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Four ways to tell the designer fashion items worth investing in from the ones that aren’t

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/naomi-braithwaite-156824">Naomi Braithwaite</a>, <a href="https://theconversation.com/institutions/nottingham-trent-university-1338">Nottingham Trent University</a> Whether it’s aspiring to the “quiet luxury” or <a href="https://theconversation.com/new-clean-girl-and-old-money-aesthetics-on-tiktok-make-the-same-old-link-between-hygiene-and-class-208566">“old money” looks</a> taking over TikTok, or cringing at the “<a href="https://theconversation.com/far-from-the-ludicrously-capacious-what-the-fashion-of-succession-tells-us-about-the-show-and-about-society-202744">ludicrously capacious bag</a>” scene in the last season of Succession, designer clothes and accessories have been a hot topic in 2023. But with continued sales growth in <a href="https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion">designer fashion</a>, and concerns about shopping more <a href="https://fashionunited.uk/news/retail/consumers-want-to-shop-sustainably-what-are-the-opportunities-for-brands/2022102465829">sustainably</a>, it’s worth considering investing your money in products that will last longer. Sales in luxury fashion have increased significantly since the pandemic. <a href="https://www.just-style.com/features/covid-two-years-on-expert-analysis-of-top-10-global-apparel-companies/?cf-view">Louis Vuitton</a>, for example, has increased its sales from 2019. And British luxury brand, Burberry, reported sales growth to be <a href="https://www.theguardian.com/business/2021/jul/16/burberry-sales-return-to-pre-pandemic-levels-as-younger-shoppers-splash-out">86% higher</a> in the year following the pandemic (though there has been <a href="https://news.sky.com/story/burberry-shares-take-10-hit-on-warning-of-slump-in-luxury-demand-13009401">another dip in sales</a> more recently). The <a href="https://www.limitlessmanufacturinggroup.com/blog/the-rise-of-athleisure-how-activewear-became-mainstream-fashion">rise of athleisure</a> in fashion and designer collaborations such as <a href="https://www.manoloblahnik.com/gb/the-latest/post/manolo-blahnik-for-birkenstock">Manolo Blahnik for Birkenstock</a>, <a href="https://www.gucci.com/uk/en_gb/st/capsule/adidas-gucci">Gucci x Adidas</a> and <a href="https://uk.burberry.com/c/collaborations-supreme-burberry/">Burberry x Supreme</a> have made luxury more available. But prices are still high, so how can you know whether a purchase will stand the test of time and become an investment piece or a fashion flop? Here are four key factors to consider when making a designer purchase. <h2>1. Resale value</h2> An expensive purchase price may not guarantee that your product will hold its value. A key factor to consider is what the resale value of your purchase will be, as this will indicate the item’s investment potential. A fashion investment piece tends to be a luxury product with a higher price ticket. Prices of luxury fashion have increased over the last decade. Chanel bags, for example, have <a href="https://www.forbes.com/sites/walterloeb/2022/02/21/luxury-brand-prices-rise-sharply--will-it-cut-demand/">almost doubled</a> in price. Chanel’s iconic medium flap bag has increased from <a href="https://luxecollectivefashion.com/blogs/communique/your-expert-guide-to-the-chanel-price-increases-2023">£7,550 in 2022 to £8,530 in 2023</a> and is considered to be one of the most covetable designs in the <a href="https://www.whowhatwear.co.uk/best-luxury-handbags-resale-value/slide2">resale market</a>. Similarly, Hermès’ famous Birkin and Kelly bag designs, renowned for their quality, are <a href="https://www.sothebys.com/en/articles/hermes-bag-review-2022-birkin-bag-and-hermes-kelly-bag-remain-most-popular">undoubtedly investment pieces</a>. Despite the high price ticket, <a href="https://www.whowhatwear.co.uk/birkin-bag-prices/slide2">Birkin bags are in demand</a>. They are the most collectable and classic of designer bags, with an average retail price of USD$10,000 (£8,237), <a href="https://www.scmp.com/lifestyle/fashion-beauty/article/3211640/why-hermes-birkin-bag-such-good-investment-according-experts-other-luxury-handbags-might-not-be">which can double in the resale market</a>. Luxury fashion <a href="https://www.pursebop.com/new-app-calculates-the-resale-value-of-designer-handbags/">resaler Vestiaire</a>, along with online marketplaces like eBay, are useful sources for researching and calculating what the value of your purchase will be in the resale market. While designer bags can hold their value post-purchase, <a href="https://www.yourmoney.com/investing/can-clothing-ever-be-considered-an-investment/">clothes can be less straightforward</a> and will depend on the other following factors. <h2>2. Quality and style</h2> A <a href="https://www.voguebusiness.com/fashion/marketing-at-scale-explaining-luxurys-new-brand-identifiers">2023 