Smart Money Weekly; The cost of kids, invest more when markets are down, and property bounce back

Ben Nash

Hey team,

Happy Monday.

The banking sector has seen a turbulent week with names like SVB and Credit Suisse headlining the drama. The Australian big four banks have been impacted but not as drastically as others. Credit Suisse dropped over 30% Wednesday then all but completely bounced back Thursday after aid from the Swiss Central Bank in the form of $81 billion worth of borrowing.

The banking spectacle has caused an almost 180-degree turn on expected interest rate outcomes for the next year. The Federal Reserve in the US is now priced to finish off the year with an official cash rate 1.5% lower than what was expected a week ago, with Australia on a similar path. Things are changing quickly, and smart investors are taking advantage.

In a slight departure from our regular programming, many of you may have seen that this week we’ve been launched the Smart Money Accelerator, our newest solution to help you get ahead investing faster. We’ve been getting a few questions about WTF this is all about and how it works, so before we get into money news for this week I’ve put together some FAQ’s here.

What do I get inside the Smart Money Accelerator?

Click here to see everything included + bonuses.

You get instant access to the most in depth money and investing training we’ve ever released. This is the exact step-by-step process our team has used to help thousands of our clients build over $700m in investments and wealth.

What will I learn from the Smart Money Accelerator?

The Smart Money Accelerator walks you from start to finish in creating the smartest possible money action plan for you. From building your financial foundations; making saving easier, start investing more with more confidence, squeezing a better return out of your super, and building better money habits, and your step-by-step guide to turning your PLANS into RESULTS.

There’s no guesswork here. It’s the same formula we’ve used to help thousands of others start nailing it with their money.

Do I really get private 1-1 coaching for free?

Yes! Because of the anticipation, we’ve had from our community to release this new service, and because we want to see our early students crush it with their results, we wanted to go above and beyond to make this offer as sweet as possible.

So for this special launch week, we’re a full year of 1-1 coaching with a Pivot Wealth adviser at no cost, all included in our discounted launch pricing.

All the details can be found here.

What’s “the catch” with free access to the Pivot Wealth Money App?

For the first time ever, we’re making the Money App we’ve set up for our private clients available to the Smart Money Accelerator members. Through the app, you can set money goals and targets, track your progress, and get insights on your spending and investing so you can make better money decisions with more confidence. There’s no catch – but it delivers some serious results!

How much money do I need to have to get started?

The Smart Money Accelerator was created to help people save more no matter where you’re at now, and the less you *think* you have, the more value you’re going to be able to squeeze out of this program. But the better news? It takes a much smaller amount of money than you may be thinking you need in order to build the foundation for serious investment wealth!

What if I don’t understand money?

That means you’re the exact person who’s going to benefit most from this course. We ditch the confusing jargon and terminology and focus instead on simple, practical action steps so you can quickly implement the learnings – even if you’ve previously felt that money was a foreign language you don’t understand.

How do I know if this will work for me?

We’ve used this exact framework ourselves and with thousands of other clients, helping them build over $700m in investments and wealth – so we know it works. Plus we’re so confident the Smart Money Accelerator will deliver for you, that if you follow our process and put in the work over the first 30 days, and you’re not happy with the results – we’ll gladly give you a full refund.

Smart Money upside #109
Here we unpack the numbers from a recent client we helped, what they were doing with their money when they came to see us, what they chose to do as a result of going through the financial planning process, and the financial impact and upside we helped them achieve. To chat about how to get these sorts of results, you can book an intro chat with us here.

Individual, early 30’s; household income ~ $170k; total assets ~ $650k; saving ~ $5k annually.

Serviceability has become difficult due to HECS debt, not sure how to take the next step and buy the next property, not sure what other wealth weapons to use outside of the property.

What they wanted from us / the advice process
Advice on the next right move for them in terms of building wealth through both property and other means.

What success looks like for them
Having the freedom to live life the way they wanted to.

What money strategy they were following before we went through the planning process
Investing in a small portfolio, paying off current investment property debt and saving funds in an offset account.

What money strategy they chose to pursue from our planning work
Investing in new investment bonds, re-aligning superannuation investments to match their risk profile, a brand new banking structure to manage cash flow better and a more robust debt management strategy to provide both short-term and long-term benefits.

Key benefits of going through the process
Education around their finances, understanding what to focus on now and next, and a better understanding of what trajectory they are on and where they could end up from taking action.

Value of advice after all advice fees year one: $10k
Year 20 upside after advice fees: $700k

If this story resonates you can book an intro call with us here.

Video of the week
After a steady decline, is the property market finally turning around? With 1% growth in the last four weeks and hints of improvement across the nation, it’s worth taking a closer look at the Australian property market and what this could mean for property investors. Check out the full video here.

Client story of the week
Being smart with money isn’t just about having more cash, but the lifestyle it can allow you to live. This story is from a recent client that wanted to make smart investing and tax decisions to give them the freedom to work part-time and spend more time with kids. Check out the full video here.

Podcast drop
Learn the tips, hacks, and strategies to help you level up your money game. Pods released last week:

Upcoming events:
Free online money education to help you invest smarter and create a life not limited by money:

Blog of the week: How your kids’ ballet lessons could really be costing you over $230k
In the current inflation and cost of living crisis, many households are grappling with how they make ends meet. At the same time, with this crisis comes opportunity – property, shares, and crypto are all down from their high points – meaning good investments are today selling at a discount.

