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Quarterly Economic Update: October-December 2024

14 January, 202521 January, 2025 Updated on21 January, 2025 Economy, Finance, Investing

The final quarter of 2024 reflected a mixed economic landscape. While consumer spending and equity markets showed resilience, persistent inflation, cost-of-living pressures and a cooling housing market have tempered optimism. Interest Rates – Will They Rise or Fall? Inflation in Australia showed signs of easing during the final months of 2024, with the trimmed mean inflation rate falling to 3.2% in November, down from 3.5% in October. The RBA held the cash rate steady at 4.35% during its December meeting, emphasising the need to maintain current policy settings to bring inflation back within the target range over time. Monthly consumer price index (CPI) data for November indicated a 2.3% rise in the 12 months to November 2024, up from a 2.1% rise in October, according to the Australian Bureau of Statistics. Economists remain divided on whether further rate hikes will be necessary in 2025, with some predicting a rate cut as early as February. Cost of Living Pressures Continue Total spending across the Australian economy increased by 1.5% in the September quarter of 2024 compared to the 2.2% in same period of 2023. Essential spending has decreased in the same period due to a decline in petrol prices and various energy relief programs. Discretionary spending increased by 0.8% compared to the same period in 2023, indicating potential signs of recovery. However, data shows that young Australians cut back spending 2% over the past year, while those aged over 60 increased their spending by 3.9% and those over age 70 increased their spending by 7.7%. Black Friday Means Big Spending Australians spent approximately $7 billion in November’s Black Friday and Cyber Monday sales – a 4% increase compared to the same period in 2023. This rise was driven by strong demand for electronics, apparel, and household goods. In-store shopping experienced a notable resurgence, with physical stores accounting for a significant portion of the sales growth. Is the Housing Market Finally Slowing? Australia’s housing market experienced a slight downturn, with national home values recording their first decline in nearly two years. CoreLogic data for December shows a 0.1% decrease in dwelling values, driven by higher interest rates, reduced borrowing capacity, and increasing cost-of-living pressures. The supply of new housing remains constrained, exacerbating affordability challenges. Global Outlook for 2025 Globally, the economic outlook remains resilient, despite significant risks. According to the OECD, global growth is expected to stabilise at around 3% in 2025 and 2026, underpinned by robust performance in emerging economies and gradual recovery in advanced economies. Geopolitical tensions, including conflicts in Ukraine and the Middle East, continue to pose challenges to supply chains and energy markets. Persistent inflation in key regions and the potential for monetary tightening remain areas of concern. For Australia, economic ties with China and commodity exports are key factors influencing the outlook, especially as China’s economic activity shows signs of stabilising. Trump’s Inauguration Looms The inauguration of the Trump administration on January 20th has prompted considerable speculation about potential economic implications. Key areas of focus include trade policy shifts, tax reforms, and geopolitical stability. Early indications suggest a renewed focus on protectionist policies, including higher tariffs on imports from key trading partners. For Australia, this could mean increased challenges in sectors like agriculture and mining, where access to the US market is critical. Stock Market Outlook Australian equities ended the year on a positive note, buoyed by easing inflationary concerns in the US and hopes of a soft landing for the global economy. The ASX200 recorded modest gains in December, aligning with broader global trends. However, analysts caution that 2025 may bring volatility, driven by geopolitical risks, fluctuating commodity prices, and uncertainty in monetary policies. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Investing for income

