Innholdsfortegnelse for February 2020 i Money Magazine

Sometimes “aha!” moments can happen around the proverbial office water cooler. My latest one came during the requisite sharing of new year’s resolutions and a look back at the year that was. Challenged about whether resolutions are worth it, a work colleague trumped us all: one of her 2019 goals for had been to reach a certain net worth; she hit that number and is now looking at a higher target for 2020. Saving an extra $10,000 in 12 months is impressive, but projecting your net worth year on year doesn’t have to be the stuff of dreams. It’s that kind of thinking that can sustain a long-term financial plan. I used to associate any references to net worth with the ultra-wealthy, a legacy of my days doing research for…

Sitting in a smoky haze as I write my column leaves me in rather a negative funk. The deaths of people protecting their property and the brave volunteers, plus people losing their houses and livelihoods and tens of thousands of people evacuating, is depressing. The vast devastation to our country, plus the deaths of hundreds of thousands of birds and animals, adds deeply to my reflective mood. We’ve had two close friends lose their homes, one near Forster late last year and more recently one near Tumbarumba. My friend near Tumbarumba also lost part of his vineyard. The years 2019 and early 2020 have been hard for many people – and the planet. A large part of our global population has been impacted by regional wars, rapidly changing weather patterns…

Recently I asked friends and colleagues for the best financial advice they’d ever received. The outstanding message was a simple one – save. There were many variations on this theme: put aside a percentage of income, put aside half of any pay rise, always have three months’ income put away for emergencies and pay yourself first. Financial advisers will tell you it’s not people on the highest salaries who have the best investment portfolios; it’s those who are disciplined and make sure they regularly put money aside. I’m the type of saver who needs to know what I’m saving for. I have accounts for different goals. One is for holiday money; another is an investment account where I keep money to grow until it’s enough to buy shares; then there’s…

Budgeting spreadsheets are becoming a thing of the past as they make way for smarter tools in the age of open banking. UBank and fintech Basiq have partnered to provide UBank app users with a more in-depth understanding of their spending habits. Using machine learning, the new features will allow you to track your total spend and every transaction across 40 categories, as well as detailed spending by merchant. With this information, together with personal savings goals, the app provides you with a single daily spending allowance (your Free2Spend number), which adjusts up or down in real-time depending on how much you spend. If you overspend, the Free2Spend number decreases to help you get back on track. Underspend and you’ll have more to put towards your savings account.…

I live in Sydney with my wife and two young kids. I plan to buy a second home in the next two years, which I assume will cost between $900,000 and $1.2 million. I’m looking to buy in a suburb with a good government school, otherwise I need to pay for a private school, which will cost about $20,000 a year. Will it be a good plan to buy the second house and make the existing house an investment property? Or pay down the mortgage and close the home loan in, say, the next 10 years (and send the kids to private school)? Or do we rent in a good suburb until the kids finish school and put the existing property up for rent and buy an apartment as an…

This time last year I wrote: “Most analysts have predicted solid growth in the smaller capital cities, outperformance by specific regional markets and an easing of the Sydney/Melbourne downturns towards the middle the year.” Many of the locations that delivered double-digit price growth in 2019 were regional centres, notably in Victoria and Tasmania. Some regional markets in NSW and Queensland also performed well. Hobart continued to be the capital city leader on price growth and selected markets in Brisbane and Adelaide outperformed. Sydney and Melbourne started to recover after a series of fortunate events in May and June, including the election result and the measures to relax lending. This time last year I wrote: “There’s an expectation that the tougher lending environment will be relaxed this year, nudged by the…

STANDOUT LOCATION: Moreton Bay LGA: Brisbane is poised to enjoy its time in the spotlight and some of its more affordable precincts will attract first home buyers and investors on a budget. Northern suburbs like Petrie and Lawnton offer attainable houses in an area with excellent facilities and infrastructure. The Redcliffe Peninsula offers an affordable bayside lifestyle boosted by train links to central Brisbane. 2019 reviewed Townsville: The long-awaited recovery was stalled by floods in February, but by year’s end some suburbs were delivering price growth, headed by Cranbrook (14%) and Hermit Park (8%). Real estate watchers are becoming cynical of forecasters tipping the Brisbane boom, but the city is likely to deliver more in 2020. Analysts have suggested for years it would follow Sydney and Melbourne into a boom,…

