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Quarterly Economic Update: January-March 2024

9 April, 20244 April, 2024 Updated on4 April, 2024 Economy, Finance, Investing

The first quarter of 2024 saw the Government roll out considerable changes to the Stage 3 Tax Cuts, inflation continuing to slow but remaining stubbornly high across some areas, surging stock market highs and continuing pressures in the property sector. Government Overhauls Stage 3 Tax Cuts In January, the Labor government unveiled changes to the proposed stage 3 tax cuts, aimed at providing bigger tax cuts to middle Australia. The new changes, which passed the Senate to become law in February, retain the tax bracket that would have been scrapped under the original proposal, and adjust tax rates to benefit both lower and higher-income earners. The changes will take effect from July 1 and are summarised as follows: Taxable Income Bracket Tax rate New Tax Plan from July 1, 2024 Below $18,200 0% $18,200 to $45,000 16% $45,000 to $135,000 30% $135,000 to $190,000 37% Above $190,000 45% Original Stage 3 tax cuts Below $18,200 0% $18,200 to $45,000 19% $45,000 to $200,000 30% Above $200,000 45% Inflation continues to ease Inflation continues on a downward trend, with the RBA expecting it to return to the target range of 2-3 percent in 2025, and reach the midpoint in 2026. Service price inflation remains high despite goods price inflation decreasing, supported by continued excess demand and strong domestic cost pressures. The RBA expects the consumer price index (CPI) to come in at 3.3% by June, compared with 3.9% forecast three months ago. As a result, the board decided to leave the cash rate unchanged at 4.35 per cent at the first official meeting for the year.  Share Market Highs Global share markets have been breaking records this quarter, with the ASX200, S&P500, Eurozone and Japanese markets reaching record highs, helped by US inflation data coming in as expected, leaving the Fed on track to cut rates from mid-year. Whilst economic growth both locally and globally is forecast to slow, there is optimism in the market as inflation has started easing and is likely to continue falling, and central banks across the US, Canada and Europe are expected to start cutting rates in the coming months. Recession still looms as a risk, but it appears the economy may be moving toward a soft landing. Housing market continues to tighten The national vacancy rate fell to a new low of 0.7 per cent in February, highlighting the ongoing supply and demands challenges in rental properties across Australia, as a result of a construction sector under strain, rapid population growth from migration, and rising property prices. Whilst the government has put stricter measures on international students to try to ease demand pressures, supply continues to be an issue, with building approvals falling by 1 per cent in January, though multi-unit dwelling approvals increased by 19.5 per cent in the same period. Property prices continued to rise despite higher interest rates, inflation and cost of living concerns. The Home Value Index was up 0.6 per cent nationally in February, and showed an increase in all capital cities except Hobart. Labour market cooling Labour market conditions cooled over the December quarter 2023, with an ongoing shift away from full-time employment and growth in part-time jobs, and a decrease in recruitment activity. These trends are consistent with Treasury forecasts that growth will continue to ease and the unemployment rate will increase from 3.9 per cent in January to 4.2 per cent by June, and 4.3 per cent by the end of the year. Despite clear softening, labour market conditions remain tight, and many employers are experiencing challenges finding suitable workers to fill positions, while some shortage pressures remain evident. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Avoid passing bad money habits on to your children