31 December, 202421 January, 2025 Updated on21 January, 2025 Education, Investing

Share markets are renowned for taking unexpected downturns and while history shows that markets eventually recover, this rebound in value can occasionally take time. Investors concerned about this risk might consider a stronger focus on income-generating investments. These can range from those that have no potential to lose capital value to ones with a higher risk of capital loss. Outlined below are some options. Investments with no ‘growth’ component The following will give you back what you put in plus interest: Online savings accounts pay a higher rate of interest because there is less cost involved in managing these accounts. The customer “does all the work” meaning the bank doesn’t need to allocate staffing resources. Interest on these accounts can vary substantially between providers and there can be enticing offers of extra or bonus interest for new customers or if you maintain a certain balance. The best advantage of these accounts is that you have access 24/7 to your funds. Cash management trusts are investment products which pool the deposits of other unit holders for investment in cash securities. Interest is calculated daily. There are no entry fees but most charge management fees. They frequently have minimum withdrawal amounts and may require notice to withdraw funds, however the trustee can decide to restrict withdrawals if it deems this is necessary in the best interests of the trust investors. CMTs are good for holding cash that is not needed for everyday living but offer easier access than term deposits. Term deposits can pay a higher interest rate than cash management trusts, although in more recent years, rates on term deposits are close to those offered for online savings accounts. The downside is that your funds are unavailable for the deposit term and penalties apply if you withdraw your money before the term expires. Terms range from three months to several years so you can choose the timing to suit your needs. Income can be paid regularly or at the end of the term. Investments that adjust in value to interest rates in the market: Fixed interest managed funds invest in bonds and bank bills, known as debt securities. Like cash management trusts, they pool investors’ funds to provide access to investments at the big end of the market. These are often used as the fixed interest component in a portfolio. They can have a wide range of fees depending on the underlying investments and may have a small growth component. Convertible notes are offered by companies and unit trusts. They can offer a good interest rate and at the end of the specified term the investor can choose to convert the notes to shares in the company or get their cash back. These are frequently traded on the stock exchange. The sale price depends on the market interest rates and market attitude to the company. Hybrid securities are investments that combine the elements of debt and equity. They are offered by companies that borrow from their investors and pay back the interest. However, if the company disappoints the market the underlying value can reduce. These securities generally have long terms (eg. 50 years) and can only be sold on the stock exchange if there is demand. Investments that have a growth component plus good income potential: Some Australian shares regularly offer fully franked dividends and also give you access to the tax benefits of imputation credits. To get the most from shares they should be held for the long term. Listed and unlisted property trusts are investments that pool investors’ funds to purchase real estate, usually commercial property. Depending on the types of property investments held, they can provide a higher level of income, some of which may be tax-free or tax-deferred. Listed property trusts are traded on the Australia Stock Exchange and provide more liquidity than unlisted trusts. The answer – a balanced portfolio For most investors the best solution is to have a ‘balanced’ portfolio – that is, a selection from each of the different market sectors. This should be tailored to the individual’s needs, providing the level of income required at an appropriate level of risk. To determine what suits your circumstances and needs best, consult with a licensed financial adviser. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Dealing with Post-Christmas Blues

18 December, 202419 December, 2024 Updated on19 December, 2024 Budgeting, Education

The days leading to Christmas, holidays and celebrations are exciting, frenetic times. They’re a whirl of parties and social engagements, gifts and food to be purchased and travel arranged. The rush to get things organised builds into a great festive crescendo then…well, it’s over. If you’ve ever awoken on New Year’s Day feeling a tad flat, you’re not alone. Don’t beat yourself up; the Post-Christmas Blues is a well-documented condition. After the sparkle and colour of festivity, the hamster-wheel banality of real life seems pale and unappealing. Worse, the weather is hot, the kids are bored and fractious, and taking decorations down is never as much fun as putting them up. Then the bills arrive. The despondency you’re feeling is real, in fact, in a 2015 study by the National Alliance on Mental Illness (a US based mental health organisation), two-thirds (64%) of people surveyed admitted to feelings of depression and anxiety after Christmas. Symptoms include fatigue, tension, frustration, sadness and a sense of loss. If you’re nodding while reading this, the good news is there are steps you can take to reduce the physical, emotional and financial impact of the Post-Christmas Blues. Here are some ideas. Exercise – exercise every day, even a walk around the block, and if you have people staying over get up early and take time out for yourself. Get plenty of sleep – stick to a normal bedtime routine and ensure you don’t burn yourself out. Eat and drink in moderation – it’s not called the silly season for nothing. Moderation means enjoying yourself without overdoing it. Maybe try these two simple guidelines: 1. Never go to a party on an empty stomach. 2. Learn to love mineral water. If you feel pressured to drink alcohol, take mineral water and a slice of lime, over ice, in a spirits glass. They’ll never know the difference! Gift buying and holiday arranging is exciting, and it’s easy to lose track of how much you’ve spent. We have 12 months lead time so planning ahead is your best strategy. Consider these ideas: List who you’re buying for and set a spending limit. Don’t feel pressured to spend more or keep up with anyone else. If your credit card has taken a beating over the holiday season, speak to your adviser about a debt reduction plan. They’ll help you get back on track, and then structure a budget for the next year. The December/January period can be difficult for many reasons. If you feel yourself becoming overwhelmed, don’t soldier-on. Organisations like Lifeline Australia (13 11 14) or Beyond Blue (1300 22 46 36) are only a phone call away. Alternatively, if it’s a relaxing chat you’re looking for, why not ask a friend over for coffee? It may be just what they need too. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Investment Deep Dive: HUB24 (ASX: HUB)

13 December, 202416 December, 2024 Updated on16 December, 2024 Podcast

In this episode, we explore HUB24 (ASX: HUB), a $5.9 billion diversified financial services business known for its cutting-edge platform solutions and cloud-based technology. With a 7.5% share of the Australian platform market, HUB24 is a rising competitor against larger providers averaging 14% each. We discuss HUB24’s impressive growth, including a staggering 6,319% return over 10 years and an 875% increase in dividends since 2019. With a strong balance sheet and a debt-to-equity ratio of just 5.8%, the company is well-positioned for continued expansion, including recent acquisitions like myprosperity. Tune in to hear financial insights, analyst valuations, and key takeaways on HUB24’s economic moat, financial health, and future performance, along with the latest news and leadership highlights. Please Note: This is not a buy, nor sell, recommendation. This is general information only. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Rachael Todman, GradDipFP (ASIC Reg 1270413), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Is Debt Consolidation Right for You? A Checklist for Homeowners