Tasmania and the ACT have provided the leading capital city markets in the past 12-18 months. Hobart and Canberra have had the lowest vacancy rates and have led on rental growth, with Hobart also the outstanding city on house price growth, a status it has maintained for the past two years. The two cities continue to stand out as tight markets with good demand. Hobart has passed the peak of the current cycle and it was noteworthy that while it continued to lead capital city Australia on price growth in 2019, the rate of increases moderated somewhat. The opportunity in Hobart is to build new dwellings in a city where vacancies hover around 0.5% and rents are growing at the fastest rate in the nation. Regional Tasmania has also recorded…

Bell Direct is an online investing platform that is backed by stockbroking firm Bell Potter Securities. We have been awarded the Investment Trends Highest Overall Client Satisfaction award seven years in a row to 2019. Our list of the top 50 stocks to watch in 2020 (see page 47) is based on data that is available on the Bell Direct website and provided by Bell Potter. The list of top 50 stocks only includes direct Australian equities that can be bought and sold on the ASX and excludes listed products like exchange traded funds, listed investment companies and listed investment trusts. In deriving the list, we have focused on companies that have attained a buy rating from Bell Potter. These are companies that are likely to generate a total shareholder…

If pundits are correct, within 15 years most of the banking we do will be cashless and cardless. Transactions will be authorised using everything from facial recognition to fingerprint scanning as convenience and security overcome any privacy concerns. Big four move over Futurist Gihan Perera believes that as banking progresses customers are likely to choose a wider range of companies to manage their funds. It will fragment the market challenge of the big four banks’ dominance. Finder co-founder Fred Schebesta also thinks the banking industry will change drastically over the next decade. “I believe banking as we know it could be replaced with apps by 2030. Over the next 10 years, we’ll see more neo banks competing with traditional banks. Up Bank and 86 400 are just two players that…

1. Create space. Instead of giving money directly to the individual, make the target of your gift something external to them. In the case of my farmer friend, it was contributing money to support his livestock, or it could be paying for kids’ music lessons or sporting memberships. By not contributing to the individual directly, you can frame it as if it’s you who is receiving the benefit because you’re doing something meaningful that made you feel good. 2. Pay it forward. Agree to give them some money, on the proviso that they “pay it forward” to someone else in need when they are able. This gives them an increased feeling of control and feels less like pity. 3. The anonymous letter. For me growing up in a in a…

Reducing our burden on the planet and cutting costs has never been so vital. With a few clever strategies you can save water, power and money, and turn your outdoor space into a sustainable budget-friendly environment. 1 Go for grey power Recycling household water is a great way to keep your garden well hydrated and slash bills at the same time. Greywater systems store water from showers, baths, basins and washing machines for use on the garden or for flushing toilets. Australian households produce an average of 340 litres of greywater each day. It’s an ideal source of year-round irrigation and will cut water bills. The best bit? Greywater is nutrient rich, and your plants will likely love it. Check your council for greywater restrictions that may apply in…

FINANCIAL IMPLICATIONS Evidence is mounting that poor corporate behaviour doesn’t just leave a nasty taste in your mouth. It also affects investment returns. A study by the Responsible Investment Association Australasia found super funds that engage in responsible investment outperform other funds over one, three and five years. The RIAA looked at 54 of the largest MySuper funds. It found 34 had some form of responsible investment guidelines and they earned 8.14%pa over the past five years compared with 7.7% for the remainder. Comparable figures over the past three years were 9.06% versus 8.65%, and over the year to June 30, 2019, 7.33% versus 7.31%. The study found just over half of all professionally managed funds in Australia now employ some sort of responsible investment strategies and they have been…

