Hey team,
Happy weekend.
Share market wrap
Last week the income return on corporate bonds (bond yield) increased significantly which lead to a sell down in the share market by investors excited by the potential to generate an income return – something that’s been lacking in recent times.
Key markets numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 0.2% Lower than last Friday, on 6,943.00 points.
- The US ‘S&P500’ (Top 500 shares in America) finished the week 0.03% lower than last Friday, on 3,841.94 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 3.64% lower than last Friday, on 12,920.15 points.
- The Global ‘All World’ index (measured with the iShares MSCI world index (all share markets around the world combined) finished the week 0.82% lower than last Friday, at 115.15
Investment story of the week
Vodafone group plc (NASDAQ: VOD): Bouncing out of COVID, Vodafone as one of the world’s biggest telecommunications companies is on a tear, with the share price up over 25% in the last month. Seems like everyone working from their respective COVID bunkers has been driving solid revenue opportunities.
Weekly jargon buster – Option (via Morgan Stanley):
An investor’s right to purchase or sell a security or commodity on a specific date for a predetermined price. The investor forfeits the investment if they don’t exercise the options by the expiration date.
Money hack of the week: investing for tax purposes alone
In Australia, we pay a HEAP of tax, so it’s only natural to look for every opportunity you can to (legally) cut your tax bill. But it’s easy to get wrong. When it comes to tax and investment planning we know what we don’t know, and this can lead to suboptimal investment choices. In this post, I cover some of the investment tax planning strategies that can lead to trouble and how you can avoid them.
Podcast from last week: #92 Property Pro Mini series w. Marcus Roberts (mortgage broker to the stars)
Get around it on your podcast channel of choice here:
Smart Money upside #12 – ditching the 9-5 and starting own gig
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 early 30’s, first bub on the way no kids, Household Income $600k +$~USD$150k RSU income, home $2.2m, investment property ~$600k, cash $1m, ~$150k shares
Frustrations when first coming to see us
Paying too much tax, money coming in from property sale and not sure how to maximise. Wanting to ditch the 9-5 to create a more family-friendly lifestyle.
What they wanted from us / the advice process
Plan to start own business without sabotaging financial success, building a second income stream. Holiday house in Europe.
What money strategy they were following when we started working together
Paying down the mortgage and selling RSU’s to pay massive tax bills.
What money strategy they chose to pursue our planning work
Start a family, start a business, buy a family home + investment property, build a share portfolio.
Key benefits of going through the process
Confidence to execute on investments, clarity around how much to invest in starting a business without sabotaging their financial progress
Year 1 potential upside: $256k
Year 20 projected upside: $206k – noting that there is an assumed $400k annual reduction in income as a result of leaving corporate to start their own business
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 to this email 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. Financial services guide.