Hey team,
Happy weekend.
Over the last week, I’ve been diving deep into the money mindset, the psychology that impacts money decision making, and some of the hacks you can use to make it easier to get the results you want. I enjoy all areas of money management, but it’s the mindset and thinking element that I’m most interested in so I had some fun diving deep into how flawed our thinking can actually get.
Awareness is the first step, so if you want to know what to look out for so you can avoid making these mindset mistakes you can check out the main money mindset flaws/tips/hacks on the podcast here; Apple, Spotify, Stitcher, Podbean.
Share market wrap
Tech shares were smashed this week in Australia and the US, with mixed economic signals and an uptick in the income return interest rate (yield) on big corporate bonds in the US leading to a move away from the recent market favourites including buy now pay later stocks Afterpay, Zip, Sezzle, and the big end of wall street down over $1 trillion for the week (with a ‘T’) 😵💰💥
Key markets numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 1.6% lower than last Friday, on 6,940.00 points.
- The US ‘S&P500’ (Top 500 shares in America) finished the week 1.96% lower than last Friday, on 3,811.15 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 3.83% lower than last Friday, on 13,192.35 points.
- The Global ‘All World’ index (measured with the iShares MSCI world index (all share markets around the world combined) finished the week 2.02% lower than last Friday, at 114.27
Investment story of the week
AMP Limited (ASX: AMP): Every Aussie’s favourite’ financial services company AMP’s has confirmed the acquisition by US firm Ares (NYSE: ARES) of 60% of their key assets. Unsurprisingly with new management and a new manager (and name on key assets), the market has given a slight nod that things are heading in the right direction with the share price up 11.11% this week. With the share price still down over 89% from their all-time high of almost $15 (currently $1.50), maybe a comeback is on the horizon…?
Money mistake of the week: Assorted money fk-ups we’ve seen in practice and how to avoid them
We sadly see more than our fair share of mistakes people make that cost them a bunch of money. In this post, I put together a few doozies so you can learn from others and avoid the pain (and cost) they experienced. Video here.
Weekly jargon buster – Alternative investment (via Morgan Stanley):
An alternative investment refers to a group of investment funds/structures/vehicles that can be anything from hedge funds to private equity funds, managed futures, real estate, etc. The key is that they’re not regular investments like cash, shares, and bonds.
Money hack of the week: Conserving your money willpower
We know almost everything that’s really important in life requires a solid amount of our willpower, read: money, health, weight, relationships… But everyone knows how hard it is to flex your willpower all day every day. So you need some hacks to make your life easier. If you do, you’ll get the important results you want faster, more easily, and with less stress. In this post, I cover how willpower works and what you can do to keep more of it to make your life better and easier. Check it here on; Apple, Spotify, Stitcher, Podbean video.
Podcast from last week: #81 Limiting beliefs and how they sabotage your money progress
Get around it on your podcast channel of choice here:
Smart Money upside #11: Scenario analysis, family planning, and buying a dream home
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.
Numbers/Background
A couple of early 30’s no kids, Household Income $300k, cash $360k, ~$150k shares
Frustrations when first coming to see us
Plan on how to maximise employer share plan, family home purchase seeming unattainable. No mechanism to validate decisions around a broader strategy.
What they wanted from us / the advice process
Building a second income stream through investing to reduce reliance on employment income. Maternity leave plan to start a family without going backwards, and a clear plan into the family home.
What money strategy they were following when we started working together
Saving in cash, a small amount of share investing.
What money strategy they chose to pursue our planning work
Buying family home ~$1.5m, set up money to have children and allow for maternity leave, planning around employer shares.
Key benefits of going through the process
Validation of strategy to give the confidence to execute, family/maternity leave plan, purchase a family home.
Year 1 potential upside: ~$0
Year 20 projected upside: ~$1.1m
Quantifiable value from strategies in the initial plan after all advice fees
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
Be awesome,
Ben
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.
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 to this email 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. Financial services guide.