The top five in Money’s 2020 award for Best Value Super Fund for Young People are a mix of the two types of MySuper default products. ANZ Smart Choice and Sunsuper for Life are lifecycle funds. These have an investment strategy that is age based: they invest more aggressively for growth while members are young and become progressively more defensive as they near retirement. Media Super, Equipsuper and AustralianSuper are balanced funds. The investment strategy remains the same regardless of a member’s age, with the asset allocation taking care of investment risk. Wealthadvice’s Marisa Broome says lifecycle funds work really well. “A young person should be in a high-growth fund to start. They can’t access their money until they are 60, so they have 40-plus years of investing to kick…

Investing in smaller companies is a well-trodden path to long-term wealth. Capturing growth as a company emerges from a start-up with an entrepreneurial approach to governance through to an established business with a board of experienced and independent directors can be richly rewarding. We believe there are four stages to a small company’s life cycle. Beginning with the “early” stage, the product or service being offered is classed as disruptive and the governance entrepreneurial. Less than 1% of our portfolio is dedicated to these opportunities. Following the early stage is the “emerging” stage with the product or service being commercialised. We would invest between 1% and 3% of our small companies portfolio in these candidates. As a company’s product or service is proven we describe the business as “developed” and…

Tale of two nans reveals the bigger picture I must confess that I am sometimes frustrated by the broad platter of financial material in Money magazine. Partly I suppose because I follow other material that is very much focused down a particular bent. What is the purpose of travel tips, for example? They are not going to make one wealthier. However, I had the healthy reminder of the bigger picture in Greg Hoffman’s “Rich Nan, Poor Nan” article in the September issue. I always enjoy his columns, but this was particularly sensitively written. Rich Nan was the money savvy one – and he valued her contribution to his life. Poor Nan was not money savvy, but she “invested” in other ways, putting her energies into enriching the life of her…

Taking effect from January 1, a new code of ethics for financial advisers will give clients greater protection. It includes a new, clearer definition of a sophisticated investor. Previously, “sophisticated” applied to an investor “who has had a gross annual income of $250,000 or more in each of the previous two years or has net assets of at least $2.5 million, as prescribed by the Corporations Regulations 2001”. The previous definition was considered too broad by allowing income to be a gross figure, with a grey area regarding net assets (whether they could be owned jointly or individually). Now there is also a requirement that the client has a level of financial competence. The code is issued by the Financial Adviser Standards and Ethics Authority. According to ASIC deputy chair…

A lack of training and restricted access to overseas-trained doctors will lead to an undersupply of GPs over the next 10 years, projects Deloitte Access Economics. The shortfall will result in a deficit of 9298 full-time GPs or 24.7% of the GP workforce by 2030. The deficit is expected to affect urban areas (31.7%) more than regional areas (12.7%). Australia has become the world’s largest exporter of liquefied natural gas, edging out Qatar. Our 2019 exports were double those of the US, the world’s other fast-growing LNG producer. Australia’s output came from all three LNG hubs: Karratha in Western Australia, Gladstone in Queensland and Darwin. Australians are less than impressed with our digital infrastructure. The Global Infrastructure Index found just 41% rated the quality as “fairly or very good”, below…

In the wake of the devastating bushfires, many taxpayers will need help getting back on their feet, understanding what their tax obligations are and how they can meet them when they have lost valuable records. If you are unable to lodge your tax return or activity statement, the ATO can give you more time. It uses a list of “affected postcodes” to identify people and businesses in disaster-affected areas. It then offers automatic extensions to those people whose tax obligations would ordinarily have fallen due at or about the time of the disaster. A full list of fire-affected postcodes covered by these concessions can be found on the ATO website. Even if you are not in the affected postcode, if you can show that you were impacted by the fire…

Australia’s exchange traded funds (ETFs) go from strength to strength, with no signs of losing steam. Millennials represented just 12% of the Aussie ETF market five years ago. That number has skyrocketed to 43% within the past two years. Similarly, the average age of a first-time ETF investor today is 42, down from 56 more than five years ago. Some of this can be attributed to ageing. Millennials now represent more of the Australian population, and they have more disposable income. But it also reflects the rising appeal of ETFs as an investment product, now growing 18% year on year. The move of ETFs into the mainstream can also be seen in the increasing number of financial advisers who use them – 3800 in 2010 versus 10,500 today. “The use…

