Innholdsfortegnelse for November 2017 i Money Magazine

‘If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough.’ - OPRAH WINFREY Collectively we throw away around $38.85 million a month, or $466 million a year, in loose change, according to research conducted by Galaxy on behalf of ING. In our cover story this month you’ll see how small change is fast becoming big business with fin-tech start-ups (and even some banks). Experts say it takes around 66 days to form a habit, and simplicity and consistency are the key. All six of the micro-investing apps or accounts that we review work on this principle. Millennials may have been quick to adopt micro-investing – saving small amounts regularly – but it’s…

RODNEY HORIN Rod is managing director at Joseph Palmer & Sons (Vic). Rod says: “My late father used to say, ‘One needs to learn to save but also to learn to spend a little’, so I would put 60% into super, divide 30% among my three children to go towards their mortgages, give 5% to charity and spend the rest on a family holiday, with some left over for splurging.” NICOLA FIELD Nicola is a regular Money contributor. Nicola says: “I’d start by spending a few blissful days just admiring my bank balance. In the longer term, I’d drip-feed the cash into super, claiming the maximum before-tax contribution each year to grow my nest egg while also trimming my annual tax bill.” JOHN RAWLING John is an aged care consultant at Joseph…

If you are working out how much you need to save for retirement, don’t forget the costs of aged care. This is not just the cost of residential care; it should also include care in the home or support services to help you live independently as you age. Factoring in the costs of aged care is becoming increasingly important with the emergence of home care, increasing longevity and the rising incidence of dementia. Having the capacity to pay for services increases your range of choices and your ability to retain some independence. The costs of aged care have been accelerating and are likely to continue to increase at a rate higher than inflation. Home care costs can be difficult to predict and can vary from $100 to $5000 a week,…

Renovating for Profit is chock-full of tips from Cherie Barber, one of Australia’s leading renovation experts, who has rejuvenated more than 100 properties. There’s a room-by-room guide covering kitchens, bathrooms, facades, living rooms and bedrooms. The book includes real-life examples and before-and-after pictures so you get a visual idea of what works. There’s information on budgeting, time-saving ideas, organisation and how to successfully use colour and space. You don’t need to spend a fortune to successfully renovate and Barber highlights where to spend and when to save. Five readers can win a copy In 25 words or less, tell us your best tip on renovating for profit. Send entries to Book of the Month, Money, GPO Box 4088, Sydney, NSW 2001 or email money@bauer-media.com.au. Don’t forget to include your name…

More than 50% of premises are now able to connect to the NBN and that number is growing every day, so here are a few points to keep in mind before you make the switch. You have to get it. The introduction of the NBN means current internet services will be shut off, and the clock starts ticking once the NBN is installed in your area. From that point you’ll have 18 months to change to an NBN service, which is available from a range of internet service providers (such as Optus, TPG and many more). To find out if NBN is available in your area, or when it’s scheduled to be built, visit whistleout.com.au/broadband and enter your street address. Speed matters, and it is possibly the most important consideration…

With Sydney’s property market cooling and Melbourne’s expected to be not too far behind, national research firm Propertyology forecasts that a bigger property boom is about to unfold – in Hobart. The Tassie capital has the potential for price growth to push past 20% over the next year – well above the best years produced by Sydney and Melbourne during their boom, says Simon Pressley, Propertyology’s head of market research. He says Hobart’s growth cycle today is comparable to where Sydney was in 2014. “Hobart is the only location in Australia which has the combination of an affordable entry price, an economy which is already strong (and still improving), hardly any impact on investors’ annual cash flow, and a tight supply pipeline for as far as the eye can see. “Hobart…

After years of delivering stellar returns, the tide appears to be turning against listed property. The A-REIT sector slumped by 9.8% over the past 12 months, compared with a 6% return from the broader Australian sharemarket. We believe there are two factors behind recent underperformance – one macro and one more micro in nature. Let’s start with the macro: bond yields. With long bonds (10-year government bonds) hitting all-time low yields in mid-2016, the long road back to ‘normality’ appears to have begun. A micro factor is the headwinds facing the retail sector. Whether it be fears relating to the imminent entrance of Amazon or simply consumer-related concerns, retail has been on the nose and the retail-focused REITs have not escaped unscathed. Three of the largest have delivered returns of…

