Smart money weekly; reserve bank updates, flat ASX, making the best decisions

Hey team,

Happy Monday.

While we’re constantly hearing about house prices continuing to rise, it’s not the only thing that’s on the up. Luxury goods have had astounding growth across the pandemic. Boats, Rolexes, and Chanel bags – all things commanding a much higher price tag post-pandemic. Luxury brands have taken the school of thought that while the rich are getting richer, let’s jack the prices up because, well…they can afford it more than ever. The pandemic has been a boom for new asset classes. Sneakerheads have turned Jordans and Yeezys into prized collectables. In some ways, the gamification of these assets leads to the allure. People are not just buying something precious/scarce, they’re confident that they can always resell it at a massive profit (exactly what is happening in some NFT circles for your crypto enthusiasts).

In the News: Foolproof money plan
The first and “most foundational” thing when it comes to savvy financial moves is to track your spending and savings via a budget. Speaking to news.com.au’s Andrew Bucklow, I shared the top six tips from our Cashed Up course to help you get your finances sorted. Click here to read more.

Money Hack of the week: Could you be more productive with your extra cash?
Lifestyle creeps: we’re all suckers for living above our means. Pivot Wealth client Emma treated her dog like a king before realising he probably didn’t care whether he got the $50 toy or the $10 one. Emma fell into the trap of unnecessary spending when she could’ve been investing that money or paying off her debt faster. Hear how Emma got back on track and how she feels now that she’s heading in the right direction with her finances. Check out our full chat here.

Share market wrap
On Thursday morning across the water, US stocks rallied after the Fed disclosed its response to high inflation. Fed officials voted to hold rates near zero but signalled they were ready to raise rates at least 3 times next year. On Thursday the S&P/ASX 200 fell 0.4 percent in its third consecutive daily decline, led by a 5.1 percent fall for the healthcare sector as shares in CSL fell following a large capital raise to secure an acquisition.

Key sharemarket numbers:

• The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -0.54% lower than last Friday, on 7626.20 points.
• The US ‘S&P 500’ (Top 500 shares in America) finished the week -1.9% lower than last week, at 4,620.64 points.
• The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -2.89% lower than last week, at 15,169.68 point

Investment story of the week: Hipages Group Holdings Ltd (ASX:HPG)
Hipages (HPG) is a leading Australian-based, technology and software as a service (SaaS) company focused on creating effortless solutions that help tradies streamline and grow their businesses. These include connecting tradies with residential and commercial consumers. There are currently over 30,000 tradies using the platform, underpinning strong sales growth and job volume. Goldman Sachs is very positive about the company and has a buy rating and a $5.15 price target on its shares. The broker believes Hipages is well-placed for growth thanks to its huge market opportunity and growing subscription revenues. In respect to the former, Goldman estimates the tradie marketplace’s total addressable market (TAM) is worth $110 billion per year. The company also announced the acquisition of New Zealand rival Builderscrack. This gives Hipages access to a NZ$26 billion TAM and 4,000 active tradies The Hipages share price has gained almost 60% so far in 2021

Money mistake of the week: Are you missing out on making the best decisions?
How many hours would it take you to do all your investment research and planning on your own? Now, could that time be spent on other priorities like your family, work or wellbeing? Pivot Wealth client Sarah and I chatted about the reason she turned to us for help. Check out our full chat here.

Jargon Buster of the Week: Debt consolidation (Via Mozo)
Debt consolidation is the process of combining multiple existing debts into one loan. Debt consolidation helps you get your debt under control by making one repayment each month instead of multiple repayments for different loans.

Smart Money upside #47
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 20’s, income ~$90k, total assets ~990k, savings $3k annually

Frustrations
Received a windfall and was uncertain how to allocate the funds. An overall fear of mucking up and analysis paralysis.

What they wanted from us / the advice process
How to invest the windfall and navigate the choices available

What success looks like for them
Buy a dream home, have a firm grasp on their finances. In particular structured banking and savings. Get educated on the dos and don’ts.

What money strategy they were following before we went through the planning process
Savings held in cash and sporadic investments with no strategy

What money strategy they chose to pursue from our planning work
Structured banking accounts, investing over the long term across investment properties and a diversified share portfolio.

Key benefits of going through the process
Support from an adviser who can keep them accountable and provide education and guidance.

Value of advice after all advice fees year one: $5,386
Year 20 upside after advice fees: $568,598

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’ve been working with a couple of new clients that are really passionate about sustainable investing, which has led me to think a lot about what’s happening on the planet and how we can have a positive impact. We’ve celebrated the time given by the amazing speakers we’ve had on the show by furthering our contribution to protecting Australia’s rainforests by protecting a further 500 square metres of rainforest to bring our total amount of conserved rainforest to 1,000 square metres. If you want to learn more about how you can have a positive impact on our planet by following the next few weeks on the podcast.  You can check out more information about our giving here.

Upcoming events:
We’re busy working on a bunch of new events for the new year. In the meantime, check out the full list of events that are coming up in 2022 and click through to register:

Event schedule and links to book here:

Podcast from last week:  #147 w. Stuart Reynolds – How to cut your tax bill + cryptocurrency tax planning
In this episode, I chat with Stewart Reynolds. He is an accountant by background and he’s the founder of an amazing business that helps people save tax dollars essentially.

He does a lot of work with cryptocurrency tax accounting as well. So I talked to Stewart about his tax tips and strategies where people go wrong when it comes to crypto tax, as well as some of the ways that people can go about planning and being smarter with their tax strategies.

It’s really an interesting chat.

Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm partnering with innovative entrepreneurs in the tech & online arena. He was also listed as Partner of the Year (finalist) in the 2020 Australian Accounting Awards.

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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.