When Kim Liddell switched from leading a nomadic lifestyle in her early 30s, she had two young children and needed a flexible job. “I saw an opportunity in the market and thought that I’d buy a truck and send it to work,” she recalls. We’re not talking any old truck. It wasn’t set up to deliver groceries to online shoppers, or glammed up as a mobile party venue to circle city hotspots. Hers was custom-built to lug high-pressure water excavation gear to blast and then suck up dirt and muck so that essential underground services could safely and easily be accessed. “I had taken time off to be a mum,” explains Liddell. “Prior to that, I ran sales and marketing for a cruise company in the Whitsundays. In between, I…

Margaret is founder and director of Destiny Financial Solutions and a bestselling author of nine property investment books. destiny.com.au You have done a great job getting as far ahead as you have at such a young age, so well done to that! When you have bought a property and done it up, and then had a good uplift to its value, it’s tempting to do the same again, buying in the same area, and this is what you have done. What you cannot ignore, though, is this: the uplift you saw is more than likely attributed to the fact that the entire market grew (and your house would have increased in value even without a renovation), rather than because you renovated. It was market timing that added the most increase…

STANDOUT LOCATION: Northern beaches: This precinct was one of the most resilient amid the Sydney post-boom downturn. Sales activity stayed solid and prices in the apartment markets held up well. Major projects, including the $600 million Northern Beaches Hospital, are generating jobs. The proposed Beaches Link tunnel will make commuting to employment nodes and the Sydney CBD easier. 2019 reviewed Queanbeyan: Like nearby Canberra, Queanbeyan has low vacancies and demand from buyers and renters is strong. Several Queanbeyan suburbs grew prices by between 5% and 10% . As vendors increasingly join the party in 2020, some of the heat will come out of auctions and prices towards the upper end of the market. Evidence that the NSW economy is losing some steam will also help to defuse the momentum evident…

STANDOUT LOCATION: City of Melville: The Perth market shows signs of recovery and one of the standout performers is Melville. Several suburbs have growing buyer activity and some have recorded price growth in the past 12 months. Melville benefits from being close to the major east-west transport corridor linking Perth Airport to the Port of Fremantle. Strong infrastructure spending suggests this market is well placed to grow. 2019 reviewed Stirling: While the generalised data suggested Perth prices fell further in 2019, many Stirling LGA suburbs delivered moderate growth, headed by Carine (up 6%). Perth showed clear signs of recovery late in 2019 and is poised to deliver some growth in the new year. Vacancies have steadily reduced and rents are growing again, a clear indicator of future price movements, on…

Just as those who made a living from horse and cart found themselves in a spot of bother when the Ford Model T was introduced, today’s labour force will have to make way for robots and computers that do tasks faster and more efficiently than humans. These are the inevitable costs of progress. They will take place at an unknown pace and affect industries,agesand genders differently. And there are experts who have thought about how this will play out, what you can do to safeguard your job and how to profit from it. Gender gaps Automation could threaten men sooner due to their over-representation in industries that rely on manual labour. By the same token, traditionally female-dominated jobs that are more people-based could be complemented, rather than replaced, by automation.…

A friend of mine, Emily, is weighing up whether to replace her kids’ childcare with an in-home carer such as a nanny or an au pair. No, Emily isn’t a high income earner with a flash house and separate accommodation. She is a hardworking, exhausted mother who needs help bringing up her two young boys. Emily and her husband David have no family in Sydney to help them and they work long hours, often travelling. They currently hire a student to pick up the kids from daycare and feed them an early dinner, but this arrangement can be unreliable. Emily hopes an au pair or nanny will ease the family’s stress levels and everyone, especially the kids, will be happier. Emily and David spend about $1200 a week on childcare…