Heidi and Martin need to be congratulated on their impending wedding – and their dedication to investing at such a young age. They’re in a great position to secure their financial future and ensure that, unlike 82% of Australians currently aged 65 or more, they avoid falling victim to the aged pension trap. With an upcoming wedding and uncertainty about where (and when) they would like to settle down, it wouldn’t be unusual if their needs and wishes change over the next few years. Given the exposure their super already provides to the share-market, I suggest they retain flexibility for career and lifestyle by rentvesting: renting where they are happy while investing in property markets that appear to have solid fundamentals and growth potential. Depending on how determined they are…

I am a 32-year-old Italian-Australian. I work full time, earning $110,000 gross, and am debt free. I have $40,000 in my super. I have $200,000 in a term deposit at 2.7% a year. I also have an overseas bank account with 50,000 euro ($75,000) and soon I am going to inherit another 50,000 euro from my father. I’m very undecided about what I should do. I am quite conservative with my savings and am not sure of the right things to do in my situation – if I should invest in the stockmarket or buy a property, considering I am not yet a homeowner. In the future I would also like to go back to Italy and live closer to my family. I’m debating if I should invest in Australia or in Italy considering…

What is it? RateSetter is a P2P (peer-to-peer) lender enabling you to invest in fixed income, earning higher rates than those available through banks. How does it work? RateSetter’s online platform matches investors (lenders) with creditworthy borrowers. Investors can start with $10 and lending terms are a month, a year, three years and five years. Interest rates are set by lenders and borrowers and are based on the supply and demand for funds at different rates. Your money may be matched with a single loan or multiple loans. You’ll generally receive interest monthly and you can access cleared funds in your holding account at any time. What are the pros? • Higher interest rates than those available from bank accounts and term deposits. Advertised rates at the time of writing were…

YES BRENDAN O’FARRELL CEO of Intrust Super, winner of Money magazine’s Best-Value Insurance in Super award for the past five years. First, I’ll say that pros and cons exist for having your insurances inside or outside super, and the great thing is you don’t have to have 100% in either. However, because I’m on one side of the debate, I’ll provide three key reasons for holding your insurance cover through your fund. Easy access Most funds provide death, total and permanent disablement (TPD) and income protection cover. Some funds – and Intrust Super is one – also provide cover for members automatically. This helps because you don’t have to remember to “opt in”, and therefore the cover is there if you need it. In contrast, setting up personal insurance cover…

THE STORY SO FAR Regulations on how the banks treat consumers have been slowly increasing for several years. The financial advice reforms that banned new commissions and required financial planners to put their clients’ interests first, reforms to responsible lending and regulatory moves to limit bank lending to investors and on riskier interest-only loans have all come into effect in recent years. The Financial System Inquiry also made a number of recommendations that have resulted in the government boosting the powers of the Australian Securities and Investments Commission (or taking steps in that direction). One recommendation being adopted is to give ASIC greater powers to police how products are designed and sold. This is intended to make institutions more responsible for their products rather than simply provide reams of disclosure…

“Don’t do anything until you have gone away and cooled down” Thinking about investing in property? Looking for expert help? You’ll soon find there is no shortage of “advisers” willing to offer their services. But be careful. The property advice business is poorly regulated with few of the protections afforded to investors in assets such as shares and super. There are no laws preventing Joe Bloggs or the woman next door hanging up a shingle and calling themselves a property adviser, regardless of their experience. Genuinely independent advisers find themselves competing with promoters who claim to offer advice but are more interested in earning big commissions from developers and vendors. “People will choose fancy titles to big-note themselves and what they do,” says Rich Harvey, president of the Real Estate…