report</a> has stated that the overt use of logos in recent years, from brands such as <a href="https://www.surefront.com/blog/is-logomania-really-over">Balenciaga and Louis Vuitton</a>, has been replaced by an interest in quiet luxury. Quiet luxury means <a href="https://www.businessinsider.com/quiet-luxury-explained-which-brands-will-benefit-2023-4?r=US&IR=T">more simplistic, classic and timeless styling</a>. The focus on exquisite fabrics and design gives a sense of fashion that is not disposable and durable. A cashmere sweater from <a href="https://uk.loropiana.com/en/c/woman/knitwear">Lorna Piana</a> may cost over £1,700 but its quality and classic styling will ensure it’s an investment piece that transcends fashion trend cycle. Consideration of fabrics, styling and design aesthetic are all key in ensuring your fashion investment has longevity. <h2>3. Brand authenticity</h2> <a href="https://www.researchgate.net/publication/303917660_The_Role_of_Heritage_and_Authenticity_in_the_Value_Creation_of_Fashion_Brand">Heritage and authenticity</a> can secure the value of fashion purchases. Brands that have a strong heritage – that have been around and respected for a long time – are better investment pieces, <a href="https://wwd.com/fashion-news/designer-luxury/luxury-fashion-heritage-chanel-dior1234792018-1234792018/">particularly in the categories of watches, jewellery and handbags</a>. Rolex watches are renowned as investment pieces, with models that are most rare commanding the higher appreciation values. In the realm of clothing, Burberry’s iconic trench coat – which has remained largely untouched in design terms for over 100 years – has been reported to be a good wardrobe investment by <a href="https://www.vogue.co.uk/fashion/article/burberry-trench-coats">Vogue</a>. The trench’s timeless design, alongside its long history, has secured its place as an investment product. However, when it comes to making the purchase it is important to go with <a href="https://www.gentlemansgazette.com/burberry-trench-coat/">Burberry’s original design</a>, rather than the fashion-led versions whose value may diminish as seasonal trends move on. <h2>4. Product endorsement</h2> Celebrity endorsement is a popular brand strategy for increasing the value of fashion products. While it may drive sales, it is important to consider what effect it will have on investment quality. A recent example was when the British pop star <a href="https://www.imdb.com/name/nm4089170/">Harry Styles</a> wore the <a href="https://harpersbazaar.com.au/adidas-gucci-collaboration-collection/">luxe Adidas x Gucci Gazelle trainers</a>, during his 2023 tour, resulting in a <a href="https://www.sneakerfreaker.com/news/harry-styles-gucci-adidas-gazelle-samba-statistics?page=0">reported 100%</a> increase in sales of the trainer. While sneakers have previously had a bouyant <a href="https://www.fashionbeans.com/article/sneaker-reselling-guide/">resale market</a>, that is now <a href="https://www.voguebusiness.com/fashion/has-the-sneaker-bubble-finally-burst">declining</a>, raising questions as to whether they will continue to be positive investment pieces. Celebrities may create hype – but their endorsement does not always ensure the longevity of a product’s value. In 1999, <a href="https://hypebae.com/2018/10/dior-saddle-bag-history-john-galliano">Dior’s saddle bag</a> was featured on US TV series <a href="https://www.hbo.com/sex-and-the-city">Sex and the City</a>, securing its place as an <a href="https://garage.vice.com/en_us/article/mbxjmn/dior-saddle-bag-sex-in-the-city">iconic designer bag</a>. While this increased its value and desirability at the time, the bag eventually faded from view, until 2018, when Maria Grazia Chiuri, Dior’s current design director, relaunched it. This resulted in a frenzy of interest <a href="https://www.harpersbazaar.com/uk/fashion/a42118540/dior-saddle-bag/">in the original Galliano designs</a>. Endorsement creates hype and desirability, but occasionally it can also create a classic too. But this takes time, and it’s best to consider other factors including brand authenticity, quality and style when planning an investment purchase. Also, value does not always have to have a price attributed to it. In the world of designer fashion, it is important not to overlook the significance of the <a href="https://www.theguardian.com/fashion/2023/oct/13/fashion-thats-begging-for-love-designers-want-to-create-meaningful-stuff">emotional durability</a> of our purchases and how that can ensure an enduring value and longevity. <a href="https://theconversation.com/profiles/naomi-braithwaite-156824">Naomi Braithwaite</a>, Associate Professor in Fashion Marketing and Branding, <a href="https://theconversation.com/institutions/nottingham-trent-university-1338">Nottingham Trent University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/four-ways-to-tell-the-designer-fashion-items-worth-investing-in-from-the-ones-that-arent-215831">original article</a>. </div>

