27th June 2022

Smart money weekly; Stamp duty abolished, save tax before EOFY, advice upside for $180k net wealth, and new events launched

Ben Nash

Hey team,

Happy Monday.

Hot off the press this week was the news that some first home buyers in NSW will be able to choose between paying the lump sum of stamp duty or an annual land tax. While first homeowners will be the only immediate beneficiaries, the government was not shy about voicing its ambition to extend it.

Under the plan first, home buyers purchasing a property up to $1,500,000 can opt to pay an annual fee of $400 plus 0.3 percent of the land value. For example, buying a $1.35m house, with a land value of $810,000, the stamp duty would be $59,125. But if a buyer is holding on to the property for less than 20 years, they are better off paying the $2,830-per-year land tax — which would total $56,600. For apartments, the deal is better because the land value is less. An $830,000 apartment, with a $265,000 land value, would require an up-front payment of $32,440 stamp duty, or the buyer could pay $1,195-per-year land tax.

There are a number of factors to consider – are you buying an investment property or your family home? What’s your economic situation? Either way, it will be interesting to see how/if this tempers the ever-running hot property market (particularly in Australia’s major metro centers) and what this could mean for people trying to get into property.

In the news: Smart investing can see you make $50,000 a year in passive income
There’s a time bomb waiting for some Aussies as a $2 trillion wealth gap means they can’t afford to stop working – but there’s a clever way to overcome this. Find out how in my latest article for news.com.au.

Upcoming events:
We are one week out from EOFY, so it’s time to start preparing for the financial year ahead. We’ll be kicking off with a tax smart session for the start of the FY followed quickly by a talk on crypto. Click the links to register and join below:

Event schedule and links to book here:

Share market wrap
The Australian share market edged slightly higher on Thursday, as gains in financial and tech stocks offset heavy losses across energy and mining companies. US markets were weighed down by comments about inflation from Federal Reserve chairman Jerome Powell, who appeared before the Senate Banking Committee on Wednesday.

Key sharemarket numbers:

  • The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -1.3% lower than last Friday, at 6,691.40 points.
  • The US ‘S&P 500’ (Top 500 shares in America) finished the week -0.14% lower than last week, at 3,759I .89 points.
  • The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 0.75 % higher than last week, at 11,053.08 points.
  • The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -0.23% lower than last week (Friday AEDT) at 7,026.24 points.
  • The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 2,015.93 for the month, down -33.78% for the month to date

Investment story of the week: Pointerra Ltd (ASX: 3DP)
The Pointerra share price has risen sharply with a 36% increase at time of writing for the past 5 days. The 3D geospatial data technology company has announced two new US-based contracts that will assist storm emergency response crews. However, despite the recent increase the share price still remains at a 39% loss for the year to date. The company estimates that these new contracts will provide USD$250,000 worth of revenue annually and this could be higher dependent on usage of the Pointerra3D Answers storm response solution. Keep an eye on this stock as it looks like they may have a bright future.

Smart Money upside #75
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; early 30’s with income of approximately $80K. Total assets worth $180k. Saving about $2K annually

Frustrations

  • Feel like paying too much tax and not having enough to retire
  • Poor money mindset and limiting beliefs

What they wanted from us / the advice process

  • Setting up a saving plan to fund my ideal lifestyle
  • Set up a clear investment plan, diversify and increase investments
  • Set up multiple income streams

What success looks like for them

  • Feel financially secure
  • Ability to cut back on work
  • Have more disposable income

What money strategy they were following before we went through the planning process
Saving inside offset account and investing into high dividend-paying stocks and CFS portfolio

What money strategy they choose to pursue from our planning work
Putting excess cash into super and shares and pivot banking framework

Key benefits of going through the process

  • Increased investment diversification
  • Switch to a low cost super with access to a range of quality passive investment options
  • Clear super contribution strategy that is inline with her circumstances

Value of advice after all advice fees year one: – $6k
Year 20 upside after advice fees: $400k

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
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.

Money hack of the week: How to become your own master of efficiency.
If your high school self saw what you do today, do you think they’d be surprised? I chatted to Lynne Cazaly, founder of Cazaly Communications, on her journey since starting her business 20 years ago, and if she ever expected to write NINE books!
Check out the chat here.

Money mistake of the week: Why there’s no magic wand for your problems.
I don’t mean to be the bearer of bad news, but there’s no magic solution to your problems. FACT: Everyone is unique, and therefore your pathway needs to be customised, whether it’s your career, health, finances or relationships. In this chat, psychotherapist Andrew Sloan shared his most surprising realisations from interacting with hundreds of clients every year. Check out our full chat here.

Jargon Buster of the Week: Interest only loan (via Mozo)
Interest only loans are usually offered for a set term, such as five years. After the interest only term ends, borrowers can pay the original loan amount in full or convert to a principle and interest loan to start paying down the loan. Interest only loans are often used to buy investment properties. The lower monthly repayments free up cash for other uses, and if the property has appreciated in value it can be sold at the end of the loan to repay the original loan amount.

Podcast from last week: #175 w. Aaron Christie-David – Mortgage & property update
In this episode, I chat with Aaron Christine David from Atelier Wealth. He is a Mortgage Broker superstar who’s business helps people get into the property market and get on the front foot with their mortgages.

We talk about some of the trends that he’s seeing in the mortgage space, the overall property market, what people should know about the changes to mortgage assessment rates where he thinks the property market is going from here. And some of the mistakes that he sees people are making and how to set up your property purchase.

Helping people with this stuff is our jam, so if you want to chat about how to make your money success easier you can book an intro call with us here.

Be awesome,

Ben

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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.