Michael Rice, from Rice Warner Actuaries, recounts how an old friend who earned a modest income benefited from a default fund, despite it starting later in his life and with only low contributions. The friend, who’s just retired at 65, fixed photocopy machines. “He and his wife have a little house and one child. They’ve never had a lot of money but they’ve just gone on a big trip to the US as a gift to themselves. “He has $300,000 in super purely through the guarantee system. Had that system not existed he wouldn’t have had that money. Yes, they might have lived a little better – probably gone on holidays – but the reality is people are not natural savers. “If it was enforced savings but didn’t give you good…

There’s a never-ending stream of financial gurus encouraging you to reduce risk. Foreign exchange movements certainly add an extra layer of volatility to your portfolio if you own international stocks, or any ASX-listed companies that generate substantial revenues offshore (see breakout for local stocks with US revenue exposure). Take Computershare as an example. Its 2017 result showed underlying earnings per share rising 4% to US57¢ ignoring currency effects – right in the middle of the upgraded guidance range of US56¢ -58¢. But the ignored currency effects were substantial. Putting them back in and translating those figures into Australian dollars at the year-end rates delivers a fall of 4%. ResMed and a host of other local stocks are subject to the same effect. Before explaining a few strategies to reduce the…

After year 10 the $10,000 would be worth $1 billion Well, here we go again. At a rough guess this must be getting close to 1000 articles or TV or radio stories I have written about scams over the past 35 years. Part of me does wonder if I am wasting my time but I am a genuine optimist. While I would be really surprised if a regular Money magazine reader fell for a money scam, I am hopeful that you will share scam stories like this with your kids, grandkids, extended family and friends. I don’t want to let myself become too despondent about people being scammed. In fact, I think as a “herd” our community is getting better. An example of this is that I see no evidence…

With the continually changing lending landscape, investors could add fuel to the alleged fire of a property bubble. While I don’t believe property prices have led to any bubble being present, increased exposure to large amounts of debt on the back of low interest rates by acquiring more investment properties, combined with interest-only repayments on those investment loans converting to principal and interest repayments, could impact prices. Lenders’ borrowing capacity calculators have changed significantly, making it more difficult for investors to continue to refinance or roll over their loans to continue their typical five-year interest-only period. Many investors who have too much debt, with repayments converting to principal and interest in the coming three years, could face hardship as their repayments will end up doubling. Forced sales could ensue. If…

Finch, which was launched in July, describes itself as “the financial app for your social life”. Not only can you pay friends or family using the app but it lets you request money and run group tabs to track shared expenses. It can also provide you with some spending insights on your social activity. Finch says the app lets you: • Securely pay and request money to any mobile number in Australia instantly and free, without bank account details. • Find friends easily by syncing your phone contacts. • Split bills equally or individually – avoid trips to the ATM or getting stuck with the bill. • Run tabs with friends you go out with frequently and settle later (perfect for roommates, workmates or group trips). • Avoid the awkward…

NSW car owners will be pleased to hear that from December 1 most CTP green slips will cost less. You may even be entitled to a refund if you’ve purchased or renewed a green slip this year. “The refund will apply to the owner of the vehicle at midnight on November 30 and will be calculated on a pro-rata basis. That is, the closer you purchase a policy to December 1, the greater your refund will be,” says the State Insurance Regulatory Authority (SIRA). It says that all people who are entitled to a refund will be notified and given information on how refunds will be provided. Most people will start to receive their refunds from January 2018. Visit sira.nsw.gov.au for more details.…

Everyone is talking about cryptocurrencies; first it was blockchain and now it’s initial coin offerings, or ICOs. According to the Australian Securities and Investments Commission (ASIC), an ICO or an initial token offering is a new form of funding used by businesses to raise money through the internet. ICOs allow consumers to use cryptocurrency (such as bitcoin) to purchase coins for a set period. The blockchain is an online distributed ledger that maintains a continuously growing list of transactions between multiple parties. An ICO utilises these new technologies to raise funds through the offering of secured tokens of cryptocurrencies. The tokens issued in an ICO are unique to the corporate issuer, thereby aligning the value of the coins in some manner to the perceived value of the company. While the…