12 December, 202412 December, 2024 Budgeting, Education, Finance

Struggling to keep track of multiple debt payments each month? For many Australian homeowners, juggling different debts—whether it’s credit card balances, personal loans, or mortgage repayments—can become overwhelming. Debt consolidation could be a way to simplify finances and regain control. But before diving in, it’s important to understand the ins and outs of debt consolidation, along with the options and risks involved. Here’s a practical checklist to help you assess if consolidating debt is the best solution for your financial situation. Step 1: Understand What Debt Consolidation Involves Before diving into debt consolidation, let’s clarify what it means. Debt consolidation combines multiple debts into a single loan. Instead of paying off several balances at varying interest rates, you roll everything into one payment. This often makes managing your debts easier and could even lower your monthly payments. Step 2: Evaluate Your Current Debts and Expenses Start by listing each debt, including the balance, interest rate, and monthly payment amount. Are your current debts high interest? If so, a lower-rate consolidation loan could help reduce what you pay over time. Tip – Use an online debt consolidation calculator to help compare the cost of consolidating with your current debts. Step 3: Consider Your Debt Consolidation Options When it comes to debt consolidation, homeowners have several options and choosing the right one depends on your financial needs. Here’s how a few of the common options might look in practice: Personal Loan Suppose you have multiple high-interest credit card debts. By taking out a personal loan with a lower fixed interest rate, you could pay off all your cards at once and then make just one monthly payment on the loan, potentially saving on interest and simplifying your finances. Balance Transfer Credit Card Imagine you have a $5,000 credit card balance with a high interest rate. Transferring this balance to a credit card with a 0% introductory rate for 18 months would give you a period of interest-free payments. If you pay off the balance before the promo period ends, you could avoid paying interest altogether. However, it’s essential to stick to a repayment plan to clear the debt before the higher rate resumes. Home Equity Loan If you have equity in your home, this can be an option to access funds at lower interest rates. A home equity loan provides a lump sum that can be used to consolidate debts, while a home equity line of credit (HELOC) works more like a credit line that you draw from as needed. For instance, if you have $15,000 in credit card and personal loan debt, a home equity loan could help you pay off these balances with a lower interest rate, freeing up cashflow. Keep in mind, though, that your home acts as collateral, so this option requires a commitment to regular repayments. Step 4: Check Potential Risks Debt consolidation can simplify finances, but there are risks involved. Here are some to watch out for: After reviewing your debts, consolidation options, and potential risks, take stock. Are you looking for simplicity, lower interest rates, or lower monthly payments? Can you commit to responsible spending to avoid new debt? If you’re still unsure, a mortgage broker can help you assess your options, evaluate potential savings, and choose the best approach based on your financial goals. Take control of your debt today—reach out to a mortgage broker and explore your debt consolidation options. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Investment Deep Dive: CSL Ltd (ASX: CSL)

26 November, 202426 November, 2024 Podcast

In this episode, we analyse CSL Limited (ASX: CSL), a $134 billion market cap biotechnology company specialising in plasma-derived therapies, vaccines, and rare disease treatments. Operating in over 100 countries with 25,000 employees, CSL is a global leader in life-saving medical innovations through its core businesses, including CSL Behring, CSL Plasma, CSL Seqirus, and CSL Vifor. We explore its strong economic moat, financial health, and growth performance, including a 226% increase in dividends over the past decade. Despite recent share price dips, analysts view it as potentially undervalued by 20%. Tune in as we discuss CSL’s long-term prospects, past returns (up 249% over 10 years), future earnings growth potential, and insights into its recent acquisitions and latest announcements. Please Note: This is not a buy, nor sell, recommendation. This is general information only. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Stop resting on your (high income earner) laurels!