Australian households collectively spend over $5 billion on water each year. As our urban populations grow, water bills look set to rise. Already Perth residents can pay up to $4.55 per thousand litres of water. In Sydney, the opening of the Kurnell desalination plant has pushed water rates up from $2.11 to $2.24 per kilolitre. Harvesting natural rainwater is a smart solution. The average suburban roof has the potential to capture around 100,000 litres of rainwater annually. This assumes yearly rainfall of 500mm, and even our driest state capital, Adelaide, meets this target, receiving around 551mm in annual rainfall. It makes a backyard rainwater tank a money-saving investment, especially as a quarter of household water is used on gardens. Installing a rainwater tank does involve a capital outlay. A 5000-litre…

I know a lot of you have big holdings in banks for income, but it has, in hindsight, been one of the biggest Australian investment mistakes of the past five years. In that time, as you know, the banks have been pummelled. It all started with a Commonwealth Bank rights issue in March 2015, which led to $12.4 billion worth of bank sector capital raisings by year end. That first CBA issue marked the peak of the sector. After that initial bout of indigestion came a series of negative waves starting with those unnecessarily prudent APRAled “restrictive lending practices” in 2017, now repealed. They kicked off a slowdown in the bank sector’s lifeblood, the housing market, and as credit lending slowed, and as Labor’s Bill Shorten threatened measures to pique…

A dollar saved might be a dollar earned ... but not if everyone is saving, for there’ll be nobody left to do the spending that somebody else would be earning. This, ladies and gents, is the moral of the passage from The Fable of the Bees, written by Bernard Mandeville in the early 18th century – the passage that John Maynard Keynes himself cited when he gave us the paradox of thrift. This is what the Reserve Bank of Australia alludes to in its recent policy statements: “The main domestic uncertainty continues to be the outlook for consumption.” This is also what the September quarter national accounts underscored when they revealed that despite the 2.5% quarterly increase in household disposable income in the third quarter of 2019 (from a mere…

What was your first job? I washed dishes at a small pizza restaurant in the Melbourne suburb of Carlton. My biggest memory of that time was being yelled at by the head chef – quite a lot. Needless to say, my career as a dishwasher lasted only one shift. Plus, it really wasn’t worth the 10 bucks per hour. What’s the best money advice you’ve ever received? If you had all the money in the world, and money was not your absolute motivator, what work would you want to do? Whatever you answer is the career you should ultimately pursue. What’s the best investment decision you’ve made? I have opened up a completely separate savings account, which I don’t touch, for all my income that isn’t generated from stand-up comedy…

JULIA NEWBOULD Julia is Money magazine’s editor-at-large. She says: “If it’s something special it would be a nice drink to set the mood – a martini, champagne or negroni. Food-wise, it’s hard to go past fresh oysters, fish or duck, but my weakness is a side of fries. Or it just might be a good laksa.” TERRY RYDER Terry is the founder of property investment website hotspotting.com.au. He says: “A liquid refreshment – a good supply of water, then something a little more potent, usually red wine in my case, and whatever others at the table regard as their favourite. Then we can focus on the menu. Good wine and good food were made to be together.” MARCUS PADLEY In the 1980’s restaurants were simple. Posh eating meant ordering a…

The federal government recently passed a bill that means Australian expats will need to consider capital gains tax (CGT) on their former family home when they come to sell it. While it was hoped that commonsense would prevail, the removal of the CGT main residence exemption for all foreign residents is set to become a reality. Australians living overseas have until June 30, 2020 to sell their former home and still claim the exemption, especially if they have been overseas for less than six years. However, anyone who bought their property after May 2017 has no such opportunity, as they are already exposed to a CGT liability if they sell while still a foreign resident. Controversially, foreign residents do not get recognition for any period they lived in the property…

(Woodslane, $55) The best way to beat the post-holiday blues is to plan the next one. Designed for serious campers, this painstakingly researched guide is divided by states and territories and highlights points of interest in different locations, including markets, lookouts, beaches, rockpools and gardens. Each state entry starts with the capital city and then moves onto other areas, with GPS co-ordinates provided for each location. It includes free activities, such as walking tours. Rest areas and free camping grounds are also detailed, as are maps and dump points for waste. Five readers can win a copy. In 25 words or less share your best tips for a budget holiday. Enter online at money- money-mag.com.au/win or send entries to Money, Level 7, 55 Clarence Street, Sydney, 2000. Entries open January…