Robotics and artificial intelligence are becoming more mainstream technologies and one way to invest in them is through Australia’s first global robotics exchange traded fund (ETF). Global Robotics & Automation (ASX: ROBO), which listed on the ASX in September, is from ETF Securities, which has teamed with the US-based specialist robotics and automation index and research provider ROBO Global. The ETF tracks 83 stocks from 12 high-growth sub-sectors, focusing on particularly innovative small and mid caps. The companies span 15 countries, with North America making up 43% of the index.…

NEED PAUL’S HELP? Send your questions to: Ask Paul, Money magazine, GPO Box 4088, Sydney NSW 2001 or money@bauer-media.com.au. Sorry, but Paul can’t personally answer your questions other than in the Q&A column. By submitting your question to Money, you consent to having your question and the response you receive from Paul published in the print and digital edition of Money. Duncan’s attitude to risk will determine ... Worry-free level of gearing Q Both myself and my wife are 32 this year and currently have no kids. Our home is valued at around $400,000 with only $35,000 left to pay on the mortgage. My income is $104,000 and my wife’s is $65,000 (both excluding superannuation). We both salary sacrifice $100 to super each week. We have $25,000 in a diversified…

Micro investing gives those who have no idea where to start an easy path to follow Micro investing is turning mobile phones into investment tools, enabling you to get a stake in shares, property and fixed income with your small change. It allows would-be investors with little starting capital to bypass the roadblocks that usually keep them out of the game, such as minimum investment levels, trading costs and market research. It appeals especially to millennials – roughly those aged between 20 and 35 – who are comfortable using technology to manage their finances. Many older members of this cohort have been locked out of home ownership – a traditional path to building wealth – due to very high prices, especially in Sydney and Melbourne. Most micro investing is facilitated…

What is it? Carrott is a savings app on your phone that allows you to sweep your virtual spare change from your everyday transactions into your super fund. How does it work? You download the free Carrott app on your iPhone or Android device. When you buy a coffee for $3.70, the 30¢ is “saved up” and once it reaches $5 it is swept into the Carrott account. Every month Carrott sweeps the balance in your account into your super fund. What are the pros? It is a painless, automated way to contribute more to superannuation. It can add up over time. For example, $10 a week means you are contributing an extra $520 a year (minus the fees) into superannuation (see Fact File). You are also keeping in touch…

What is it? It is a digital savings tool, available to those with an ING Orange Everyday account, which lets you round up your purchases and have that money automatically deposited into your Savings Maximiser account. P&N Bank offers a similar automatic feature called Pay&Save on its transaction account. How does it work? Every time you use your card to make a purchase (this includes transactions made using Visa payWave, Apple Pay and Android Pay and when you use your card details on file to make an online purchase such as a Netflix subscription) any leftover change will automatically be transferred to your linked savings account. You can choose your round-ups to be set to the nearest $1 or $5. If you bought something for $2.50 then 50¢ will be transferred to…

Making money from your photos can be perplexing from a tax perspective. You must identify whether you’re a hobbyist or are conducting a business as your tax and reporting obligations and benefits will be quite different. “The amount you are paid through selling photography on online sites may not be assessable income,” says a tax office spokesperson. “However, income-earning hobbies can sometimes grow into businesses, so it’s important to keep an eye on any change in income or practices so that you’re aware of your obligations before they happen.” The ATO defines a hobby as a spare-time activity pursued for pleasure. A business is run with the sole intention of making a profit and has basic reporting requirements, such as declaring income and claiming expenses. If the latter applies to…