19 November, 202429 October, 2024 Updated on29 October, 2024 Education, Investing, Superannuation

Achieving a high income is a significant accomplishment. You’ve put in the hard yards, climbed the ladder, and now you’re pulling in the big bucks! But don’t be mistaken; a high income does not automatically equate to financial security. Just because the money is rolling in today doesn’t mean you’re protected from tomorrow’s uncertainties. Resting on your high-income earner laurels, assuming that a large salary guarantees long-term security without considering long-term financial planning, can be downright risky. So, before you get too comfortable, it’s time for a reality check. When “More” Becomes the Norm Earning more often leads to spending more, a phenomenon known as lifestyle inflation. As your income grows, so does your desire for bigger and better things—a nicer house, a new car, dinners at fine restaurants. This lifestyle upgrade can feel deserved, but without careful planning, it can leave you no better off financially than when you earned less. For instance, imagine a couple earning a combined $350,000 a year. On paper, that sounds like a strong financial position. But between a large mortgage, car loans, private school fees, and regular international holidays, their expenses could easily absorb most of their income. If an unexpected event like a job loss or economic downturn were to happen, they’d find themselves in a precarious situation, with little financial buffer. This is the danger of lifestyle inflation: it’s subtle and easy to justify, but it can undermine your ability to build real wealth. High Income ≠ Financial Security A high income can create the illusion of financial security. It’s easy to assume that as long as the money is coming in, you’re set for life. But without the right safeguards in place, a high income can actually mask financial vulnerabilities. Take Liam, for example. Liam, a 34-year-old marketing executive in Sydney, was earning $250,000 a year and living a pretty comfortable lifestyle. He assumed his high income meant he was financially secure. But when the pandemic hit, his job was made redundant, and without an emergency fund or sufficient savings, Liam found himself in financial distress within months. Liam’s story illustrates a key point: a high income is not a substitute for financial planning. If your finances aren’t structured to handle changes, even a hefty salary won’t protect you from financial uncertainty. How to Future-Proof Your Finances So, how do you make sure you’re not resting on your laurels, assuming that your high income will take care of everything? Here are some strategies to ensure you’re future proofing your finances, no matter how much you earn. 1. Create a Budget and Stick to It A budget is just as important for high earners as it is for those with more modest incomes. Avoid the temptation to spend simply because you can. Instead, allocate funds towards savings, investments, and building an emergency fund. 2. Build an Emergency Fund Even high earners need a safety net. A good place to start is having 3-6 months of living expenses in an emergency fund. This ensures that if something unexpected happens you’ll have the financial resources to cover your expenses without going into debt. 3. Invest Wisely Don’t rely solely on your salary—make your money work for you by building a diversified investment portfolio. The earlier you start, the better, as even small investments can grow significantly over time thanks to compound growth. Don’t wait—time is your biggest asset when investing! 4. Plan for the Long Term Even if retirement seems far away, it’s never too early to start planning. Superannuation is a tax effective structure for building wealth and making contributions to super can be a tax effective strategy for high income earners! 5. Don’t Overlook Insurance Insurance might not be the most exciting part of financial planning, but it’s essential. Income protection, life insurance, and health insurance are vital tools to safeguard your financial future. Take Control Before Life Happens While earning a high salary certainly opens doors to a more comfortable lifestyle, it also comes with the risk of complacency. The belief that you’re financially set simply because you’re earning more is dangerous. Lifestyle inflation, lack of an emergency plan, and failure to invest wisely can all leave you vulnerable when life throws a curveball. It’s not about depriving yourself of the things you enjoy—it’s about ensuring that your financial future is secure, so you can continue enjoying them for years to come. So, don’t rest on your laurels. Take proactive steps now to secure your financial future. You’ve worked hard for that high income. Now its time for that income to work for you! The information provided in this article is general in nature only and does not constitute personal financial advice. 

Horror $47,000 cost blows up the owning vs. renting debate: ‘More expensive’