26 March, 202419 March, 2024 Updated on19 March, 2024 Budgeting, Education

Generally speaking, we Australians are pretty financially savvy, that is, we understand the how and why of effectively managing our money. Unfortunately, that doesn’t mean we’re actually putting that know-how into practise and making astute financial decisions. According to the Australian Bureau of Statistics (ABS), the average Australian household debt has risen by 7.3% (over $260,000) in the 2021-2022 financial year. As of July 2023, Australians were paying $18.4 billion – that’s billion with a B – in credit card interest every year. As parents, we’re role models, integral to shaping our children’s values and beliefs. Like little sponges, they absorb our behavioural patterns, pick up on signals and mimic our actions. For us to replace bad money habits with good ones may be a big ask, particularly as they’ve evolved over the course of our lives. But the trouble is that kids are a cluey bunch, eager to learn from us, and not surprisingly, our money habits are among many characteristics we unintentionally pass onto them. Of course, we all want the best for our children. But in this busy world, we’re pulled in so many directions at once that sometimes it’s all we can do to juggle our daily work, family, school and social lives. Who has time to consider the inadvertent messages we could be giving out? Yet, when it comes to ensuring our children are equipped to build themselves a secure financial future, it’s worth the effort, right? The table below shows a list of good and bad money habits that are commonly passed onto children. Poor money habits Good money habits Impulse buying We regularly make spur-of-the-moment purchases. Additionally, we tend to indulge our kids – we want them to be happy. Impulsive or indulgent behaviour can inadvertently foster in children an attitude of instant gratification, normalising impulse buying. Lead by example As a family, we discuss the difference between needs and wants. When we see something we want, we walk away and give ourselves a cooling off period to determine whether we genuinely need the item. We encourage our kids to wait for things they want, and suggest that delaying the purchase can lead to smarter choices and savings. When shopping we compare prices and identify items that offer better value. Not budgeting We don’t have a household budget, preferring to manage our money as it comes in. But even though we know what bills are due we often seem to have trouble getting the money together. Sometimes we run out of money before pay day. Not budgeting can engender a culture of living pay-to-pay and children can grow up not understanding the importance of tracking spending and living within their means. Family budgeting We involve our children in creating and monitoring our household budget. We discuss decisions around allocating money for different purposes so that when our kids receive pocket money or gift money, they can practise budgeting by setting amounts aside for saving, spending, etc. Credit card misuse We rarely use cash; using a card is fast and convenient. Although occasionally we max the card out we make sure we pay off as much as we can every month. Some months, depending on expenses, we can’t manage the full balance. Cards, while useful, can cause children to perceive them as a source of unlimited money. No free money We have taught our children how to read our card statements. They know how to check purchases against receipts and understand how interest adds to the card balance. We involve our kids in making card payments and explain the consequences of not paying the full balance each month. Not saving We’ve never set up a structured savings plan so have little-to-no savings. We’d like to take a holiday or have a nestegg for emergencies but there never seems to be any money left over at the end of the pay cycle. Children seeing parents struggling to save may not learn the value of saving or setting goals. Set goals, save We stick to our budget and always try to allocate a portion of income towards savings, and encourage our kids to do the same. We get them to set short-term goals like saving for a new toy or book, and long-term goals like an outing or a larger purchase, and then help them create a savings plan to achieve their goals. We make it fun by using a visual chart to track progress and when they reach their goal, we celebrate the achievement, making a special occasion out of buying the item or attending the event. Failing to discuss We never talk about money with our kids. They have a limited understanding of how money is earned and how we use it. Failing to discuss how money is earned can lead to children not grasping the concept of money as a finite resource, and appreciating its value. Widespread use of credit cards or taking cash from ATMs suggests that money is readily accessible. Have the conversation We have always been open with our kids about the household finances. We want them to understand that money needs to be earned, and if not used wisely and allocated appropriately, it can run out. We have also provided the opportunity for them to earn pocket money for doing age-appropriate household chores. If we can make time to examine the way we view and use money, and replace poor habits with good ones, we can positively influence our kids by: As parents we have a limited opportunity to equip our children with tools like, knowledge, confidence and forward planning skills – before they decide they know more than us! So, by modelling good financial behaviour ourselves, we can instil the habits that will set our children up for a life of financial freedom. I don’t know about you, but if I can achieve that, I’ll know that I’ve done what I can to enable the next generation to succeed and thrive. What a legacy! The information provided in this article is general in nature only…

Couple Goals: Making money work in a relationship

14 March, 20247 May, 2024 Updated on7 May, 2024 Podcast

Join us for a candid discussion on managing finances as a couple… We explore the dynamics of handling money when there’s a single breadwinner, aligning financial goals, and seeking advice when needed. Discover the keys to understanding each other’s money stories, navigating crucial conversations, and tackling tensions in relationships caused by finances. Tune in for insights on building financial harmony in your relationship! 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.

Is Worker’s Compensation Enough?

12 March, 202412 March, 2024 Insurance

No matter what kind of job you have, there is always a possibility of falling sick or getting injured, regardless of the type of work you do. That’s why every Australian workplace has a health and safety obligation to provide a safe work premises, assess risk and have workers compensation insurance. What is worker’s compensation? Worker’s compensation is a form of insurance payment paid to employees if they are injured at work or become sick due to their employment. Payments may cover: The injury or illness must be work-related to receive worker’s compensation benefits. Protection at work A report released by Safe Work Australia in 2023 showed: Whilst worker’s compensation offers some level of protection, it still only protects you for injuries or illnesses that occur at work or as a direct result of work – and then any claim made must meet eligibility requirements. Entitlements and eligibility for payments vary from state to state in Australia. If you suffer from an injury or illness that does not qualify for a workers’ compensation payment, there’s a real possibility that you could be left without income to support yourself and pay for the costs of the medical condition. (An important side note – If you’re self-employed, a sole trader or an independent contractor, you may not be covered under any worker’s compensation scheme, in which case you will need to organise your own protection.) The best way to cover the gap While worker’s compensation is beneficial, it may not provide enough financial support for you and your family, even if you have a successful claim. Considering that the vast majority of Australians suffer from injuries and illnesses not related to work, relying on worker’s compensation alone may leave you short on financial protection. So, how can you ensure you have the best safety to protect yourself when you can’t work? Income Protection Income Protection goes to work when you can’t and can cover you for well beyond what worker’s compensation may provide. Although worker’s compensation might provide some coverage for injuries and illnesses sustained at work, including Income Protection in your personal protection plan can give you peace of mind knowing that you’re covered in various situations, both at and outside of work. This way, your ability to earn an income will be secured. If you want to explore your options for Income Protection, get in touch with your financial adviser today. The information provided in this article is general in nature only and does not constitute personal financial advice. 