“Parents are too lenient and coddling. Why would kids want to move out?” When Kim Abraham’s adult son tells her to get his room ready because he wants to move back home, she just laughs and says no, that’s not going to happen. “No matter how bad their story is, I say no. I tell them this is what is going to give you confidence. They have to know they can get through hard times and they don’t need a safety net,” says Abraham, a clinical therapist who writes for the online parenting guide empoweringparents.com. “You almost have to push them through it so it gives them confidence that they can make it,” she says. Helping your adult children to be financially self-sufficient can be tough. While I left home…

Who doesn’t love a bargain? The good news is there’s no reason you can’t save money every time you shop online. Here are 11 ways to make sure that you never pay full price again. 1 Shop around. This might sound obvious but do your research. You can use comparison sites such as getprice.com.au and myshopping.com.au or you can simply do a search in Google to see if you can find a better price. 2 Look for coupons or promo codes. Again by doing a quick Google search for a promotion code you may score a discount or free shipping. You can also check out finder.com.au, thebargainavenue.com.au or ozbargain.com.au for any special promo codes. 3 Try a Google Chrome extension such as Honey. When you’ve downloaded the extension, a Find Savings…

The tourism sector is a shining star of the economy. Our attractions of beach, bush and fabulous cities have seen overseas visitors grow rapidly, up 8.1% in the year to July 2017 to 8.6 million, according to Tourism Australia. And more of us are holidaying at home, with overnight trips by Australians up 2% in the year to June 2017, according to Tourism Research Australia. The one thing that all these visitors need is somewhere to stay, boosting the attractiveness of tourism property as an investment. Here are three ways you can cash in on the tourism boom: Extra bedroom If you have one of the 10 million spare bedrooms in Australia, turn it into a money spinner. The internet makes it easy to match your excess accommodation with short-stay…

“We believe the most successful businesses are the ones that make money by doing good” Investors with a strong social conscience are turning to a growing group of investments that not only offer a solid performance but also a social and environmental impact. They don’t want to be passive investors in companies that aren’t doing the right thing. They are known as impact investors and they want their investments to change lives and help the environment. At the end of the financial year they want to know how their investment performed but also the “output” generated by their investments. For example, how many low-income families have been helped with micro financing or how many hours of renewable energy have been generated and tonnes of greenhouse gases avoided? How many lifesaving medical…

Age, I’m coming to discover, is quite a good thing. Though many decry ageing – and its aches and pains – I have found that it sharpens the mind and gives you a sixth sense. Younger people might hate it when you speak it out loud but increasingly as people age they say to themselves, “I know what happens next”. Now they’re not pretending to have psychic powers or deja vu ... rather experience. In other words, you see certain situations or conditions and say to yourself, “I've seen this before”. The bigger question is whether you act on these judgements. That said, life circumstances (and this is an experience itself) mean that not every opportunity that comes along can be taken advantage of (otherwise you would buy a new car…

Whether you’re a beginner or an expert, financial journalist Martin Roth will guide you toward the stocks that offer the best low-risk, long-term value for your money. Top Stocks 2018 will help you to compare sales and profits across companies, find financial ratings for top Australian companies and look beyond share prices to see the real measure of a company’s worth. To claim your offer, go to educatedinvestor.com.au and click on the Top Stocks 2018 banner. Click “Add to cart”. Enter the coupon code “Money”. Click “Go”. This will reduce the price of the book by 20%. Shipping is free for deliveries within Australia. This reader offer expires on December 24, 2017. For more information email Janene at info@educatedinvestor.com.au. Martin Roth is an internationally successful financial journalist and one of…

For many people this month starts the run into Christmas, the holiday season and all that this brings with it, such as long lunches and parties. And the unofficial start of these festivities is Melbourne Cup day – the first Tuesday in November. Of course, for many investors and many in financial markets the first Tuesday in November is well known as the day when the Reserve Bank board holds its monthly meeting. And for quite a period the Melbourne Cup had to share the attention with a change in the cash rate. From 2006 to 2011 – six straight years – the board decided to change interest rates on the first Tuesday in November. But in the period since, it has been quiet on Melbourne Cup day. So while…