14 November, 202414 November, 2024 Budgeting, Education, Finance

Financial advisor Robert Goudie has warned Aussies about the extra costs involved in owning a home and that renting isn’t always dead money. You might have heard the phrase that renting is “dead money” or that you’re just “paying off someone’s mortgage”. When you’re forking out hundreds of dollars a week to keep a roof over your head, that idea can seem fairly depressing. But Consortium Private Wealth financial advisor Robert Goudie wants Aussies to change their mindset when approaching rental payments. He told Yahoo Finance that while property ownership should still be a major goal for Aussies, it’s not always the most ideal situation and you shouldn’t rush into it without understanding what you’re paying. “From what I’ve seen, sometimes it’s more expensive to own the property because no one thinks about the cost of ownership, which is your rates, and your insurance, and your water and service charges. and any maintenance that might be applicable,” he said. He wanted to set the record straight and did the calculations for how much you can save when you rent. Goudie gave an example of Person A who was spending $500 per week on a house worth $750,000 and Person B who bought a $750,000 house and lived in it. Person A would have spent $26,000 in a year on rent. However, the other person, who stumped up an impressive $100,000 deposit and had a 6.5 per cent interest rate on their loan, would have paid $42,250 just on the interest for the mortgage. When you add on rates and insurance costs, the annual bill rises to $47,250, or just short of $910 per week. That means Person A will be able to save $410 more per week than Person B. “People say rent is always dead money. Is interest not dead money? Paying money to a big corporation making billions… I think it is,” Goudie explained to Yahoo Finance. “If rent is dead money, then interest should be considered dead money as well.” Buying might not be the best idea right now The financial advisor wants this general advice to be a warning for Aussies to do the calculations themselves to work out if buying a property is going to be the best financial move for them. “I don’t blame young people for wanting to get on the property ladder… there is that feeling of, ‘If I don’t get in now, [property prices] just keep going up’,” Goudie explained to Yahoo Finance. However, he gave an example of a client who has a home, but the mortgage repayments are so much higher than the rent he used to pay that he now feels “guilty” about having a coffee at a cafe. “That’s not living,” Goudie said. What about capital growth? Yes, there is the very real elephant in the room about the big difference between renting and owning a property. When you have bought a home, you will hopefully be able to live in it when it’s fully paid off. In that case, it’s far cheaper than renting. You can also use it as equity to buy another property or you could sell it for more than what you paid for. Goudie pointed out that not every home that is bought benefits from capital growth and can sometimes go down in value, which is what is being seen in parts of Melbourne this year. But even if it does go up in value, you can’t use that capital growth in the short term to pay for your food or keep the lights on. The financial advisor said his weekly cost comparison was designed purely to compare “apples to apples”. Many Aussies think property ownership is out of reach Goudie admitted that while you might save hundreds of dollars a week by renting, it’s not a long-term and secure way to look at accommodation. “I can’t imagine myself at age 85 renting with the threat of being kicked out at a moment’s notice, because in Australia, we do not have long-term lease or rental agreements,” he said. “There needs to be changes in that space.” But for many Aussies, the idea of owning a home is a distant or even completely out-of-reach concept. According to new research by Australian Housing and Urban Research Institute (AHURI), three in five renters expect they will never own their own home. “This shows a significant shift for Australian renters,” lead researcher Professor Emma Baker of the University of Adelaide. “Whereas previously anyone who desired home ownership believed they would be able to move into that tenure, now more Australians are conscious that this dream may not be a possibility for them.” Property prices have been soaring in cities across Australia at the same time that inflation and stagnant wage growth have impacted many peoples’ wallets. But this isn’t just a young Australian issue either. AHURI’s research found the proportion of people renting in the private market has increased across all age brackets from people in their late teens to their 80s and above. “The rise of renting in Australia is a multigenerational phenomenon,” Professor Baker said. Source: https://au.finance.yahoo.com/news/horror-47000-cost-blows-up-the-owning-vs-renting-debate-more-expensive-053110244.html The information provided in this article is general in nature only and does not constitute personal financial advice. 

Bad Habits of Ineffective Investors

12 November, 202412 November, 2024 Podcast

In this episode, Rob and Amy draw inspiration from the insightful article Nine Bad Habits of Ineffective Investors: Common Mistakes Investors Make by Dr. Shane Oliver, Head of Investment Strategy and Chief Economist at AMP. They explore why seemingly logical actions often lead to poor investment outcomes, and discuss why habits like following the crowd, over-relying on past performance, and frequently checking your portfolio can derail your financial goals. Rob and Amy share practical strategies for avoiding these mistakes and emphasise the importance of a long-term investment plan that aligns with your financial goals and risk tolerance. Tune in to sharpen your investment strategy and steer clear of costly missteps. Article referenced in recording:Nine bad habits of ineffective investors: common mistakes investors makeDr Shane Oliver Head of Investment Strategy and Chief Economist, AMP https://www.amp.com.au/content/dam/amp-au/documents/insights/mistakes-oi-30-2024.pdf Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Investment Deep Dive: LVMH (Louis Vuitton Moët Hennessy)

7 November, 20247 November, 2024 Podcast

In the fourth episode of our new series on the Investment Motivation podcast, Rob Goudie and Rachael Todman take a deep dive into LVMH, the world’s leading luxury goods company. They explore what makes LVMH unique, from its diverse portfolio of iconic brands like Louis Vuitton and Moët & Chandon to its recent financial performance, growth prospects, dividend policies, and analyst valuations. Rob and Rachael also highlight the ownership structure, led by Bernard Arnault and his family’s significant stake, and provide insights into the latest news impacting the luxury giant. Don’t miss this comprehensive breakdown of what drives LVMH’s market success and potential future challenges. Please Note: This is not a buy, nor sell, recommendation. This is general information only. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Inflation vs. Your Savings