The people that come through this period of disruption in a stronger position than they went into it are the ones that can find a way to find some money to keep investing. But, off the back of nine consecutive interest rate rises on top of sky-high prices of everything from petrol to pears, this isn’t an easy proposition.

For families, one big line item in the budget is spending on kids’ extracurricular activities, which has been estimated at over $1,800 per activity per child through a recent report from Mozo.

Spending on your kids is something that’s important, nice to do – and something every parent wants. But it does come at a cost – not just in terms of what it means for your savings today, but also in terms of what it means for your ability to invest for the future.

$1,800 invested in the next 12 months will grow to be worth around $236,959 over 30 years based on the long-term Australian share market return of 9.8%. This means you’re potentially making the choice between ballet lessons and the ability to give your kids a chunk of cash they could use for the deposit on their first home in the future. Clearly an extreme comparison, but a valid one.

Making conscious child-related spending choices
This might be a little controversial, but there’s merit in making deliberate spending choices for your children.

Kids spending is an area where I see a lot of people get things way out of whack. As a father of two gorgeous girls, I want the best for my kids. If there’s something I think will add to their lives or make them happy, I often want to give it to them with all my heart.

Fortunately for me, before having children I was lucky enough to benefit from the lessons learnt by some of the people I’ve helped with their financial planning.

In my opinion, someone pushing so hard to cover spending on kids to the point you’re stressed out or forced to make major sacrifices in other areas, or until you don’t have money leftover for investing is a disaster.

Finding balance is crucial here. Saying no to a few things your kids would probably enjoy so your family can all enjoy life more, and so you can keep investing to make progress towards financial security, is a result that may give a better outcome for your family.

It’s easy to go wrong with spending here by looking at each individual child-related spending decision in isolation. You ask yourself, should my daughter do ballet lessons? Should my son play basketball? Should we send the kids to the more expensive school? Should the kids learn to play the saxophone?

The answer to these questions often results in you making more commitments and spending more money (not to mention turning yourself into a never-ending taxi service…).

Before you know it, you can end up committed to so many things that you’re having to say no to other important things, or saving and investing less, or often both.

The alternative to the reactive approach of making these choices in the moment is taking a considered approach to what and how you spend money on your kids.

How to plan your child-related spending
There’s no one-size-fits-all rule that will work for every family, but there is one method every family can use to make the best decisions around their child-related spending. This approach will help you get clear on what you’re spending today, and what money you have to invest for the future.

The key here is having clarity on the impact of your choices today on your position not only today, but for the years to come.

When you’re putting together your spending and savings plan (budget), the key to success is looking at every line item to make sure you’re prioritising the things that are the very most important to you, and deprioritising the rest so you can save and invest more. Often when you’re doing this, your spare cash or savings number is what’s leftover, but it’s often not the least important thing.

You should be looking at which child-related spending you see as critical, and which are more nice-to-have. Then look at the impact of not spending on the non-critical expenses, both on your savings today, and in terms of how that money would grow for you if you invest it for the future.

You’ll likely be surprised about the big impact these seemingly smaller expenses will have over time. From there, think about the financial and investing possibilities this money could create for you, i.e. the ability to buy your next property sooner, pay off your mortgage faster, more quickly build your investing income, etc.

Then it’s time to prioritise.

Ask yourself whether each of these extracurricular options is as (or more) important than saving and investing the money?

There’s no one right answer here, because the right decision for you depends on you. It will depend on where you’re at with your money today, what your money and family goals are for today and the future, and how much money you have to make them happen.

But the key is making a conscious choice and going into any child-related spending with your eyes open.

The wrap
Giving your kids the best of everything is something every parent wants. But this spending comes with a cost, both in terms of your ability to save today, just as importantly, in terms of your investment potential that will drive your progress into the future.

Instead of making your spending choices in isolation, take the time to understand how your spending decisions today fit in with the bigger picture. This way, you’ll make better choices for your family today, and have the peace of mind you’re making the right moves for tomorrow.

To your success,


PS: Pivot Wealth exists to help people invest smarter to create a life not limited by money. If you want help to make your next steps easier, you can book a 10 minute, no BS chat with us here.


Ben Nash
Founder and Adviser
Pivot Wealth

The information in this note is not personal advice, a guaranteed pathway to that elusive beach bod, or the lost script of Edna St. Vincent Millay’s Pulitzer Prize-winning Conversation at Midnight. This is just a bulk communication pushed out into the internet, and it doesn’t even have your name on it. Your personal situation, needs & objectives, and financial situation have not been considered in putting this together – nor have we considered your dietary preferences, the way you like your hair cut, or your favourite travel destination – but we have spent a lot of time thinking about the future of urban society, whether there is other intelligent life in the solar system, and the pervasion of soy and linseed bread in Australian metropolitan hubs. You should consider the appropriateness of any general advice in relation to your own objectives, financial situation and needs and seek advice before taking any action. You should also consider using a variety of eau de toilette fragrances to keep your partner interested and colleagues on side, not using plastic straws, and minimising your screen time. Where information relates to a financial product, you should read and understand the relevant product disclosure statement. Where information relates to your own potential for awesomeness, you should consider backing yourself totally and completely. Past performance is definitely not an indicator of future performance when it comes to investments and financial products, as well as the likelihood of your children sitting still and quiet for an hour being satisfied playing with a used piece of wrapping paper. Financial services guide.