‘You can’t shut your mind to anything that might influence a share price’ It is a fundamental fact of almost all markets that for every trade there is a buyer and a seller. If that’s the case then clearly there is nothing “factual” about a market and, as with forces in physics, for every opinion there is an equal and opposite opinion. Otherwise there would be no trade and everything would be perfectly priced and predicted. But it isn’t, for the simple reason that share prices are not a science; they are a combination of science and emotion, of left brain (information and logic) and right brain (emotion). If investing and trading was all about left-brain decisions, as some would suggest, then it would be easy. We’d all be value…

The data in these tables provides information on several asset classes – Australian equities, international equities and multisector funds (sometimes called balanced funds). Funds have been ranked by size or performance as listed on the top of each table. The returns published are net (after) the annual management fee but do not take into account any transaction (entry/ exit) fees an investor may have to pay. The returns are before tax. Morningstar, a leading global provider of investment research, supplies our managed funds data. Funds smaller than $10 million and with a minimum investment of more than $25,000 have been filtered out. Morningstar relies on the fund managers to supply data monthly; if updates have not been provided, a fund may be omitted. Morningstar has developed a star rating system…

Matteo Charles Matteo Charles is an artist well known for creating live on-stage portraits. Matteo has collaborated with and painted for global influencers such as Richard Branson, John Travolta, Robert Kiyosaki and Halle Berry. He recently launched his autobiography titled My Disease, My Teacher and he is also an international shoe designer. What was your first job? Straight out of high school I became an apprentice butcher. It wasn’t my “dream job” but it made sense at the time as I wasn’t too interested in school. I lasted three years before realising I dreaded every single morning of work. I soon left and became an apprentice sign-writer, which I completed and today am a qualified tradesman in. What’s the best money advice you’ve ever received? “Don’t take money too seriously; it doesn’t…

Currency card’s unexpected costs I just wanted to warn your readers against leaving foreign currency in prepaid currency cards such as the Multi-currency Cash Passport promoted by the post office. I logged in to check what was going on with my card to find out that I was being charged $4 for every month of inactivity (after an initial 12 months of inactivity). The solution would be to transfer the remaining funds to Australian dollars and spend or transfer to a bank account (at a charge of $10). All those charges are apparently set out in the terms and conditions but I was really surprised at how bad it was for those who are just leaving some money on those cards for future holidays! Ana, email…

A gift card is one of the most convenient presents to buy and a great one to receive – that’s if you get around to using it. If you are anything like me, by the time you finally use it the expiry date is long gone and so is your present. That’s why it’s great news to hear the NSW government has finally stepped in, forcing retailers to put a three-year minimum on gift card expiry dates. The decision will put an extra $60 million worth of gift card dollars back into the pockets of consumers. Now the pressure is on other states to follow suit. Collectively Australians spend $2.5 billion every year on gift cards. Currently it’s up to individual retailers to decide how long consumers have to use…

NAB has overhauled its reward credit cards, which comparison site Mozo estimates will see points earn rates plummet by up to 47% on certain cards. NAB will also no longer be offering new American Express cards from November 13 and NAB American Express cards will be phased out completely by February 21, 2018. Investing in infrastructure has just got easier with ETF Securities’ new global infrastructure exchange traded fund, Global Core Infrastructure ETF (ASX: CORE). For an annual fee of 0.45%, the ETF invests in around 75 listed infrastructure companies in developed countries and covers industries such as transportation, power generation, engineering and construction, oil and gas distribution, telecommunications and water utilities. The ETF tracks an index from Solactive. Myer has relaunched its credit card, which is now issued by…

It’s easy to lose track of a super fund or two, especially in the early phase of your working life when you might be doing part-time work or working multiple jobs for relatively short periods. It’s surprising how easy it is to forget about a super fund linked to a job you did for only a few months. It might only have a few hundred dollars in it but with a few years (or decades) of growth added those lost contributions could significantly improve your wellbeing in retirement. According to the ATO, there were over 6.3 million lost super accounts as at June 30, 2017, with a total value of almost $18 billion. Out of that total, the super funds held $14.12 billion and the rest was held by the tax…