5 November, 202424 October, 2024 Updated on24 October, 2024 Economy, Finance, Investing

Inflation is a slow force working against your financial goals. It can quietly erode the purchasing power of your money over time. While it’s tempting to see cash as a safe haven, failing to factor in inflation could mean your savings are worth less when you need them most. So, let’s dive into the showdown between inflation and your savings, and explore strategies to fight back! Inflation’s Erosion of Cash Returns The Reserve Bank of Australia (RBA) defines inflation as “an increase in the level of prices of the goods and services that households typically buy”. When inflation goes up, the value of each dollar you own decreases, meaning you can buy less with the same amount of money. This becomes a real concern for investors who rely on cash or low-risk investments like term deposits, where returns may not keep up with inflation. For instance, if you’ve placed your money in a term deposit earning 5% interest, but inflation is running at 6%, you’re effectively losing 1% of purchasing power. This is what’s known as the real return – the return on your investment after adjusting for inflation. A return of 5% may look good on paper, but in real terms it means you’re going backwards. Long-Term Investment Strategies So, how can you prevent inflation from chipping away at your savings? One effective approach is to adopt a diversified investment strategy. Diversification involves spreading your investments across various asset classes such as shares, property, bonds, and international assets, rather than keeping all your money in cash or low-risk products. Equities, for example, have historically outpaced inflation over the long term. While shares can be volatile in the short run, their potential for higher returns helps them beat inflation over time. Property investments also have a history of delivering inflation-beating returns, as the value of real estate typically rises along with inflation. Exchange Traded Funds (ETF) may be a useful way to diversify your investments that are both simple and low-cost. A well-diversified portfolio ensures that you’re not overexposed to any one asset class. Instead, you benefit from the potential growth of various sectors, reducing your overall risk and improving your chances of keeping pace with or even outpacing inflation. Practical Advice for Investors Investing during inflationary times can feel overwhelming, but there are several steps you can take to safeguard your wealth: The Bottom Line Inflation can have a serious impact on the value of your savings, particularly if you rely on cash or low-risk investments. Over time, even a modest inflation rate can significantly reduce your purchasing power. By diversifying your investments, staying informed, and seeking professional advice, you can set yourself up to win in the showdown between inflation and your money. The information provided in this article is general in nature only and does not constitute personal financial advice. 

How to retire on $650k as a non-home owner couple

29 October, 202429 October, 2024 Podcast

In this episode of the Investment Motivation podcast, Rob Goudie and Amy Lehmann break down retirement planning for a non-homeowner couple with $650,000 in savings. They explore spending strategies, tax structures, and essential planning steps to ensure both partners’ financial security. Also included is pension eligibility, strategies for optimising the assets test, and ways to maximise super contributions and income. Join Rob & Amy as they guide you through practical options to make $650,000 stretch further in retirement. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Investment Deep Dive: ASML Holding

24 October, 202424 October, 2024 Podcast

In this third episode of our new series on the Investment Motivation podcast, Rob and Rachael take a deep dive into ASML Holding (originally standing for Advanced Semiconductor Materials Lithography), a leader in semiconductor manufacturing equipment. They explore ASML’s business model, its dominance in EUV lithography, financial health, and growth prospects. With insights into past performance, future earnings projections, and analyst recommendations, this episode covers everything investors need to know about ASML’s position in the global tech market. Please Note: This is not a buy, nor sell, recommendation. This is general information only. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Investment Deep Dive: Lovisa

22 October, 202422 October, 2024 Podcast

In the second episode of our new series on the Investment Motivation podcast, Rob Goudie and Rachael Todman analyse Lovisa Holdings (ASX: LOV), a fast-growing fashion jewellery retailer. With over 900 stores worldwide and a focus on affordable, trendy accessories, Lovisa has become a $3.9 billion company. Tune in as they discuss Lovisa’s rapid global expansion, strong brand presence, financial performance, and investment potential, while also examining the risks and rewards for investors in this competitive sector. Please Note: This is not a buy, nor sell, recommendation. This is general information only. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

What are the risks of small cap stocks

22 October, 202422 October, 2024 Podcast

In this episode, Rob and Amy explore the risks of investing in small cap stocks. While these companies offer the potential for significant long-term growth, they also come with higher volatility. Tune in as they discuss the sectors that may carry more risk and the challenge of ‘trying to find a rocket under a rock’ in the small cap space. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Investment Deep Dive: Microsoft

17 October, 202417 October, 2024 Podcast

In this first episode of a new series on the Investment Motivation podcast, Rob Goudie and Rachael Todman dive into all things Microsoft from an investment standpoint. They explore 9 key aspects of this tech giant’s business, from its diverse product range to its cloud dominance, analysing what makes Microsoft a leader in innovation. With discussions on its financials, investment potential, and why it remains a top choice for investors, this episode offers valuable insights into one of the most influential companies in the world. Please Note: This is not a buy, nor sell, recommendation. This is general information only. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Learning from past investment mistakes

