Smart money weekly; Russia and what it means for your money, painful money gaps, setting up after living abroad, and how to put an inheritance to work

Ben Nash

Hey team,

Happy Monday.

Things took a turn for the worse on Thursday when the disturbing news hit late afternoon that Russia had started to invade Ukraine. This is deeply alarming on a number of fronts and I’ll leave the reporting up to the general media, but this opportunity to focus on the money aspects for you.

The global economy plunged by late Thursday afternoon, with the ASX down 3%, the worst fall in 18 months. For those of you holding US stocks, particularly single stock holding, this would have been felt much harder. With Russia being an energy powerhouse, other effects are the price at the petrol pump and this will likely trickle into rising gas costs due to potential supply diversions.

So what does this all mean for most of you? For most, sit tight. These are uncertain times, but history will show that as long as you can, wait it out. If you’re sitting on a bunch of cash, depending on your cash flow position, consider investing while the reality is the market is quite low. Before you do anything, do your research or seek advice. But if you’re looking for a sign, this is it.

Smart Money upside #57
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.

Couple; late 30’s, income ~$300k, total assets ~$4m, savings~ $20k annually

We find the topic of finances confusing and there is an information overload, which is overwhelming for us. We’re generally busy people, with high performing roles and want an ability to focus on our family outside of work. We are not super clear on a plan or what a good outcome looks like for us.

What they wanted from us / the advice process
Clarification on a financial strategy and plan for the future. A clear plan to grow our wealth, something we can work towards and know our money is working hard for us.

What success looks like for them
Have confidence in our finances and know exactly what to do with our money and how it works for us. We want to feel more empowered with our finances and confident that they can meet our children’s education needs and enable us to give them rich experiences. We want an effective use of funds received from a payout this year and feel confident that we have maximised the opportunity. Ultimately a financial plan that provides them with structure and security for their family.

What money strategy they were following before we went through the planning process
Savings structure with little else.

What money strategy they chose to pursue from our planning work
Financial plan, structured bank and cash accounts, purchase of an investment property and investments that are both ethical and meet our long term risk profiles.

Key benefits of going through the process
A clear structure was put in place, and we have more confidence with how our money is working for us. We are more educated about strategies and ways to utilise structure, and investments to save money and grow our wealth.

Value of advice after all advice fees year one: $56,016
Year 20 upside after advice fees: $4,418,078

If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.

Share market wrap
US and Australian 10-year government bonds rallied on Thursday as investors rushed for shelter against the backdrop of escalating geopolitical tensions in Europe. Bitcoin is following the general market downturn and by Thursday afternoon continuing to drop.

Key sharemarket numbers:

  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week  -0.30% lower than last Friday, on 7,276.40 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week -3.75% lower than last week, at 4,288.70 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -3.79% lower than last week, at 13,473.58 points.
  • The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -4.32% lower than last week (Friday AEDT), at 7,207.38
  • The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 4,414.32 for the month, down -0.50% for the month to date

Investment story of the week: PEXA (ASX:PXA)
PEXA is an electronic conveyancing company with arguably a near-monopoly on the market. The company boasts that 80% of all real estate transactions in Australia are conducted through PEXA. As the cost of using its service is passed on from its customer base (lawyers and real estate agents) to their clients as a business cost, PEXA is somewhat immune to any potential price-based competition.
The boost in revenue and strong outlook that’s seeing the PEXA share price lift off this week was helped by a 37% increase in PEXA Exchange transactions during the half, which reached 2.1 million. The company also reported that it has now facilitated more than 10 million property transactions since launching. Those transactions are worth more than $2 trillion. During the 1H FY22, PEXA Insights also launched its first two products. These are designed to help improve financial institution efficiency. On the international expansion front, the company said that “momentum continues to build in PEXA International”, reporting “significant progress” during the half-year with its United Kingdom market entry strategy. Keep an eye out for this exciting company in 2022.

Giving update of the week
At Pivot we’re passionate about the benefits of having a solid education in all important areas of life (money included), so we’ve celebrated by providing 100 children with access to life-changing e-learning education and training. 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.

Upcoming events: 

We have a huge new series of events coming up over the next few months. From saving to building a second income, it’s all here for you. Even if you can’t make the times, click through to register and we’ll send over a recording:

Event schedule and links to book here:

Money Hack of the week: How to spot gaps in your financial management.
Do you know where you’re going wrong on your financial journey? It’s easy to get caught up in the daily grind and lose focus of what’s happening with your money. Luke Olsen realised that he didn’t know what he didn’t know about his portfolio. Everything changed once he had the Pivot Wealth team to hold him accountable. Check out our full chat here.

Money mistake of the week: Focusing on fantasy when determining value in the housing market.
Not all properties are created equal. So, are you reading too much into the statistics of your potential investment? On the podcast, Chris Gray and I talked about where the value lies in property investing and why we need to rely on more “real-life realities” vs. predictions and market shifts if you want to make money in real estate. Check out our full chat here.

Jargon Buster of the Week: Liquidity (Canstar)
The ease with which an asset or security can be quickly bought/sold at its intrinsic value on the marketplace aka. The ease of converting it into cash. For example, savings accounts are highly liquid. An investment property, on the other hand, has low liquidity.

Podcast from last week:  #157 Money chat w. Christine & Walter – How to set up your money after living overseas
In this session, I chat with a couple of our lovely clients, Christine and Walter about their money journey. They returned after leaving the US a bunch of times and came back wanting to get on the front foot with their money. We talked about the journey, how they tackled their planning and some of the things that surprised them about the process.

These guys did a really great job of leaning into the decision-making and conversations that happen around the planning process. And what that actually translated to in terms of the decisions that they made and the outcomes that they’re working towards as well as some of the things that they’re excited about.

Be awesome,


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.