Australian dreams of home ownership are starting to fade, particularly in our major economic centres. What would it take to make renting fair? Renters can’t enjoy relationships with property like homeowners do, because the default setting for Australian tenancies is “insecure”. Agreements are offered on initial fixed terms of six or 12 months, before continuing week to week. They can then be brought to an end without a reason, so renters never really know how long they can stay in their current home. In parts of Europe anything less than a three-year agreement is considered “short term”. Tenancies in Germany, the Netherlands and Sweden are indefinite and cannot end without legal grounds. As we look to these countries for inspiration, we observe a shared aspect: our tenancy agreements are also…

Diversification is a bit like the magic of compound interest. Having a well-diversified exposure means your portfolio won’t be as volatile. And as the table at right shows, the best-performing asset each year can vary dramatically and last year’s top performance is no guide to the year ahead. So it makes sense to have a combination of asset classes in your portfolio. This particularly applies to assets that are lowly correlated - ie, that don’t just move in lock-step with each other. For example, global and Australian shares tend to move together during extreme events. But bonds and shares tend to diverge when crises hit. Shane Oliver, head of investment strategy and chief economist, AMP Capital…

The reluctance to visit theme parks in the wake of the disaster at Ardent Leisure’s Dreamworld has also affected Village Roadshow: attendance at its Gold Coast properties and Wet’n’Wild Sydney was down 9% and 15% respectively, causing theme park earnings before interest and tax (EBIT) to plummet from $38 million to $5 million. Even with the cancellation of the interim dividend, net debt is 3.9 times earnings before interest, tax, depreciation and amortisation (EBITDA). The final dividend has been axed and various assets have been put up for sale. Net debt fell from $554 million to $527 million in 2017, and if the company continues not paying a dividend and successfully sells some assets it could quickly fall further. The marketing solutions business continues to grow, and will expand into…

With so many options available and uncertainty around their future, it’s been understandably easy for Heidi and Martin to settle into a state of inertia and do nothing. It’s great to see they’re now ready to take control of their financial future. The key to making any investment decision, whether property or shares, is having a clear understanding of the investment’s purpose and how it fits in with their future plans. Heidi and Martin don’t need to lock themselves into something with high entry and exit costs that can’t be easily exited. This applies very much to property, with its high entry costs such as stamp duty, legal costs and inspections – not to mention the time cost involved in searching and completing the transaction. On exit, there are agent’s…

What is it? Headspace provides early intervention mental health services to 12- to 25-year-olds and, along with assistance in promoting young people’s wellbeing. One in four young people have experienced a mental health issue in the past 12 months and suicide is the leading cause of death of young people, accounting for a third of all deaths. Where your money goes: Headspace says donations help ensure every young person in Australia knows that there is help available through its services, which include Headspace centres that help young people access health workers and eheadspace, an online and telephone service. The Department of Health funds these services. How to donate: You can make a one-off contribution or set up a regular donation at headspace.org.au. Other ways to get involved and support the…

What is it? Acorns Grow Australia (aka Acorns) is a micro-investing product that lets you invest virtual “chump change” in a diversified portfolio of exchange traded funds (ETFs) listed on the ASX using an app on your mobile phone or the website acornsau.com.au. Run by former RBS investment banker Brendan Malone, Acorns was launched in Australia in February 2016 through a joint venture between fast-growing US-based fintech start-up Acorns Inc (backed by payments giant PayPal) and Sydney-based structured products firm Instreet Investments. As a registered managed investment scheme (or managed fund), Acorns is overseen and regulated by the Australian Securities and Investments Commission (ASIC). How does it work? Acting like an automated coin jar for loose change, Acorns’ default setting will round up the balance of your debit or credit…