Beauty & Style

Thinking of dabbling in investing? Expert’s 7 things to consider before investing a cent

Investing can be seen as both an art and a science, requiring a blend of patience, knowledge and strategy. It’s also crucial to understand the trade-off between risk and return, coupled with your time horizon. This means you do not invest in a vacuum, and each part of the investing world will impact another. Get your financial situation strong before you commit money to investing. This could be clearing consumer debt (credit cards, personal loans, buy-now-pay-later), funding your emergency fund or even setting up a spending plan so you know exactly how much you have free to invest. What else do you need to consider? <ol> <li>Your ‘why’</li> </ol> What is money to you? What do you believe about money? Why are you investing to start with? These questions must have an answer before you commit money to your investing account. If you’re unsure and want to build wealth with money you don’t need now, that’s also okay, but you need to have some conscious thought about your ‘why’ and your goals, as this is the basis of any strategy that you develop. <ol start="2"> <li>Your mindset</li> </ol> Do you have your own personal conviction about your investing, money and even life? Your mindset around investing and money needs to be rock solid, so when you hear someone tell you to do something because they do it, you don’t change a thing because your situation is set up correctly for you! This also helps if you’re part of online forums, listening to podcasts or reading investing books. Your mindset needs to be so firm that you can pick hype vs substance when it comes to investing and other opportunities. Just because everyone is doing it, does not mean it’s a good thing for you to do. <ol start="3"> <li>Setting your strategy</li> </ol> An effective investment strategy is personalised and aligned with your financial goals, risk tolerance and investment horizon. Whether you’re saving for retirement, a child’s education or building wealth, your strategy should dictate how you allocate your assets across different investment vehicles. It may be considered essential to have a balanced mix of shares (or ETFs), bonds (or fixed interest) and other assets to mitigate risk. Regularly reviewing and adjusting your portfolio to stay aligned with your goals is also a crucial part of your strategy. Your strategy will help you stay the course if things get rough out there and your emotions are tempted to take over! This goes hand-in-hand with having a sound mindset. <ol start="4"> <li>Ownership structure</li> </ol> Understanding the best ownership structure for your wealth building and investments can have significant implications for taxes, estate planning and asset protection. Options include individual or joint accounts, superannuation, investment bonds, trusts and companies. Each has its advantages and considerations, particularly concerning tax efficiency and control over the assets. Before you pull the trigger with significant wealth (for example, if you were to receive an inheritance), seek professional advice around the ownership of your investment vehicle. This will help you determine the most advantageous structure for your situation. <ol start="5"> <li>Broad-based index funds</li> </ol> Broad-based index funds are foundational to a well-rounded investment portfolio. These funds track the performance of a specific index, such as the ASX 200, S&P 500 or thematic indexes and provide investors with diversified exposure to a wide array of companies. The beauty of index funds lies in their simplicity and effectiveness. They offer a low-cost way to invest in the stock market, reducing the risk associated with picking individual companies. Over the long term, index funds have historically provided solid returns, making them an excellent choice for both novice and experienced investors. <ol start="6"> <li>Valuing and investing in individual companies</li> </ol> For those inclined to take a more hands-on approach with their investing or just to keep the interest alive, valuing single companies is a critical skill. This involves analysing a company's financial health, market position and growth prospects. Key metrics such as the price-to-earnings (P/E) ratio, earnings growth and dividend yield can provide valuable insights. However, it’s important to remember that ‘stock picking’ requires research, a deep understanding of market cycles and a higher tolerance for risk. Your goal may be to identify undervalued companies that have the potential for significant growth. A note to remember is to have your own guardrails in your life and make it part of your investment constitution that you will not have more than, say, 10 per cent of your portfolio allocated to individual companies. <ol start="7"> <li>Advanced concepts, trading and speculation</li> </ol> The key with advanced concepts, alternative/speculative asset classes, day trading and options trading is again to have solid guardrails in place. Be engaged and dialled in to your investing; however, you need to understand that the best thing you can do for your future wealth is buy and hold good, broad-based indexes for the long term. We love doing advanced strategies and some wild stuff, but we have strong guardrails because these strategies may flush you if you’re not careful, and you don’t want your whole portfolio allocated to such endeavours! Edited extract from The quick start guide to investing: Learn how to invest simpler, smarter & sooner by Glen James & Nick Bradley (Wiley $32.95), available at all leading retailers. Disclaimer: Any information here is general in nature and has been prepared without considering your personal goals, financial situation, or needs. Because of this, before acting on the general advice, you should consider its appropriateness, having regard to your unique situation. You should obtain and review the Product Disclosure Statement (PDS) and Target Market Determination (TMD) relevant to the product before making any financial product decisions. It's also strongly encouraged to seek the advice of a professional financial adviser. Image credits: Shutterstock