From Budgets to Bliss: Tips for Aussie Families

7 March, 202413 March, 2024 Updated on13 March, 2024 Podcast

Join us as we explore the financial journey of a typical Australian couple, late 30s, with two young children and an annual income of $150,000. With expenses at $70,000 annually, we discuss strategies for asset allocation, personal insurance, estate planning, inflation considerations, and children’s future needs. Tune in for insights that will help any Aussie household aiming for financial security and peace of mind. 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.

Charting a course to financial recovery

27 February, 202427 February, 2024 Budgeting, Education, Finance

Australian Bureau of Statistics, (ABS) figures indicate that between 2017-2018 and 2019-2020 total average household debt rose from $190,000 to $204,000. That’s an increase of over 7% in two years! The reasons why would make for an interesting study, however a more pressing question might be what can we do about it? Combine high levels of debt with rising interest rates and a cost-of-living crisis, and it’s no surprise that Australian households are reaching out to Debt Management (DM) companies to help regain control of their finances. DM companies are private organisations that can assist by: Sometimes, DM companies repay your debts – to a specified limit – and you repay them under a single loan arrangement. Terms and payment amounts can be negotiated, offering a beacon of hope and a sense that you’re taking back control. If this sounds like the perfect solution, remember that for every pro, there’s usually a con. For example: While weighing the pros and cons of a DM service, here are a few do-it-yourself strategies for consideration. Budgeting Creating a budget is a 3-step process. The government’s Moneysmart website lists easy ways of cutting back everyday spending. Negotiating Rather than customers defaulting, most banks and utilities companies prefer to negotiate repayment terms, sometimes even offering assistance programs. The key is to reach out before it’s too late. Be upfront about your situation and willing to arrive at a mutually beneficial arrangement. Remember, nobody wins when debts are not paid. Government assistance The Australian government provides a range of financial assistance packages and interest-free loans depending on circumstances. These include crisis payments for unexpected situations, and income support payments for cost of living expenses. Of course there are conditions, but further information, including application criteria, is available from the MyGov website. Financial counselling Financial counsellors help you understand your financial position and assist you to navigate your way out of difficulty. Some local communities offer free, or low-cost, financial literacy programs, aimed at providing education about money and debt reduction. Everyone’s financial position is unique. There’s no one-size-fits-all, so it’s important that your action plan is specific to your needs and that you’re 100% comfortable with any decisions you make. If you’re uncertain, seek the assistance of a qualified financial planner. What’s crucial is that you do something; being proactive is empowering and sets you on the path to financial recovery. The information provided in this article is general in nature only and does not constitute personal financial advice. 

How to retire on $650,000 as a couple

13 February, 202413 February, 2024 Podcast

Unlock the secrets to retiring comfortably as a couple with $650,000 in superannuation and savings. From determining spending limits to optimising tax structures, we cover it all. Learn how to maximise your Centrelink pension benefits while safeguarding assets for the surviving partner, including leveraging exemptions and exploring the Home Equity Access Scheme. Dive into estate planning considerations, including wills and superannuation strategies, and gain practical tips for navigating income and assets tests to maximise pension entitlements. Don’t miss out on expert insights to help you retire confidently. MyValues website: https://www.myvalues.org.au/ 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.

Achieving financial freedom

13 February, 20249 February, 2024 Updated on9 February, 2024 Investing

What does financial freedom mean to you? The ability to travel the world and build a dream home? Or to be able to enjoy a simple but active retirement, and support some good causes? We all have different desires and goals in life, but most of us share the dream that one day we would like to achieve our particular version of ‘financial freedom’. The challenge is that most of us don’t really know what it takes to turn our goals, be they vague wishes or burning desires, into reality. However, with just a little bit of forethought, some expert advice, and by acting on that advice, we are much more likely to reach that goal of financial freedom. Making the list Your key ally in achieving financial freedom is your financial adviser, and amongst the most important things your adviser will need to know is what your goals are. So make a list and prioritise it. Which of your goals are essential, and which ones are you willing to compromise on? Reality check Just as we have different goals, so do we have different financial resources. One of the first things your adviser will do is run a reality check. Given your income and expenditure, job outlook, health and family situation, are your goals realistic and achievable? Your adviser will also check if key goals are missing. For example, life insurance can be an essential tool for protecting your family’s future financial freedom, yet many people overlook it. With the big picture now clear, your adviser can develop strategies that will bring that goal of financial freedom closer to fruition. Perfect timing When’s the perfect time to start your journey to financial freedom? Today. Because the sooner you get started, the sooner your goals will be achieved. So think about your goals and desires. Importantly, write them down. Then make an appointment to sit down with your financial adviser, and take those critical first steps towards achieving your financial freedom. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Smart investing: Strategies for 1K, 5K & 50K budgets

9 February, 202413 February, 2024 Updated on13 February, 2024 Podcast

Join us as we explore practical investment strategies for budgets ranging from $1,000 to $50,000. Whether you’re a beginner or seasoned investor, we offer actionable advice on fund allocation and risk management. Discover low-cost options, diversification techniques, and insights into market dynamics. Learn how to navigate the investment world and achieve financial success… 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 2023 taught us about Investing

6 February, 20247 February, 2024 Updated on7 February, 2024 Podcast

Join us as we unravel the key lessons, insights, and market trends that shaped the investment landscape over the past year. We’re breaking down the important stuff—what worked, what didn’t, and what we can learn from it all. Whether you’re a seasoned investor or just starting out, this episode is packed with easy-to-understand insights that can help you make smarter money moves. Tune in for a simple, practical guide to what 2023 taught us about investing. 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.