17 October, 202417 October, 2024 Podcast

In this episode, Rob and Amy reflect on past investment failures, exploring what went wrong and the lessons learned. They share insights on how to spot potential pitfalls and avoid repeating the same mistakes in your own future investments. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Education Bonds Explained: with Marie Lazar

17 October, 202417 October, 2024 Podcast

In this episode, we sit down with Marie Lazar from Futurity Investment Group to explore the incredible benefits of investment bonds for securing your children’s or grandchildren’s financial future. We discuss how these bonds not only provide tax-efficient growth but also offer valuable estate planning features, allowing you to set up a lasting legacy for your loved ones. Whether you’re looking for a smart way to invest or seeking peace of mind with future planning, this episode is packed with insights that can help you make the right decisions for your family’s financial wellbeing. Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Meeting our investment mentor: Peter Thornhill

17 October, 202417 October, 2024 Podcast

In this episode, Rob & Amy chat with their investment mentor Peter Thornhill about all things investing… Including the popularity of property investment in Australia, the influence of his overseas experience on his investment philosophies and much, much more! Don’t miss your chance to learn from one of the absolute best! To find out more about Peter and his Motivated Money book visit https://motivatedmoney.com.au/?v=8bcc25c96aa5 Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

Quarterly Economic Update: July-September 2024

10 October, 202410 October, 2024 Economy, Finance, Investing

The Australian economy is still growing, but things are moving slower than usual, and the Reserve Bank of Australia (RBA) is being cautious with any changes to interest rates. They’re waiting for inflation to settle before taking further action. GDP Growth: Slowly But Surely While the economy is growing, it’s not as fast as we might like. Over the June quarter, the economy expanded by just 0.2%, with a 1.5% growth over the financial year. While these numbers sound positive, when you factor in Australia’s growing population, the story changes. For the sixth quarter in a row, GDP per capita (which looks at economic growth per person) has actually fallen. This shows that while Australia as a whole is growing, individuals may not feel that impact, especially with rising costs of living. Interest Rates: Holding Steady In September, the RBA decided to keep interest rates on hold at 4.35%, with the next decision due in November. While the US recently cut rates, Australia hasn’t followed suit, and it’s unlikely we’ll see any rate cuts before Christmas. The RBA is holding off to ensure inflation is well under control, despite it being much lower than the peak in 2022. Inflation: Better But Still Stubborn Annual inflation hit 3.8% in the June quarter, slightly up from March. However, there’s good news: underlying inflation (which strips out the more volatile price changes) has been falling for six straight quarters, down from its peak of 6.8% in late 2022. That said, prices for everyday goods remain high, and the overall cost of living is still squeezing households. Households Are Tightening Their Belts With cost-of-living pressures building, many Australians are cutting back on things like travel and entertainment. Even grocery spending is down, with households trimming their food budgets by 1%. However, spending on household goods, like furniture and appliances, increased by 4%, which propped up discretionary spending overall. Housing Market: Prices Still Going Up The property market remains strong, with housing values continuing to rise across Australia, although at a slower pace than before. CoreLogic reports that the national Home Value Index rose by 0.5% in August and a further 0.4% in September. Despite the cost of living, demand for property remains high, which is keeping prices elevated. Jobs Market: Still Tight, But Productivity Is Falling Australia’s unemployment rate remains low, sitting at 4.1% as of June, which is historically strong. However, total hours worked rose only slightly, and productivity—measured by GDP per hour worked—fell by 0.8%. While jobs remain secure for many Australians, people are working more for less output, and this could become a concern for long-term economic stability. Global Outlook: Uncertainty Ahead Globally, central banks are starting to look at easing monetary policies, but it’s still unclear how much they’ll ease up. Ongoing conflicts in the Middle East, Ukraine, and northern Africa are causing further instability. Meanwhile, Asia’s economy, a key trading partner for Australia, is expected to slow in 2024, which could have a knock-on effect on our own economic growth. What It All Means for You For everyday Australians, the combination of high interest rates, sticky inflation, and rising living costs means it’s more important than ever to manage your finances carefully. Mortgage holders won’t see relief from rate cuts soon, and households should continue to be mindful of their budgets, especially with the cost of essentials like groceries and petrol still fluctuating. If you’re feeling the pinch, now is a good time to seek professional advice and ensure you have a financial plan in place that helps you navigate these uncertain times. The information provided in this article is general in nature only and does not constitute personal financial advice. 