Money & Banking

7 health investments that are tax deductible

When someone says “investment”, we tend to think of money and wealth creation: property, shares, superannuation, savings accounts and so on. However, an investment is the contribution of something you value towards the anticipation of growing that value. That contribution could be money or it could be in the form of time, skills, knowledge, or labour. Similarly, the anticipated growth in value could be in monetary terms or towards growth in business, education, research, or even health – both your own and others’. Just like money matters and tax affairs require a wholistic view, so too does health. Which is why when it comes to getting the most out of health investments, it’s crucial to consider physical, mental and financial health. Many, such as those listed below, happen to be tax deductible too: <ol> <li>Safety equipment and education</li> </ol> Workplace safety is perhaps the most crucial of all health investments. What form that takes can differ enormously between professions. Yet if it is important for doing your job safely, then generally it will be tax deductible. This may be protective clothing for tradespeople, medical workers, and industrial machinists, or advanced driving/road safety training courses for taxi drivers and couriers. Sun protection for jobs that take place largely or exclusively outdoors is also generally deductible – but use those sunglasses or sunscreen at home as well, and you’ll only be able to claim the work-related portion of the cost. <ol start="2"> <li>Insurances</li> </ol> Certain insurance premiums are typically tax deductible. Professional indemnity insurance is a legitimate (and often essential) business expense in many jobs, such as for doctors and journalists. Income protection insurance against severe illness or injury may also be deductible. Plus, having private health insurance also delivers a tax benefit when lodging your tax return. <ol start="3"> <li>Professional coaching</li> </ol> Professional coaching can be useful for mental health and clarity, both over existing work situations and career progression or transition planning. Provided this coaching is strictly professional and relates to your ability to earn an income, it may be tax deductible. <ol start="4"> <li>Accounting and financial advice </li> </ol> Good financial health goes hand in hand with good advice about money matters. Most Aussies know that the cost of managing their tax affairs is deductible. Less well known, though, is that financial advice expenses are also generally deductible. Busy accountants can forget to ask if you incurred these costs when going through your expenses at tax time, so be sure to flag it with them. <ol start="5"> <li>Industry-specific deductions</li> </ol> In some instances, health-related expenses may be tax deductible because they are required within a particular job. For instance, models, athletes and fitness instructors may be able to claim gym memberships and nutritionist visits; dieticians and chefs may be able to claim healthy eating books and subscriptions. Check the <a href="https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/occupation-and-industry-specific-guides">ATO’s Occupation and industry-specific guides</a> to see relevant deductions in your line of work. <ol start="6"> <li>Medical checks</li> </ol> If you require compulsory medical assessments and check-ups as part of your job, these may be tax deductible. Examples include health screenings for pilots, miners, and emergency workers. COVID-19 tests to determine whether you can attend your workplace may also be deductible. Vaccinations, however, are deemed by the ATO to be private expenses. <ol start="7"> <li>Donations</li> </ol> Many health organisations are registered charities and not-for-profits, making donations to them deductible. Often, people donate to health charities because of personal experience, either as a patient/survivor themselves or having known someone who was. So not only are you investing in critical research and future patient support as a means of giving back, but you can also claim a tax deduction as a reward for donations over $2. Proof of purchase is key For any expense to be tax deductible, it must be necessary for work purposes and have come out of your own pocket, not been paid for or reimbursed by your employer. Don’t forget to claim depreciation of work-related equipment over subsequent years. These are extra dollars in your pocket to offset the cost of their eventual replacement. And be sure to keep copies of receipts for your purchases to prove your expenses – both now and in the future. Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Money & Banking

Couple's retirement plans "ruined" after investment fail

A couple from Brisbane claim their retirement has been "ruined" after an investment went wrong. After first visiting Coffs Harbour in 1976, Raymond and Wendy Dibb saw potential in the area, land-banking 2.7 hectares of rural acreage in the late 1980s. The couple bought the land in Korora for $118,000 in 1988 and sat on it for decades, waiting for the day they could make their retirement fortune by subdividing and selling it off. However they never got the chance, as the land was compulsorily acquired by Transport for NSW back in 2021 in order to make way for the Pacific Highway bypass. The $2.2 billion highway is now currently being built over the top of the block, which will be the site of a major intersection when the project opens to traffic in late 2026. The couple believed the land was worth a hefty $5.5 million, although Transport NSW valued it at just $1.062 million back in 2021. A gruelling three-year legal battle finally ended in the NSW Court of Appeal on June 28th, with the Dibbs being awarded $1.359 million in compensation, although they argued they deserved more. “This was a pretty significant financial transaction that’s really gone bad for us,” Raymond Dibb told the <a title="www.smh.com.au" href="https://www.smh.com.au/national/nsw/couple-loses-property-fight-after-highway-swallows-5-5-million-dream-20240703-p5jqrx.html" target="_blank" rel="noopener">Sydney Morning Herald. </a>“And it’s got nothing to do with our investment choices." “We’re talking about landowners just minding their own business, and someone comes knocking on your door, saying, ‘We’re going to take your land’”. Mr Dibb slammed the entire process of the acquisition, saying that he believed an independent body should conduct compulsory acquisitions rather than the government. In the Land and Environment Court, Justice Nicola Pain ended up increasing the couple’s compensation to $1.42 million after it was determined the land could have produced seven residential lots with less risk and cost. She found they were also entitled to money to cover fees and stamp duty on a replacement block for their land bank, which the couple argued they would need to buy to delay paying capital gains tax. Transport for NSW argued that they should not have been granted any money for stamp duty, with Justices Kristina Stern, Anthony Payne and Jeremy Kirk agreeing. This was stripped from the award and they refused to revalue the block of land. The couple were also ordered to pay the government’s costs of the two-day appeal. Mr Dibb is considering seeking leave to appeal against the High Court’s decision. He added that the couple’s retirement plans had been ruined by Transport for NSW, which originally offered just $470,000 for the land back in 2019. A spokesperson for Transport for NSW said the government body “empathises with residents and landowners affected by property acquisitions” and said they always “try to minimise the need for property acquisition”. Image credits: Shutterstock