Building financial resilience

30 January, 20249 February, 2024 Updated on9 February, 2024 Budgeting, Education, Finance, Investing

Resilience is the ability to quickly recover from setbacks, and while setbacks can come in many forms most of them will have a financial component. So what can you do to build financial resilience? Expect the unexpected Rarely do we get advance warning that something bad is about to happen to us, so the time to develop your resilience strategy is now. And while we don’t know the specifics, we can anticipate events that would throw our finances into disarray. A house burning down or a car being stolen. Not being able to work due to illness or injury. The death of a breadwinner or caregiver. With some idea of the type of threat we face we may be able to insure against some of them. If you have taken out any type of insurance policy you’ve already made a start on your resilience plan. Create buffers You can’t insure against every possibility, but you can build financial buffers. This might simply be a savings account that you earmark as your emergency fund that you contribute to each payday. If your home loan offers a redraw facility you can also create a buffer by getting ahead on your mortgage repayments. Buffers can be particularly important for retirees drawing a pension from their super fund. Redeeming growth assets for cash in order to make pension payments during a market downturn can lead to a depletion of capital and reduction in how long the money will last. By maintaining a cash buffer of, say, two year’s worth of pension payments, redemptions of growth assets can be deferred, giving time for the market to recover. Cut costs The Internet abounds with tips on how to cut costs and save money. In difficult economic times cost cutting can help you maintain your financial buffers and important insurances. Key to cost cutting is tracking your income and expenditure and yes, that means doing a budget. Find the right budgeting app for you and this chore could actually be fun. Invest in quality There are many companies out there that have long track records of consistently pumping out profits and dividends. They may not be as exciting (i.e. volatile) as the latest techno fad stocks but when markets get the jitters these blue chip companies are more likely to maintain their value than the newcomers. This is important. The more volatile a portfolio the more likely an investor is to sell down into a declining market. This turns paper losses into real ones, depriving the investor the opportunity to ride the market back up again. The other key tool in creating resilient portfolios is diversification. Buying a range of investments both within and across the major asset classes is a fundamental strategy for managing portfolio volatility. With a well-diversified portfolio of quality assets there is less need to regularly buy and sell individual investments. Unnecessary trading can create ‘tax drag’ where the realisation of even a marginal capital gain triggers a capital gains tax event and consequent reduction in portfolio value. Take advice Building financial resilience can be a complicated process requiring an understanding of a range of issues that need to be balanced against one another and prioritised. Your financial planner is ideally placed to assist you in developing your own, personalised plan for financial resilience. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Active or Index Funds: What’s Your Best Bet?

23 January, 202425 January, 2024 Updated on25 January, 2024 Investing

Ever glanced at a list of different managed funds and wondered why some have remarkably low fees compared to others? Chances are, the ones with lower fees are index funds, also known as passive funds. Over the last couple of decades, index investing has become increasingly popular, with big players like Vanguard and Blackrock managing trillions of dollars in assets (as of 2022). Before we dive into the reasons and consequences of this trend, let’s break down the two main investment styles: Active Investing: Index Investing: So, why has index investing gained so much ground? 1. Lower Fees: 2. Performance Challenges: For instance, at the end of 2022, 58% of Australian General Equity funds returned below the index. Over 5-, 10-, and 15-year horizons, the underperformance proportions were 81%, 78%, and 83%, respectively. Similar trends are observed in international equity markets. While choosing index funds may seem logical, it’s essential to consider their underlying premise. Returns come from income (like dividends) and changes in capital value over time. However, for the latter to happen, there must be market activity—investors trading securities. If everyone exclusively invested in indexes, the market would cease to exist. Index investing doesn’t screen shares, meaning investors get exposure to both ‘good’ and ‘bad’ companies. Also, there are no exclusions based on environmental, social, or governance (ESG) criteria, which some investors prioritise. In the active versus index debate, there’s no clear right or wrong. Many investor portfolios combine both approaches. Index funds or ETFs are often used for broad exposure, while active investment may be reserved for specialised exposure, such as smaller companies, property, or infrastructure. Regardless of your choice—active, index, or a mix—the fundamental principles of investing still apply: diversification and time in the market are key to building long-term wealth. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Nailing your job hunt: A guide for school leavers