Owning a home fulfils the great Aussie dream for many. However, the process often comes at an unexpected cost. Data from Allianz Australia found half (51%) of home buyers admit the search for a new home was so stressful it affected their mental and emotional wellbeing. So what is the source of this stress? The survey suggests unexpected costs are getting house hunters down. Homeowners wished they’d known about mortgage insurance or stamp duty, for example. Others wished they’d had more realistic expectations of what they could buy for their budget or how long the process would take.  As a neuroscientist who works in the mental health and wellbeing space, I also have firsthand experience of the stress of buying and selling. But the toll taken on emotional wellbeing is…

Construction industry contractor. Learned how to be independent and hardworking after her parents went bankrupt when she was a young teenager. Aged 48. Invests in residential property, learning from her father’s, experience as a former land broker in Adelaide. Worked as a sales assistant at the Body Shop, and was trained to manage a business. Embraces adventure, sailing from Greece to the US on Young Endeavour. A registered fitness trainer who is passionate about health and wellness, $ she practises yoga and goes paddle-boarding.…

Steve has worked in financial planning for more than 30 years and started independent financial planning group Wealth On Track in Adelaide 11 years ago. wealthontrack.com.au Congratulations on building the equity in your own home and on buying another property. This is a great achievement and shows what can be done with hard work and smart saving. The things I like about what you have done are: • Housesitting. This is a great idea and can be used by people to save for their first home. • Your “sweat equity”. Leveraging Dean’s skills to update your own home and now your investment property. • Buying older homes rather than a new or fully renovated home. You can get some great prices for these types of homes – it you are…

Excellent question, Vivek. It’s a common dilemma. It’s also complex! Funnily enough, it’s not the money part that’s complicated. I know mortgage deductibility, capital gains tax and so on can be tricky, but these are not really the big issues here. So let’s deal with them first. Whether you pay down your mortgage or buy an investment property is just about risk and return. Hopefully, you are not paying any more than 3.5% on your mortgage. If you are, shop around and change. But let’s use that for our base case. Any money you put into your mortgage should be into an offset account. First, it gives you access to your money when But here’s the rub! Paying down your mortgage is virtually risk free. Any investments will have risk…

Obsessive mainstream media reports would have you think Sydney and Melbourne are the only places seeing improved property markets, but Brisbane, Adelaide and Canberra are also ready to take it up a notch as local infrastructure projects begin. Slower economic growth means it’s ever harder to find bargain share prices, but there are several sectors and companies you can turn to that will help navigate the low-interest-rate environment. This year property guru Terry Ryder and Jessica Amir, a shares expert from Bell Direct, showcase where they see the greatest value, revealing their top 50 property hotspots and share buys. • 5 standout locations, page 38 • 5 standout shares, page 43…

STANDOUT LOCATION: City of Moreland: This precinct was highly resilient to the post-boom correction, especially the unit markets in suburbs like Brunswick and Coburg. Proximity to the CBD, good transport links and a major education/ medical employment hub are among the core factors driving the Moreland market. Apartments remain affordable for first home buyers. 2019 reviewed Bendigo: Regional Victorian did well, with Bendigo one of the best. Suburbs like Heathcote (up 21%) and East Bendigo (16%) had big price growth. Rents rose, with vacancies below 1.5% in many postcodes. The elements that drove the previous Melbourne boom – a strong local economy, population growth and infrastructure spending – remain very much in play, Melbourne’s upper end came roaring back towards the end of 2019, in the post-election revival. Unlike Sydney,…