Money & Banking

Is Valentine’s Day worth the romantic investment? Here’s what we can learn from economics

<a href="https://theconversation.com/profiles/selma-wather-1510222">Selma Wather</a>, <a href="https://theconversation.com/institutions/university-of-sussex-1218">University of Sussex</a> Expressing affection can be expensive. Spending on heart-shaped gifts, romantic cards, chocolates and flowers (other gifts are available) to celebrate Valentine’s Day has reached <a href="https://www.statista.com/statistics/510981/valentines-day-total-spending-great-britain/#:%7E:text=In%20the%20United%20Kingdom%20%28UK%29%20alone%2C%20Valentine%E2%80%99s%20Day,increased%20by%20just%20over%20300%20million%20British%20pounds.">close to £1 billion</a> in the UK. So the value of Valentine’s to retailers seems clear enough. But just how valuable is the annual ritual to consumers? What return can you expect for the money you invest in that bouquet of roses or candle lit meal? Broadly speaking, and depending on your relationship status, buying into Valentine’s Day traditions suggests two possible scenarios. You might be sending a card or gift to a potential partner to inform them of your interest; or you might be giving something to your current partner to remind them of your continuing love. Research suggests that both options have intrinsic economic value. For those seeking to express interest, sending a card is like dipping your toe into what economists might refer to as the “marriage market” – the search for someone you like, who likes what you have to offer in return. This search can happen smoothly, with plenty of information about your potential match, or it can be paved with obstacles, where you may not know much about who is available, and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1703310">learning about potential partners</a> takes time. So suppose you are searching for a partner, and comprehensive information about potential matches is not freely available. What do you do? One option might be to put all your hopes into meeting someone on your daily journey to work. You pray that one day, just like in the movies, you will simply bump into “the one”. A second option might be to focus your search on single work colleagues, or people you know socially, and send Valentine’s Day cards to those you are attracted to. The option with the highest chance of success is the second one. You are using reliable information – knowledge of who is single. And sending a card to them can provide them with important information about you – that you’re also single, and that you’re interested. This is why research suggests that sending a Valentine’s Day card can be a <a href="https://www.jstor.org/stable/2938374?origin=crossref">logical investment</a> of time and money. <h2>‘Match quality’</h2> Fast forward five years or so and imagine you are happily married to the recipient of one of those cards. Is it worth repeating the gesture now that you’re settled down together? Economists think of marriages or partnerships as having an inherent “<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-2354.2006.00385.x">match quality</a>”, which reflects how good (or bad) your relationship is – and the likelihood of you breaking up. If match quality falls below the level of happiness you might expect to have if you were to leave, a <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2759255">separation may well follow</a>. But many studies also show that <a href="https://www.jstor.org/stable/2535409">match quality is malleable</a> – that it can change, for better and indeed for worse, over time. You can invest in trying to improve match quality in various ways. It might be starting a family, sharing hobbies and interests, or gestures such as cooking a special meal or exchanging gifts on the 14th day of February. Improving your match quality <a href="https://www.researchgate.net/publication/228431914_How_Does_the_Change_of_Marriage_Quality_Affect_Divorce_Decisions">directly reduces the probability</a> of a separation. Then there’s the question of commitment – the willingness to stay in a relationship rather than walking away. And again, gestures can make a difference. Imagine you have just started a new job, and your employer asks you to complete an intensive training session in your free time, for a skill that would only be useful for that particular role. If you expect to hold the job for a long period, you might happily invest your time. But if your employer is struggling financially and redundancy is on the cards, you are much less likely to agree to perform the task. Relationships work in a similar way. People are more prepared to invest in things like having children or buying a house together if they expect the relationship to last. Given that commitment is not guaranteed by a marriage certificate, people <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=950688">need to find other ways</a> to signal their continued devotion. Celebrating Valentine’s Day is one way of making such a signal. It can show faith in your shared commitment, signify that you wish to continue investing in the relationship and improve match quality, further stabilising the partnership. So even if deep down you think that Valentine’s Day has become over commercialised and meaningless, research suggests it makes good economic sense to send that card.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223128/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/selma-wather-1510222">Selma Wather</a>, Senior Lecturer in Economics, <a href="https://theconversation.com/institutions/university-of-sussex-1218">University of Sussex</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-valentines-day-worth-the-romantic-investment-heres-what-we-can-learn-from-economics-223128">original article</a>.