17 January, 202410 January, 2024 Updated on10 January, 2024 Education

Every January, countless school leavers across Australia embark on their job-hunting journey. A NSW Government survey conducted in 2021 found that of 42,388 secondary school leavers, approximately 50% continued to higher education, while the remaining 50% chose to seek employment (14% apprenticeship; 13% part-time work; 8% full-time work; 7% looking for work; 5% traineeship; 3% other). That’s roughly 21,000 job-seekers – in NSW alone – hitting the employment market all at once! Extrapolate that across all of Australia, and you see where this is going. Given that a single job advertisement might attract scores of applicants, how can you stand out from the crowd? Drawing attention to your resume is easily achieved with little effort. Consider these points: Soft skills Don’t think you have experience? Think again! Perhaps you’ve done volunteer work, played a team sport, performed in a school play or fed the neighbour’s cat while they travelled. A positive attitude, ability to articulate an idea, reliability, problem solve or work in a team are considered soft skills – and they’re highly prized. Your activities and hobbies tell employers a lot about you. Showcase them on your resume and talk about them during interviews. Resilience and EI Employers value candidates demonstrating emotional intelligence (EI) and resilience. EI behaviours include: taking constructive criticism, displaying empathy and patience with others, resolving conflicts, awareness of cultural sensitivities, etc. Characteristics of resilience include: bouncing-back from setbacks, willingness to change, etc. When you provide examples of these attributes, potential employers gain an insight into how you communicate, develop relationships, support others and motivate yourself and those around you. Digital literacy Get familiar with the corporate software and tools specific to your chosen industry. Study advertised position descriptions to understand what companies are using and their expectations of candidates. Resources like LinkedInLearning have literally thousands of online courses. There may be a subscription fee but – huge tip – many local libraries include free LinkedInLearning access as part of your library membership. Prospective employers will be impressed with your effort to upskill yourself and your commitment to ongoing learning. Your brand Conduct a self-audit of your digital presence. Employers often check social media profiles so it’s important your online views and attitudes align with your professional image. Get active on business platforms like LinkedIn, and share and comment on industry content. Build a network by connecting with professionals in your chosen field and attending business events or workshops. Don’t be afraid to reach out for guidance – most people will be pleased to help. Write a schmick resume Check out the government’s Job Jumpstart website (www.jobjumpstart.gov.au) for hints and a whole lot more on writing effective resumes and cover letters. And here’s another big tip: never underestimate the value of correct spelling and punctuation. If you don’t know the difference between their, there and they’re, or your, you’re and yore, polish your grammar skills and don’t rely on spell-check. And finally… Get interview ready. Anticipate questions and practice responding. Remember that there are very few opportunities in life where you’ll be encouraged to talk about yourself and your achievements. So, without being arrogant or braggy, relax and enjoy the moment. If you’re not successful in securing the job, handle it with professionalism and think about where you might improve. Consider it a learning experience rather than failure! Entering the workforce, applying and interviewing for jobs, can be daunting. But when you do land that gig, there’s no buzz to compare with earning your own money. You’ve made it and you’re announcing to the world: I’m on my way, just try and stop me! The information provided in this article is general in nature only and does not constitute personal financial advice. 

Quarterly Economic Update: Oct – Dec 2023

10 January, 202410 January, 2024 Economy, Finance, Investing

Global growth is forecast to slow and remain below its historical average in 2024, reflective of tighter monetary policy in advanced economies, as well as a soft outlook for China. Australians can expect higher prices, higher interest rates and higher population growth, with economic growth and unemployment decreasing. Inflation continues to bite With a new Governor at the helm of the RBA, and inflation tracking down since its peak in the December quarter 2022, public sentiment hoped that rate rises would be paused. However, the RBA delivered another rate hike at the November 2023 meeting, bringing the official interest rate to 4.35% – the highest level since 2011. It is likely that an increase in the monthly CPI indicator was a key trigger for the RBA to raise rates, as the monthly indicator rose to 5.2 per cent in August, and then rose again to 5.6 per cent in the September data. However, the next monthly data point, for October (which came out after the November rate rise) had inflation decreasing to 4.9 per cent. Services inflation remains high and was the primary driver of stronger-than-expected underlying inflation in the September quarter. Interest rates – will they or won’t they? The RBA continues to be cautious about the inflation outlook for Australia for several reasons: high and sticky inflation in the services market, house prices recovering sooner than anticipated, a tight labour market and increasing population growth due to migration. A survey of 40 economists by the Australian Financial Review shows that the median forecast is that the RBA will start cutting rates in September 2024, whilst the bond market is projecting an easing of rates by mid-2024. The RBA will meet only eight times in 2024, reduced from 11, beginning in February – following an independent review ordered by the Treasury. Coupled with the RBA governor’s commitment to return inflation to the target range of 2-3%, more rate hikes may be on the cards. Holiday spending to remain flat A survey by Roy Morgan forecast shoppers to spend $66.8 billion during the pre-Christmas sales period, only up 0.1% from the same period in 2022, likely as a result of cost of living impacts. Sales spending for the Boxing Day period to December 31 was expected to be about $9 billion, including $3 billion on Boxing Day itself, as retailers prepared larger discounts than usual after a slow year. Hot Property House and unit prices grew steadily in 2023, with a national annual growth rate of 5.42% (6.54% in capital cities). The main drivers include the highest net overseas migration levels ever recorded, few vacant properties and stronger demand for established homes due to the construction industry facing capacity and cost issues. This growth forecast is expected to continue as most experts believe demand for housing will continue to outstrip supply. However, Australia’s cost of living increases and interest rate uncertainty will keep biting—leading to weaker price growth than previous years. The rental market remains in a critical shortage of available dwellings according to SQM Research. Due to the ongoing supply and demand imbalance, the market is expecting capital city rental increases of 7-10% for 2024, on top of an average 10% market increase in 2023. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Post Christmas Sales – A Survival Guide