Pat Leygo, 31, a creative director and digital artist from Sydney, has only been taking photos for the past four years and submitting to stock agencies for the past two. Initially, using a Canon PowerShot G10 ($500), he picked up photography as a means of saving money in his design work. “I didn’t want to buy stock photos off anyone or to pay a premium for a photographer to do it. I thought I’d be better off just doing it myself,” he says. He ended up doing some work at a Sydney studio taking stock photos to order for agencies, which gave him an insider’s look into how stock agencies work and what sells. Building up a small portfolio, he began selling his own photos to Shutterstock and small graphic…

How do you feel about your nine-year-old having their own debit card? In the past they had to be around 16 to be eligible but now one major bank has dropped that down to just nine years. The Commonwealth has a debit Mastercard for children aged nine and over to assist parents in teaching their young family about responsible spending in the digital age. Surprised? I personally think it’s about time! The good thing about debit cards is that they only allow you to use the funds in your bank account. And because they are run on either the Mastercard or Visa payment system, your child can use their card online, in stores and overseas. Transactions are protected by the Mastercard or Visa security features. In our digital age chances…

Importing can be a way to grow your small business by enabling you to offer new products or services or reduce your manufacturing costs. However, there is some homework to do before you can start importing exotic Chinese weight-loss teas or T-shirts from Laos. 1 Establish compliance Before researching suppliers, check with the Department of Immigration and Border Protection that the product you want to import can enter Australia. While you’re at it, check for any permits, duties or regulations that may apply to the products you’re looking at. 2 Research suppliers The next step is to find the providers. The Small Business Development Corporation in Western Australia recommends consulting chambers of commerce for referrals. Austrade is focused primarily on exporters but this government agency is worth contacting as it…

• Food and agriculture – promote sustainable agriculture, help reduce hunger and increase food security. • Energy – develop sustainable and renewable energy that is reliable and affordable. • Water management – reduce consumption. • Education – help children who receive little or no schooling, as well as help people further their education and gain employment. • Financial services – improve the reach of services such as banking and insurance to people who have little or no access to them. • Sustainable transport – reduce fossil fuel consumption and invest in electric vehicles to help reduce greenhouse gas emissions. • Healthcare – improve the access to affordable health services and the availability of devices that help decrease diseases. • Technology – software and mobile technology to drive efficiency, productivity and innovation in education, healthcare,…

How does your super fund calculate the dollar value of your account balance to reflect market performance? What happens when you switch investment options, change to a new provider or go into pension mode? Understanding how pricing works can be useful. To calculate and update the changing value of your investment option, super funds use one of two methods: unit pricing or crediting rates. While industry funds have long used crediting rates, many have now switched to unit pricing – the preferred method of retail funds. At its most basic level, unit prices give you a snapshot of what your super is worth at a specific point in time. “It’s much the same as what happens with share prices,” says Philip La Greca, executive manager, SMSF technical and strategic solutions,…

With the launch of Amazon in Australia rumoured to be happening this month, it’s worth returning to the retail sector to understand whether the decimation of market capitalisations represents an overreaction and therefore an opportunity. Estimates for Amazon Australia’s annual revenue range from $3 billion to $15 billion but even at $15 billion it would represent no more than 5% of total retail spending of about $312 billion. Take out Amazon’s $15 billion estimate, along with about $75 billion for Coles and Woolworths supermarkets, and there is still about $220 billion of revenue for retailers, suggesting they aren’t all at imminent risk of extinction. While sales made at low prices still generate revenue, profit margins can be negatively impacted. Amazon’s arrival may do more to impact survivorship through pressure on…

The data in these tables compares some of the most popular super funds. They are a mix of industry funds, master trusts and government funds. Industry funds are set up by employer associations and unions; many are offered publicly, some have restricted membership (NP). Master trusts (corporate and personal) are set up by banking, insurance or financial planning groups. All performance figures are after all fees, charges and tax applied to the fund have been deducted. The table here shows performance of funds’ balanced options. But most super funds offer many other choices of investment mix. The data is provided by SuperRatings, a totally independent Australian superannuation research company. It is the leading source of superannuation information to the Australian media and is renowned for its timely commentary and opinions…