Hey Team,
This week the federal government released the federal budget, which was a bit of a cash bonanza. We saw a boost to the first home super save scheme, tax cuts for households and businesses, and a huge boost to the childcare subsidies. Check out my recap of the key opportunities here.
Money hack of the week: You can’t argue with a spreadsheet
I spoke to Pivot Wealth clients Danny and Nikki about how a fairly basic spreadsheet helped them get a better perspective on how much they were wasting on unnecessary things, and how thinking at a high level helped people who were already on a good financial trajectory take their money game to the next level. Check out the full chat here.
Share market wrap
This week the markets were down off the back of reporting season and Australia’s mixed response to the federal budget.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 1.1% lower than last Friday, on 7,239.40 points.
- The US ‘S&P500’ (Top 500 shares in America) finished the week 1.3% lower than last Friday, on 4,232.60 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 1.91% lower than last Friday, on 13,429.98 points.
- The Global ‘All World’ index (measured with the iShares MSCI world index (all share markets around the world combined) finished the week 1.38% lower than last Friday, at 125.15
Money mistake of the week: Money mistakes of millionaires
The more money you have, the more costly your money mistakes become. Having seen inside how thousands of people manage their money, I’ve seen more millionaire money mistakes than most.
I’m unpacking some of the bigger and more common money mistakes of millionaires so you can learn the painful lessons from others, without having to make them for yourself. Check out the full story here.
Jargon Buster of the Week: Annual Average Percentage Rate (AAPR) – via Mozo:
AAPR stands for Average Annual Percentage Rate. It may sound like gobbledigook but is actually a handy tool that shows you the true cost of a home loan or personal loan. The AAPR takes into account introductory and ongoing interest rates, upfront fees, any ongoing fees and other factors not included in the ‘headline’ rate advertised by the lender.
Also known as the Comparison Rate, the AAPR helps borrowers compare loans side by side and see how fees and charges can impact the total cost of the loan. For example, a loan with a really low introductory rate for the first year might work out to be more expensive in the long run than a loan with a low ongoing rate.
You’ll find the AAPR in all home loan and personal loan advertising, as lenders are legally required to disclose it. Be aware that not all loan costs are included in the AAPR, like exit fees and early termination charges. Always check the fine print for these, as they can be quite hefty.
Podcast from last week: #105 Pivot client story w. Oliver – How to get onto the property ladder without sacrificing your lifestyle
In this episode, I chat to one of our long-term clients, Oliver who we’ve been working with for a bit over four years. We talk about his pathway to purchase his first property. When he previously thought it was unattainable and unrealistic, some of the strategies and tactics that allowed him to get there as well as his take on how to make sure that when you think about planning with your money, that you prioritize your lifestyle and enough to give you the holidays and the personal things that you want but find a quality balance between getting the financial outcomes that you want.
Giving update of the week
Off the back of the ethical investing series I’ve been doing on the podcast, we’re going green. We’ve just offset the Pivot office carbon emissions for the next year by planting 216 trees, rescues 12kgs of food, and provides 12 months of access to a solar lamp to family in need. This is 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).
Smart Money upside #20 – How to invest an inheritance to create financial security
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
Couple mid 30’s, household income ~$100k saving $20k annually, ~$1m cash, minimal other assets.
Frustrations
Want to get a clear strategy in place and have someone manage it for them.
What they wanted from us / the advice process
Passive income, growth from investments and capital growth for the long term.
What money strategy they were following before we went through the planning process
Retaining tech company employer shares from RSU’s, buying direct shares – no clear plan or strategy.
What money strategy they chose to pursue from our planning work
Could be a combination of buying the business and getting this setup for mum to run, and then dad going back to work. Keen on buying an investment property, but need to sort out the business and employment before we go ahead with this.
Key benefits of going through the process
Having a plan and strategy in place. Being able to see the different scenarios and how these impact their wealth.
Value of advice after all advice fees year one: $120,300
Year 20 upside after advice fees: $1,074,749
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.