20 December, 202314 December, 2023 Updated on14 December, 2023 Budgeting, Education, Finance

We’ve all experienced it… the undeniable allure of post-Christmas sales. No sooner has Christmas wrapped up for the year than the frenzy of Boxing Day Sales descends upon us. Every store window beckons, and our inboxes overflow with promises of unbeatable discounts. But before you indulge in some festive leftovers and make a beeline for the air-conditioned wonderland of sales, let’s take a moment to pause and ponder… Is that shiny, discounted gadget truly a necessity? Do those new outfits genuinely add value to your wardrobe? Or might there be a wiser way to allocate your hard-earned money? The Allure and Reality of Post-Christmas Sales The holiday season often leaves our wallets feeling lighter than usual. Australia’s festive spending reached an eye-watering $74.5 billion in 2022, marking an 8.6% increase from the previous year, according to the Australian Retailers Association. And Boxing Day? A whopping $1.23 billion was spent in just 24 hours! These figures aren’t just numbers; they paint a picture of our collective weakness for a good holiday sale. But here’s the other side of the coin: while sales can offer genuine bargains, they also come with pitfalls. The risk of accumulating more debt is a very real reality for many shoppers, especially with credit cards already stretched thin from holiday shopping. And let’s face it, impulse purchases can often lead to buyer’s remorse and an overstuffed home. The Merits of Post-Christmas Sales While the post-Christmas sales period often comes with warnings of overspending, it’s not all doom and gloom. When approached with a well-thought-out strategy, these sales can be a great opportunity to secure essential items—be it electronics, clothing, or household goods—at a fraction of their original prices. But how can one truly benefit without falling into the common traps? The key lies in being discerning. With a bit of planning and restraint, the post-Christmas sales can be both enjoyable and economically rewarding. Smart Money Moves Beyond Sales It’s easy to forget about your bigger picture goals when there are neon signs screaming discounts of 50% OFF or more! But remember, every dollar spent is a dollar less saved… or put towards those bigger picture goals. Before you fall prey to the post-Christmas sales, consider these alternatives: Save for a Rainy Day: Life is unpredictable. Having a safety net can make all the difference. Debt Reduction: Free yourself from the burden of debt, by paying down your credit cards and/or any loans you have. Invest: Think stocks, bonds, or other avenues to grow your wealth. (Hello Financial Freedom!) Financial Goals: Would you rather a new outfit? Or to be one step closer to that dream holiday, new car, or first home? Post-Christmas sales can be both a treasure trove and a minefield. The choice is yours. This festive season don’t succumb blindly to the allure of holiday sale discounts. Instead, either purchase your “need to have” items (remember, be discerning here!), or skip the sales completely and opt to put the money towards your financial goals! Here’s to spending wisely, and a financially savvy new year! The information provided in this article is general in nature only and does not constitute personal financial advice. 

How to be great with money!

15 December, 202311 January, 2024 Updated on11 January, 2024 Podcast

Join us as we explore the essential elements of effective money management, offering insights into building a secure future. From spending wisely and creating financial safety nets to making strategic investments for the long term, we’ll cover it all. Discover the joy of mastering your finances and gain a deeper understanding of the path to financial greatness. Tune in for a conversation filled with tips and guidance to make your financial journey both enjoyable and achievable! 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.

Insights from Real-Life Client Success Stories

14 December, 202314 December, 2023 Podcast

In this episode we jump into real-life client scenarios, exploring topics ranging from the tax advantages of progressive giving, to the opportunity costs linked with negative gearing. Plus essential considerations for making informed financial decisions. Tune in for valuable insights to secure your financial future. 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.

Cybersecurity: Tips to keep you cyber safe

8 December, 202313 December, 2023 Updated on13 December, 2023 Podcast

In our latest podcast, join hosts Rob and Amy as they delve into the intriguing world of cybersecurity following a captivating seminar attended by industry experts. The seminar’s presenter, who had hacked his first computer at the tender age of 12, shared a chilling yet eye-opening perspective: there are only two types of businesses – those that have been hacked and those that will be hacked. Tune in for a thought-provoking discussion on the inevitable challenges and proactive measures in the digital age. 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.

