Hey team
Happy Monday.
It’s been a big week at Pivot and I’ve got a stack to share.
Firstly, I’m incredibly humbled to have been nominated for inclusion in Financial Standard’s list of the 50 most influential financial advisers in Australia. Looking at the amazing talent on this list I have an overwhelming sense of positivity for Aussies looking for financial advice. BUT I NEED YOUR HELP. Voting is now open for the power 50 lists, and I’d love your help to make the cut by voting for me through this link.
Second, we’re giving the gift of free support from a Pivot Adviser as part of our August birthday celebrations. We want to help people that have been impacted by COVID so if you or someone you know has been dealt a rough hand we’d love to do our bit. This is no strings attached free help from us and we’re keen to see what help, but we only have a limited number of places so get in quick. To apply we need you to answer six super short questions to complete to apply for the sessions here. Everything including the application is totally confidential, and won’t be added to marketing lists etc – we just want to help.
Giving update of the week
A massive thank you to all the peeps that have got behind our 1-1 Money Breakthrough sessions, through August alone with the support of you we’ve just cracked 1 million impacts, providing life-saving water for families around the world. Would love to see how far we can push this over the rest of August, so if you’re keen to up your money game and do some good on the planet at the same time you can get around the sessions here. You can read more about our business giving here.
Upcoming events:
Make More Money: Personal Investing 101 – Thursday 2nd September 11:30 am – 12:30 pm AEST
Finding the right investment for you – Thursday 16th September 11:30 am – 12:30 pm AEST
How to be smarter with money – Thursday 14th October 11:30 am – 12:30 pm AEST
Avoid key money mistakes – Thursday 4th November 11:30 am – 12:30 pm AEST
Money Hack of the week: Why your goals mightn’t be as far away as you think.
Sometimes focusing on debt can get in the way of you focusing on what’s important. Your goals may not be as far away as you think. In this episode of How To Be Successful With Money, I sat down with Pivot Wealth client Clare to discuss what changed after joining us. She realised her focus shouldn’t be on paying off debt but on having a more planned approach to her financial goals. Check out our full chat here.
Share market wrap
The ASX finished down this week with the biggest announcement being the BHP and Woodside Petroleum merger. Less news, more gossip from Wall St, but for those of you that are fans of The Big Short; Michael Burry is betting against Cathie Wood’s ARK Innovation ETF which caused a flurry on Twitter. And in Crypto updates, Mark Cuban and Elon Musk have come together to spruik Dogecoin this week, helping push the price up.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -2.2% lower than last Friday, on 7,725.10 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week -1.32% lower than last week (Friday AEDT), at 4,405.80 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -1.9224% lower than last week (Friday AEDT), on 14,541.79 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -1.94% lower than last week (Friday AEDT), at 7,058.86%
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 21.61% for the month, up 5,000.33% from last year
Investment story of the week: Inghams Group Ltd (ASX: ING)
Ingham’s provided its results for the year on Friday with some good news. Solid sales volumes throughout the year underpinned their earnings figures with reported core poultry volume growth of 4.2% with overall trading volume now ahead of COVID-19 trading levels. This, combined with operational efficiencies, net feed cost benefits and frozen poultry inventory reductions, helped boost earnings. Total dividends were 16.5 cents per share. Winner winner, chicken dinner.
Money mistake of the week: Are you making this big investing mistake?
You shouldn’t judge a book by its cover, so why would you judge a fund’s ethics by its marketing? Kevin McDonald and I discussed this and the other big mistakes investors make when choosing ethical funds without proper research. Check out our full chat through the link here.
Jargon Buster of the Week: CONVERTIBLE BONDS (via Morgan Stanley)
Corporate securities (usually preferred shares or bonds) that are exchangeable for a set number of another form (usually common shares) at a fixed price.
Podcast from last week: #129 Pivot client story w. Hannah – How to navigate a career change without disrupting the financial position
In this episode, I chat with one of our lovely clients, Hannah, who moved on from one of the big tech firms not too long ago.
She talks about how the planning works that we did gave her the confidence to be able to do that and to do it in a way where she felt confident that she wasn’t going to sabotage her financial future.
We talk about employee share plans and how she tackled that, how it’s so easy for your money to end up in a mess and not to be clear on where things are, even if you’re a really kick-butt professional, smart person and how you can avoid that, or I suppose, at least how she tackled it. She also, uh, dealt me a cutting insult about financial planners being similar to dentists, but why that’s actually important, it was a good chat.
Smart Money upside #31
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
Couple, early 30’s; household income ~ 520k; total assets ~ 1.1m; with Investment property; savings ~ $7k annually
Frustrations
- No plan in place
- Not sure what’s the correct path forward is
- Good income but unsure if we are maximising them
- Paying too much tax
What they wanted from us / the advice process
Advice on what to do with cash and investments holdings
What success looks like for them
- Having a clear plan in place
- Knowing that our money is working harder for us
- Maximising our opportunities (income, savings, investments)
- Making good progression on paying down our debt
- Early retirement ideally
- Have another investment property
What money strategy they were following before we went through the planning process
- No clear plan for RSUs or shares, saving money in cash but not allocated properly (large lump sums sitting in a bank account and not offset for no purpose)
- No plan for managing tax implications of high income and employee shares
What money strategy they chose to pursue from our planning work
- Setting up a discretionary trust, buying an investment property in the next 12 months ($750k), Transfer a portion of employer shares into trust, sell a portion of shares and reinvest 50% of proceeds into a diversified portfolio via trust. The remaining 50% of proceeds will be used to pay down debt.
- Swap super to low-cost funds with passive index investments matching high growth.
Key benefits of going through the process
- Have a clear plan in place
- Effective management of RSUs will prevent nasty tax bills
- Investing via trust will allow income and gains to be distributed to the most tax-effective beneficiaries as needed.
- Peace of mind in knowing that their money and investments are allocated appropriately
Value of advice after all advice fees year one: $40,225
Year 20 upside after advice fees: $1,118,765
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 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.