. We will be paying off their debt in the first few months which will free up around $31k per annum in repayments. We will get rid of the credit card.
Key benefits of going through the process
Clear plan and insight into what is possible.
Value of advice after all advice fees year one: $31,380
Year 20 upside after advice fees: $479,744
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
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.
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