A Self-Employed Superannuation Guide

6 December, 20236 December, 2023 Superannuation, Tax

When you’re at the helm of your own business, it’s easy to get caught up in the whirlwind of the present – chasing sales, generating leads, and growing your business. Often, self-employed people prefer reinvesting back into their businesses, hesitant to stash money away in superannuation. Yet, there’s a compelling case for setting aside a slice of your earnings. The facts don’t lie At present, self-employed Australians are not required to contribute to superannuation. According to the Australian Tax Office’s (ATO) data, while self-employed people make up about 10% of the workforce, their super contributions account for just 5% of the retirement pie in 2014-15. Dive deeper into the numbers, and fewer than 1 in 10 self-employed Australians opted to make tax-deductible super contributions that same year. What is ‘self-employed’? The ATO has clear guidelines on what a self-employed person is: For more information see the ATO website. Why contribute to superannuation? While it’s tempting to pour every hard-earned dollar back into your business, the reality is that not all businesses come with a pot of gold at the end. Some self-employed people and businesses rely solely on their own labour, with no substantial business assets to lean on. That’s where superannuation can come in, providing a great way to plan for your retirement. A nest egg for retirement By contributing to super, you are building a nest egg that will provide you with financial security and income in retirement. Putting a small amount of money into superannuation regularly can provide financial stability over time, allowing you to focus on growing your business knowing that you have another income stream building in the background. Tax benefits Here’s a big one: self-employed people may be entitled to a full tax deduction for contributions made to super. If you’re self-employed, you can make personal contributions up to the annual cap, which is $27,500 per year for the 2023-24 financial year. These contributions are taxed concessionally at 15 per cent, rather than marginal tax rates. So not only are the contributions taxed at a lower rate, self-employed people can also claim a tax deduction on those contributions. To claim a deduction for personal contributions it’s important to note that: Compounding Superannuation remains one of the most tax-effective ways to grow wealth. Over time, your contributions can benefit from compounding growth, as your investments earn returns on both your initial contributions and any earnings generated. Starting early and contributing consistently, even with small amounts, can significantly boost your retirement savings. Diversification Many self-employed people see their business as their retirement strategy. But by putting money away into the tax-effective superannuation environment, with investment strategies that can be tweaked over time, you can diversify your investment, reduce risk, AND plan for retirement. How do I contribute to super if I’m self-employed? Just because you’re self-employed doesn’t mean super has to be complicated! With various tax benefits, flexibility of contribution size and frequency, and having another source of income for your retirement, if you’re self-employed why wouldn’t you be contributing to super?! If you’d like to get started, talk to your adviser today. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Borrowing to Invest

30 November, 202313 December, 2023 Updated on13 December, 2023 Podcast

Dive into the strategies of borrowing for investment in our latest episode! From margin loans to leveraging home equity, we explore the benefits and risks, emphasising smart financial decisions over tax considerations. Tune in for key insights to level up your investment game! 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.

Keeping you at home: In-home support for aging adults and their families

23 November, 202329 November, 2023 Updated on29 November, 2023 Podcast

Home Instead is a national provider of in-home care designed to enrich the lives of aging adults and their families. In this episode, join Rob and Home Instead Care Services Manager, Lindy Ellis, as they delve into the array of in-home support options. Lindy sheds light on the crucial aspects of maintaining older individuals in the comfort of their homes for both physical and mental well-being. For further details on the services provided by Home Instead, visit https://homeinstead.com.au/locations/horsham/. 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.

The challenges of being a Carer

22 November, 202310 January, 2024 Updated on10 January, 2024 Aged Care, Budgeting, Centrelink

Caring for a loved one can be deeply fulfilling but brings its fair share of challenges too – as Laura discovered. When her mother Shelly had a stroke, she didn’t require a nursing facility, but could no longer live alone. Laura was working part-time while studying a Bachelor of Dental Surgery and dreaming of one day opening her own boutique dental practice. She assumed that moving home to care for Shelly wouldn’t greatly affect her career plans, and, in fact, giving up her rental accommodation would save money. Unfortunately however, Shelly had had to quit work so the pair only had Laura’s wages to live on. Yet the bills kept coming in, and on top of everyday living costs, expenses such as medicines, transportation and modifications to the home soon added up. Additionally, helping Shelly attend medical appointments and assisting with errands put Laura behind in her studies. Since Shelly’s condition was not going to improve, Laura deferred her course; telling friends she’d return later. A great emotional weight settled on Laura’s shoulders as she automatically prioritised her mother’s day-to-day needs above her own. As expected, Shelly’s condition worsened. Medical sessions often clashed with Laura’s work commitments leaving her no option but to give up her job as well. While expecting to support her mum physically and emotionally, Laura wasn’t prepared for the financial hit. Fortunately, the Australian government offers a range of financial assistance packages, such as: Applicants must meet prescribed criteria and the amount of payment varies depending on the situation. The Government website www.servicesaustralia.gov.au contains a wealth of information for carers, including eligibility criteria, entitlement estimation calculators and information on how to claim. Shelly’s doctor provided program leaflets and additional details, and helped Laura gather the medical paperwork and other relevant documents. For Laura, giving up her job impacted more than just her finances. Having already lost friends after too many declined invitations, she now lost her last source of social interaction. Resigning herself to a life of care, Laura abandoned all thought of returning to university, along with her dreams for the future. It was around this time that Laura discovered Carer Gateway www.carergateway.gov.au and Carers Australia www.carersaustralia.com.au. These websites provided valuable carer resources, information and assistance services. While recognising that financial relief was crucial, their emphasis was on the relevance of self-care, urging carers not to underestimate the importance of their own well-being, particularly their physical and mental health. Laura found a community of people who understood her situation, and a network of support groups, counselling services and respite programs encouraging carers to balance their care-giving responsibilities with their own needs. One of Laura’s new friends suggested she seek legal advice around Powers of Attorney, and a financial adviser specialising in estate planning for both her own and Shelly’s peace of mind. These days Laura says she feels the world opening up as the silence around caregiving is broken. With her mother’s illness, her life took an unexpected turn, yet it has expanded in other ways. Laura’s future is looking brighter; she has even enrolled in an online dental assistant course. Not exactly what she’d originally planned, it’s nevertheless a pathway to her own future, and more than that, she’s daring to dream again. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Your recession survival guide