Money & Banking

Should I invest in a unit or a house?

The first tenet of investment is to get the best possible returns, so let’s look at where the money comes and goes when you’re investing in residential real estate. Initial cost Units are typically more affordable than houses, so it’s easier for a first-time investor to raise the necessary capital. Houses often have a higher entry pricepoint due to land value. According to the latest Domain Group House Prices Report, the national median house price is $636,315 while units are $476,023. With the surge in Sydney prices, the median price of units in Sydney is now higher than the current median house price in Brisbane, Adelaide, Hobart and Canberra. Ongoing expenses Council rates are usually higher on a house and you’ll be required to pay land taxes on an ongoing basis. With a unit or apartment, you will have to account for strata fees quarterly for the life of the investment, including any special levies that may be raised. Maintenance If you own a house, all maintenance issues are your responsibility (unless you have a property manager), whereas the maintenance and care of an apartment building and surrounds is the responsibility of the body corporate. What do you want from your investment? What sort of investor are you? Are you looking for regular long-term income, or do you plan to renovate and ‘flip’ the property as soon as you can? A house generally offers higher capital growth, due to the land component of the property. There’s also more potential for negative gearing. Units, on the other hand, tend to offer higher rental yields so they are more favourable from a cashflow perspective. Their lower pricepoint may allow you to build a diversified property portfolio more quickly. Older units in smaller blocks might offer better value than swanky new apartments in skyscrapers. You’re less likely to pay ongoing levies for amenities such as gyms, concierges and heated swimming pools; your voice will be louder in owners’ corporation meetings. It’s also easier to find new tenants if there aren’t 20 other vacant properties in the same location. Rentability Both houses and units are in demand right now. To optimise your investment, look for places where rental demand is high, such as around universities, transport or lifestyle areas with easy access to schools, parks, cafes, shops or beaches. Ultimately, there are reasons for and against almost any dwelling type. The right investment choice for you will depend on your financial position, risk profile and investment strategy. First appeared on <a href="https://www.domain.com.au/advice/unit-or-house-the-better-first-investment/" target="_blank" rel="noopener">Domain.com.au</a>. Republished with permission. Image: Getty Images

Real Estate

Top 5 tips to be financially healthy, wealthy and wise

Financial health, wealth and wisdom aren’t exclusive to the billionaires of the world – every Aussie can use these tips to live happier and more secure lives. The old saying goes ‘Early to bed and early to rise, makes a man healthy, wealthy, and wise.’ I believe this refers to more than just sleeping habits and speaks to the importance of a good routine and planning ahead. ith that in mind, here are some tips to ensure you and your bank balance remain on good terms: 1. Build strong foundations There are five financial foundations I recommend which form the building blocks for a strong relationship with money: <ul> <li>Emergency fund</li> <li>Spending and investment plan (more in-depth than a budget)</li> <li>Superannuation</li> <li>Adequate insurance cover</li> <li>Estate planning</li> </ul> Having these foundations in place allows you to build wealth to enjoy a good lifestyle, protect you and your family against any unexpected disaster or loss of income, and plan for a comfortable retirement. The earlier you put them in place, the more time you have for them to work in your favour (think back to your schooldays about the benefits of compound interest!) 2. Take charge – it’s YOUR money Do you know your current superannuation balance? The interest rate on your mortgage? How much you spent last month? Many people don’t – often because they leave the finances up to their significant other. It’s a risky move. What if your partner invests unwisely? Develops a gambling addiction? You split up? Sadly, many people have faced financial ruin simply because they wrongly believed their partner had everything hunky-dory. It’s important to be actively involved in your finances – know where your money comes from and where it goes. Don’t just leave it up to someone else, no matter how much you may love them. 3. Avoid runaway debt Unpaid bills, late tax returns, missed Afterpay instalments and credit card repayments – they all accrue interest and can quickly snowball until you’re buried under an avalanche of debt. Find ways of managing repayments that work for you. That could be: <ul> <li>Setting reminders in your phone and/or on your fridge to pay bills by their due date. </li> <li>Using a mortgage offset account to reduce your payable interest.</li> <li>Paying with cash/debit rather than credit/buy-now-pay-later (convenience typically costs more than transparency).</li> </ul> If you’re struggling, tackle your most expensive debts first (those with the highest interest rates). You may also be better off consolidating your debts into one, such as your mortgage – to pay less interest overall and to cut the number of repayments to keep track. 4. Don’t ‘set and forget’ Your income, expenses, debts and taxes all change as your life and circumstances change, meaning they should be reviewed regularly. Update your spending and investment plan whenever you change jobs, move house, expand your family, get a payrise etc. Scrutinise your expenses to cut wasteful spending – like that gym membership or TV subscription you no longer use. Examine ways to reduce your taxable income throughout the year, such as extra contributions to your super and keeping records for allowable deductions. Beware the ‘loyalty tax’ – banks, utilities and insurers typically offer better deals for new customers than existing ones. If you don’t review those at least once a year, or simply pay the renewal without comparing, you’re probably paying more than you need to. (If you do switch providers, double check that you are getting a like-for-like service – read the fine print carefully.) 5. Look after yourself ‘What does self-care have to do with money – apart from costing lots?’ I hear you ask. My response is – who can really afford to be sick given how fast healthcare costs keep rising! Not to mention lost earnings and other impacts. Looking after yourself – physically and mentally – means you’re less likely to need to pay for medical care, treatments and medications. Plus, you’ll need less sick or unpaid leave from work. And you’ll reduce your chances of a debilitating condition which could cut short your ability to earn a living, such as a stroke or heart attack. Then there’s the benefits of better cognitive function – making smarter decisions about money and better productivity at work (increasing your prospects for promotions and higher incomes). Invest in self-development too. Learning new skills and gaining extra qualifications aren’t just good for mental health but help you earn a higher income. Hence looking after yourself means lower costs AND higher income. What’s not to love about that?! Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Image: Getty Images