STANDOUT LOCATION: City of Marion: Tonsley Innovation District is now home to 30 research, technology and science businesses, plus a new teaching hospital and university campus. Major transport projects are improving the connectivity between freight hubs and seaports. Marion offers suburbs with houses priced in the $400,000s, plus low vacancy rates. 2019 reviewed Port Adelaide-Enfield: Adelaide overall moved only moderately, but many Port Adelaide-Enfield suburbs did better. Broadview rose 12%, while others (such as Gilles Plains and Lightsview) managed 6%-7%. Adelaide is one of the standout markets among capital cities but receives little recognition. Its consistent sales performance is noteworthy and almost two-thirds of its suburbs have had price growth in the past year, led by double-digit rises in some markets. I see Adelaide as Australia’s most underrated market. It…

When building an investment portfolio, it’s important to diversify across asset classes. Typically the different asset classes are defined as Australian shares, international shares, property, bonds and fixed income, cash and gold. A diversified portfolio will smooth out your returns and ensure some downside protection. Bell Potter’s research has found that over the past 10 years a high-growth portfolio (45% Australian shares, 35% international shares, 10% property, 5% bonds and 5% gold) generated a better return and had less risk (volatility) than a portfolio of just Aussie shares. With this in mind, when you look at our top 50 picks for 2020, consider where and if the stock would fit into your asset allocation in your Australian share exposure. However, in singling out just five stocks from Bell Potter’s research,…

It’s hard to imagine how far we can expect to go unless we look back to see how far we have come in the past decade. Wearable technology such as the smartwatch was released in 2004, with probably the most popular, the Apple Watch, first released in 2015. It is now in its fifth iteration and offers GPS, Apple Pay, banking, menstrual cycle tracking and heart monitoring. Those old enough will remember the watch phone of the 1960s comic book detective Dick Tracy – at the beginning of 2010 it was not a reality for most of us. Regarding banks, at the beginning of the last decade there were the four pillars plus a few regional banks; today a number of digital neo banks have popped up offering new options…

How do you give the gift of financial support to a friend in need without offending them? As Valentine’s Day comes around this month, we are reminded how important it is to show love to the ones close to us. Nowadays we are getting much better at expressing love to someone we are in a close relationship with, but many of us struggle to show love to our friends, particularly in the form of a financial gift to help them out when the chips are down. It’s one of the great dilemmas in life: how do you give money to a friend in need without them feeling embarrassed, patronised or belittled? And why is it so hard to talk about? For most people, simply talking about finances is an emotional…

Investors who have put their faith in Australian real estate investment trusts (A-REITs) have done well over the past few years. Performance of the sector was up 24.86% in the year to November as measured by the S&P/ASX 300 A-REIT index. Longer-term returns are also sound, 13.58% a year over three years and 13.17% a year over five. But behind the headline performance there are winners and losers among the funds. For example, based solely on price performance the Charter Hall Group (CHC) is up 47% for the year to date (December 16), whereas the Scentre Group (SCG) is down 5.3%. For investors looking for A-REITs that will outperform in the future, a comprehensive Australian property sector report from investment bank Morgan Stanley raises some interesting themes that it says…

Many young adults juggle part-time work with different employers while studying, eventually landing up with several inactive default super accounts. The fees in each eat away at the small amounts of money sitting there. But there’s good news on this front and it will hopefully encourage young adults to focus more enthusiastically on their savings and monitor how their fund is performing. Last year the federal government introduced a package of reforms entitled Protecting Your Super. Accounts under $6000 that are inactive for over 16 months will be transferred to the tax office for consolidation with the member’s active account; fees on small accounts are now capped at 3% a year; and exit fees, which acted as a disincentive to consolidate, are banned. And from April 1 this year, life…

In this issue last year, we kicked off a new series aimed at finding the Best in Breed investments in each broad ASX sector (plus a couple of bonus ideas). When I put pen to paper, there was no inkling that 2019 would be one of the best years in recent history, or that the return would be 2.5 to three times the average annual gain. It’s a reminder of the folly of trying to guess where the market is heading. Instead, we focused on finding the best businesses on the basis that, over time, the cream tends to rise (as long as prices aren’t too silly). It’s an approach I’m confident will bear scrutiny over the long term, so we’re going to do the same again this year –…