8 November, 202310 January, 2024 Updated on10 January, 2024 Economy, Education, Finance

In the ever-fluctuating world of economics, recessions are an inevitable part of the financial cycle. While they can be daunting, understanding their nature and preparing for their impact can make a significant difference in weathering the storm. Understanding Recessions At its core, a recession represents a period where economic activity contracts, often reflected in consecutive quarters of negative GDP (Gross Domestic Product) growth. This contraction is not just a statistic on a chart; it resonates through various facets of the economy. Employment opportunities might become scarcer, leading to job losses or reduced working hours. Households might witness a dip in their income levels, which in turn affects their purchasing power. Consequently, consumer spending, a significant driver of the economy, takes a hit. The onset of a recession can occur for various reasons, and often it’s a combination of several factors, rather than just one event. High inflation rates, for instance, can reduce the value of money, prompting consumers to cut back on spending. Additionally, rising consumer debt can be problematic. While borrowing can boost economic growth in the short term, too much debt can lead to payment defaults, affecting both households and the banks they borrowed from. Moreover, unexpected events, such as a global health crisis, can interrupt business operations and reduce consumer demand, leading to economic downturns. It’s the mix of these local and global factors that highlights the intricate nature of recessions and the importance of understanding them. Preparing Everyday Expenses for a Recession 1. Budgeting: The cornerstone of financial resilience is a well-planned budget. Track your monthly income and expenses, prioritise necessities, and cut back on luxuries. This will not only help you save but also give you a clear picture of where your money goes. 2. Debt Reduction: High-interest debts can cripple your finances. Focus on paying off high-interest debts first, like credit card balances. Consider consolidating your debts or negotiating with lenders for better terms. 3. Emergency Fund: An emergency fund acts as a financial cushion. Aim to save at least three to six months’ worth of living expenses. This fund can be a lifesaver if you face job loss or unexpected expenses during a recession. Fortifying Your Savings for a Recession 1. Automatic Savings: Set up an automatic transfer to your savings account each month. This ensures you’re consistently saving, making it less tempting to spend that money elsewhere. 2. Diversify Your Savings: Don’t put all your eggs in one basket. Consider diversifying your savings across different accounts or financial institutions. This can protect your money from bank failures or other unforeseen events. 3. Liquidity is Key: In uncertain times, having access to your savings can be crucial. While long-term deposits or high-yield accounts might offer better interest rates, ensure a portion of your savings is in easily accessible accounts, like a regular savings account or a money market account. This ensures you can quickly access funds without penalties or waiting periods should the need arise. Navigating Investments During a Recession 1. Review Your Strategy: Recessions are not the time for hasty decisions. Re-evaluate your investment strategy in light of the current economic climate. Ensure your portfolio aligns with your long-term financial goals. 2. Seek Professional Advice: If you’re unsure about your investments, consult a financial adviser. They can provide insights tailored to your situation and help you make informed decisions. 3. Avoid Impulsive Moves: It’s natural to feel anxious during economic downturns. However, making impulsive investment decisions based on fear can lead to significant losses. Stay informed, be patient, and remember that recessions are temporary. Recessions, while challenging, are a natural part of the economic cycle. By understanding their nature and preparing in advance, you can not only survive, but thrive, during these times. Remember, the key is to be proactive, stay informed, and make well-considered financial decisions. With the right strategies in place, you can navigate any economic storm with confidence! The information provided in this article is general in nature only and does not constitute personal financial advice. 

Investing: Strategies for age 55+ investors

24 October, 202325 June, 2024 Updated on25 June, 2024 Podcast

In the second episode of our 55+ series, we dive into the world of investing tailored specifically for those aged 55 and above. Whether you’re nearing retirement, already enjoying your golden years, or seeking to maximise your investments during this life stage, listen in for strategies to optimise your investment portfolio, manage risk and ensure your financial well-being during this exciting chapter of life. 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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