Money & Banking

How do I find out what my superannuation fund invests in? A finance expert explains

You want your superannuation savings to be invested in things that also serve the planet’s long-term interests. But how can you be sure your fund’s values align with yours – or even its own claims? This question has become increasingly pertinent as demand for environmentally and socially sustainable investments <a href="https://asic.gov.au/about-asic/news-centre/find-a-media-release/2022-releases/22-141mr-how-to-avoid-greenwashing-for-superannuation-and-managed-funds/">grows</a> – and with it incentives for financial institutions to put the best spin on their offerings. One consultancy specialising in “responsible investment” reckons <a href="https://thenewdaily.com.au/finance/superannuation/2021/08/16/greenwashing-super-funds/">10% of the funds</a> it has examined do not have the sustainability orientation they claim. Among those <a href="https://www.edo.org.au/2022/08/10/hestas-fossil-fuel-investments-may-amount-to-a-breach-of-the-law/">accused of greenwashing</a> in recent months is one of Australia’s biggest super funds, HESTA (the industry fund for health and community service workers), which has promoting its “clean energy” credentials while still holding shares in fossil-fuel companies <a href="https://www.ai-cio.com/news/australias-hesta-accused-of-greenwashing/">Woodside and Santos</a>. So how can you check what your superannuation fund invests in? Super funds are legally obliged to disclose how they invest your money in two different disclosure documents – a Product Disclosure Statement and a Portfolio Holdings Disclosure. Both will be available on a super fund’s website, though how easily you can find them will vary. The rest of this article is going to explain what information these documents provide, how useful this information is likely to be, and your best bet to ensure your super fund reflects your values. <h2>The Product Disclosure Statement</h2> Product disclosure statements are required by the financial regulator (the Australian Securities and Investments Commission) for all financial products. This document outlines the most basic but important information of an investment product’s features, benefits, risks and costs, including fees and taxes. The format is standardised, with one section (Section 5) covering with “How we invest your money”. The information it contains is broad. At best you’ll learn how the fund splits its investments between safe and riskier assets, and between different asset classes – Australian shares, international shares, property trusts, infrastructure trust, cash and so on. <h2>Portfolio Holding Disclosure</h2> For a comprehensive look at where your money is invested in, you can consider the Portfolio Holdings Disclosure. This document lists a fund’s complete holdings – including the percentage and value of every single company stock held. Portfolio holdings disclosures are relatively new, being obligatory only since March 2022 under <a href="https://www.legislation.gov.au/Details/F2021L01531">legislation</a> meant to improve transparency in the sector. However, super funds aren’t obliged to provide this information in a consistent, easily understandable way. For a non-expert who doesn’t know what to look for, the level of detail can be mind-boggling. You may find yourself scrutinising a spreadsheet listing thousands of items. The Australian Retirement Trust’s Portfolio Holdings Disclosure for its “Lifecycle Balanced Pool”, for example, has more than <a href="https://www.australianretirementtrust.com.au/investments/what-we-invest-in/superannuation-investments">8,000</a> line items. Some super funds have made the effort to provide this information in a more user-friendly format. An example is Future Super, which allows you to <a href="https://www.futuresuper.com.au/everything-we-invest-in/?utm_source=google&utm_medium=cpc&utm_campaign=1757241588&utm_content=68234193065&utm_term=future%20super&campaigntype=SearchNetwork-1757241588&device=c&campaignid=1757241588&adgroup=68234193065&keyword=future%20super&matchtype=p&placement=&adposition=&location=9069039&gclid=CjwKCAjwmJeYBhAwEiwAXlg0AYOEe2tJViZiZBgUk3bt1h9LNuHx1jWnGy6VzqGaNjBzOEi60852JRoCel8QAvD_BwE">search and filter</a> portfolio holdings by asset class and country of origin. But if your concern is to avoid investing in some specific activity such as in mining fossil fuels or gambling, you’ll need to know the companies and other assets you want to avoid for this to be helpful. <h2>Your best options</h2> This is not to say portfolio holding disclosure obligations are useless. They are incredibly useful – a huge leap forward in the sector’s accountability. They just aren’t designed for consumers. So there is still much work to be done to make the sector truly transparent. What would really help is independent certification and ratings of super products, similar to government websites and programs that certify energy efficiency and allow comparison of electricity plans. In the meantime, I can offer you one big tip. Choose a specific superannuation product that markets itself on its environmental or social sustainability credentials. Most super funds now provide these choices alongside their more traditional investment options. There is a variety of “screening” approaches to ethical investments. Some exclude entire sectors. Others include the best environmental and social performers even among “sinful” industries such as tobacco or weapons. So just because a super product is marketed as “ethical” or “sustainable” doesn’t guarantee you will agree with all its investments. But there is a much higher likelihood of it living up to its claims due to greater scrutiny by third parties such as environmental groups as well as the financial regulator. The Australian Securities and Investments Commission put super funds on notice earlier this year with a “<a href="https://asic.gov.au/regulatory-resources/financial-services/how-to-avoid-greenwashing-when-offering-or-promoting-sustainability-related-products/">guidance note</a>” about the growing risk of greenwashing in sustainability-related financial products. It reminded funds that “making statements (or disseminating information) that are false or misleading, or engaging in dishonest, misleading or deceptive conduct in relation to a financial product or financial service” is against the law. So super funds know their portfolios are being scrutinised. Switching your investment option or fund is simpler than you think. You only need to fill out and lodge a form. Just be sure to compare fees and performance, and seek a second opinion from trustworthy adviser before “voting with your wallet”. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/how-do-i-find-out-what-my-superannuation-fund-invests-in-a-finance-expert-explains-188802" target="_blank" rel="noopener">The Conversation</a>.

