In the news this week, Governor of the RBA Philip Lowe addressed the Press Club and refused to pinpoint when interest rates will rise, but noted it’s “a plausible scenario” that the cash rate could be increased in 2022. The RBA was “prepared to be patient” before raising rates, but there were scenarios that could see interest rates rising in 2022. As mentioned in the previous week, if you’re running a fine line with mortgage stress, now is a good time to chat with your broker or bank.
Across the ditch, Facebook parent company Meta slumped more than 26 percent in one day last week, erasing more than $US237 billion in market value, the largest one-day drop in history. The effects of this were felt across tech stocks and through to the ASX. It’s an interesting time to explore stocks if you’ve been holding onto cash waiting for ‘a sign’.
Smart Money upside #54
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 ~$115k, total assets ~220k, savings~ $3k annually
Feeling paralysed with information overload and fear of doing the wrong thing. No strategy or understanding of how their money can work for me. Overall inaction and a feeling of inadequacy.
What they wanted from us / the advice process
Set up a savings plan to help fund an ideal lifestyle, have a plan – something clear and easy to follow, learn how to leverage the tax and investment rules, understand property investing and how it can help them.
What success looks like for them
Buying a property to live in, and having assets that are working hard. An overall feeling of confidence around a plan and to be secure in their finances. A pathway for growth and consistent awareness of their money and overall finances. An ability to donate 10% to philanthropic causes, increase financial literacy and be confident in their super and how this will track in the future.
What money strategy they were following before we went through the planning process
What money strategy they chose to pursue from our planning work
Purchase of an investment property and a rentvesting strategy.
Key benefits of going through the process
Having a clear and thought out savings plan and budget, while also starting to build their net worth through investments. Superannuation to match their ethical mandate while also being appropriately invested based on their risk profile.
Value of advice after all advice fees year one: – $5734
Year 20 upside after advice fees: $986,799
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 one of our amazing clients had a baby, so we’ve celebrated by helping 100 women in Kenya with desperately needed medical support and childbirth assistance. 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.
Our employer share plan events have kicked off, so jump onto my YouTube channel to grab the recording if you missed it. If you can’t make the time for the upcoming events, still register and the recording will be emailed you to straight after the session. Check out the full list of events that are coming up and click through to register:
Event schedule and links to book here:
- How employer share plans work (deep dive): Monday, Feb 7, 2022, 2pm
- Employer share plan tax hacks and mistakes to avoid Thursday, Feb 10, 12pm
- How to make more profit from your employer share plan Tuesday, Feb 16, 2022, 10:30am
- How to invest if you’re saving more than $5k monthly: Thursday, Feb 24, 12pm
Money Hack of the week: How to tackle a big financial decision.
All too often, we get stuck in the rut of indecision. Especially when it comes to investing. In this episode of How To Be Successful With Money, Lynne Cazaly and I chatted about WHY. It turns out, the more meaning we attribute to a decision, the harder it can be to process it. Her solution? It’s easier than you think. Check out our full chat here.
Share market wrap
Shares of Facebook parent Meta Platforms plunged 27 per cent in an epic rout that, in its sheer scale, is unlike anything Wall Street or Silicon Valley has ever seen. This sent the US tech stocks down marking uncertain times ahead. As a result, the ASX opened soft on Friday morning. Bitcoin continues to mirror the tech rout, remaining down this month.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 2.10% higher than last Friday, on 7,418.90 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week 1.55% higher than last week, at 4,500.53 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 2.07% higher than last week, at 14.098.01 points.
Investment story of the week: Nufarm (ASX:NUF)
Nufarm is an Australian agricultural chemical company headquartered in Melbourne, Australia. Established in 1956, the company holds more than 2,100 product registrations, and markets products in more than 100 countries around the world. The NUF share price strong week continued on Thursday, up 15.05% to $5.35. It followed 3 successive days of gains for the company. On Thursday, the shares were up by 22% since the beginning of the week. The substantial increase in the share price is on the back of the company’s trading update for Q1 FY22 and outlook. The highlights included: A substantial increase in revenue, favorable trading conditions and adjusted net working capital (ANWC)/sales remaining within target of 35-40%. NUF predicts its revenue could increase to more than $4 billion by FY26, due to its existing and upcoming products, and above market growth at an expected 2.3%. With strong growth to start the year, and very promising forecasts for its future, Nufarm is a company with a lot of potential for growth and one to look out for in 2022.
Money mistake of the week: Not being in control of your mindset and wellbeing.
Self-improvement starts from within. This might not be what you want to hear, but it’s time to swap the glass of wine for a notepad. Kym Power told me her advice for getting in control of your mindset. Acknowledging how you feel and working through your emotions can help you change your mindset and behaviours for the better. Check out our full chat here.
In the news: How to buy a property with no cash deposits
Saving a six-figure deposit is out of reach for most people but there is a way to buy without putting down any cash – there is a catch though. With the average time to save for a 20 per cent deposit in somewhere as expensive as Sydney taking 17 years, many people are looking for ways to get on the property ladder sooner. Check out my latest article in the news to find out how.
Jargon Buster of the Week: Combination loan (Via Mozo)
Combination loans are home loans that let you have two different types of loan in one. The most common combination loans are where a portion of the loan is on a fixed rate (e.g. 20%) and the remaning portion (e.g. 80%) is on a variable rate.
These sort of combination loans are also called ‘split loans’ and have the benefit of offering you some protection against rising interest rates, along with the flexibility of a variable rate loan. For instance, unlike a fully fixed rate loan where extra repayments are generally not alllowed, you can make extra repayments on the variable portion of a combination loan.
Podcast from last week: #153 WTF is financial advice
This episode is a recording of a live online session that I did on Personal Investing 101.
I talk about investing basics, investing tax on investments, some of the key considerations that you should be using the potential of investing at different levels regularly. Trade-offs the key considerations around investing and how to plan out an investing strategy as well as many investing mistakes and did a ton of Q and A from a whole bunch of cool different questions.
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.