When debt collectors call, know your rights

7 October, 20248 October, 2024 Updated on8 October, 2024 Budgeting, Education

Debt is a fact of life; some might say it’s a necessity. Rarely is a home or large-ticket item purchased without finance of some kind. Australians typically manage their financial obligations well, but rising interest rates, cost of living pressures and unexpected expenses combine to place stress on a household budget. In an increasingly cashless economy, it’s difficult to keep track of spending, and before you can say, tap-and-go, the morning latte and toastie has maxed out the credit card. Most people tighten the belt and get back on track. Unfortunately, others find themselves caught in a downward spiral that quickly gains momentum until realising they’re in over their heads. Failure to meet your financial obligations may result in you being contacted by a debt collection agency as creditors seek to recoup their losses. While this is traumatic, keep your cool and remember that you have rights. According to MoneySmart.gov.au a debt collector can only contact you: Debt collectors may: Debt collectors cannot: If you believe a debt collector, or agency they represent, has acted outside of their boundaries, you are within your rights to take action. Violent or threatening behaviour is never acceptable; immediately contact the police. Alternatively, if the collectors are intimidating or harassing you, write to them or their agency to report the behaviour and request it be stopped. If this doesn’t work, reach out to the Australian Financial Complaints Authority on 1800 931 678 for advice. Debt collectors aside, you must take action to manage your debt. No debt ever went away because it was ignored, but there are ways to dial down the pressure. Here are some steps you can take today to get started: You can also seek professional assistance from a qualified financial adviser. They’ll work with you to create a realistic strategy for managing your expenses and guide you in developing a plan to move forward and eliminate debt. Debt can be debilitating and seem overwhelming, but by understanding your rights, knowing where you stand financially and seeking professional advice and support, you can take back control of your finances and look towards a comfortable financial future. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Loud budgeting: Amplifying your financial awareness

24 September, 202424 September, 2024 Budgeting, Education

Saving for a first home often requires a significant amount of discipline and sacrifice. The challenge of accumulating the necessary deposit can feel overwhelming, making it difficult to maintain motivation. Everyday distractions, such as weekend outings with friends or the latest gadgets, can easily derail savings efforts. A common issue is the perception that long-term savings goals are unattainable, which can lead to a lack of motivation to forego immediate pleasures. Traditional methods of managing finances may not always address this issue effectively. Enter loud budgeting—a strategy designed to tackle these challenges head-on. Loud budgeting is a goal-oriented approach that involves openly sharing savings goals with trusted friends and family, creating a system of accountability. The transparency of loud budgeting helps maintain focus and drive. Here’s how loud budgeting works: Incorporating loud budgeting into your routine can transform the savings process into a structured and motivating experience. Each progress update on the tracker brings a sense of accomplishment, and reaching milestones is celebrated with those who offer support. Consider a scenario where you aim to save $20,000 for a home deposit within 16 months. By adopting loud budgeting, you break down the goal into manageable monthly targets. For example, you set a target to save $1,250 each month. At the beginning of the process, you create a colourful chart and track your progress regularly. You use budgeting apps to monitor your savings and share updates with your support network. Every time you hit a monthly target, you celebrate with your family or friends, reinforcing your commitment. Over the course of these 16 months, this approach helps maintain your motivation despite encountering challenges such as missed trips or unexpected expenses. By consistently tracking your progress and celebrating milestones, you remain focused and driven. As each milestone is achieved, the sense of accomplishment grows, making the final goal of reaching the $20,000 deposit feel attainable. By the end of the 16 months, you successfully reach your target amount. The journey has been marked by steady progress, accountability, and shared celebrations, showing how loud budgeting can make saving for a home feel like a rewarding team effort. Loud budgeting might not be for everyone, but it’s a great way for many people to hit their financial goals. It can make saving for a home feel like less of a solo mission and more of a team effort that’s both rewarding and fun. The information provided in this article is general in nature only and does not constitute personal financial advice. 

How to save tax in Australia

17 September, 202419 September, 2024 Updated on19 September, 2024 Podcast

Rob & Amy discuss all things tax this week, exploring the tax implications of investment properties, and how Aussies use negative gearing as an investment strategy. They also challenge the common biases many have towards property, comparing its returns with other tax-saving opportunities. Here’s a question for you: Have you crunched the numbers to see if your negatively geared property delivers better returns than investing in the ASX? Something to think about! To view the video version of this episode visit https://youtu.be/HIfmtb5pN0Q Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

What to expect: First appointment with a Financial Adviser

12 September, 202419 September, 2024 Updated on19 September, 2024 Podcast

In this episode, Rob & Amy walk you through what to expect during your first visit to a financial adviser. From understanding your financial goals to discussing strategies for your future, you’ll get an inside look at how advisers work to tailor their advice to your personal needs. And you’ll discover why we might be a little different at Consortium Private Wealth… To view the video version of this episode visit https://youtu.be/8MvkRJfrYNU Robert Goudie, CFP, GradDipFP (ASIC Reg 235974) and Amy Lehmann, BBus (FinPlan), BBus (Acc) (ASIC Reg 1292710), are authorised representatives of Consortium Private Wealth Pty Ltd | ABN 74 616 250 965 AFS Licence 495401.

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