Retirement Income

Yet again, the census shows women are doing more housework. Now is the time to invest in interventions

The Australian Census numbers have been released, showing women typically do <a href="https://www.abs.gov.au/census/find-census-data/community-profiles/2021/AUS/download/GCP_AUS.xlsx">many more hours of unpaid housework</a> per week compared to men. It’s not a new development. In <a href="https://www.abs.gov.au/websitedbs/D3310114.nsf/home/2016+Census+National">2016</a>, the “typical” Australian man spent less than five hours a week on domestic work, while the “typical” Australian woman spent between five and 14 hours a week on domestic work. Before that, the <a href="https://www.abs.gov.au/ausstats/abs@.nsf/7d12b0f6763c78caca257061001cc588/c0e6e1069c8d24e9ca257306000d5b04!OpenDocument">2006 census</a>showed, again, that more of the domestic workload is shouldered by women. So, in the 15 years since the Australian Census <a href="https://www.theage.com.au/national/census-to-count-unpaid-work-20060226-ge1ty0.html">started collecting</a> unpaid housework time, women are shown to do more than men. Every. Single. Time. What is unique about these latest census numbers is Australians filled out their surveys during one of the greatest disruptors to work and home life – the COVID pandemic. <h2>Pandemic pressures</h2> We have a breadth of <a href="https://scholar.google.com.au/citations?hl=en&user=EHPbrxgAAAAJ&view_op=list_works&sortby=pubdate">research</a> showing the pandemic disrupted women’s – especially mothers’ – work and family lives, in catastrophic ways. Economic closures knocked women out of employment at <a href="https://arts.unimelb.edu.au/the-policy-lab/projects/projects/worsening">higher rates to men</a>, forcing them to rely more heavily on their savings and stimulus payments to make ends meet. All this while managing intensified housework, childcare and homeschooling. The <a href="https://read.dukeupress.edu/demography/article/59/1/1/286878/Research-Note-School-Reopenings-During-the-COVID">transition</a> to remote and hybrid learning meant mothers, not fathers, reduced their workloads to meet these newfound demands. Fathers picked up the slack in the home – doing <a href="https://theconversation.com/covid-forced-australian-fathers-to-do-more-at-home-but-at-the-same-cost-mothers-have-long-endured-154834">more housework</a> at the start of the pandemic and <a href="https://journals.sagepub.com/doi/full/10.1177/1097184X21990737">holding it</a> over time. Yet, as my colleagues Brendan Churchill and Lyn Craig <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/gwao.12497">show</a>, fathers increased their housework but so did mothers, meaning the gender gap in that time remained. So, while men should be applauded for doing more during the unique strains of the pandemic, we <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/gwao.12727">show</a> mothers were the true heroes of the pandemic, stepping into added labour at the expense of their health and well-being. Quite simply, the pandemic placed unparalleled pressures on Australian families. So it is perhaps no surprise our surveys are showing <a href="https://www.theage.com.au/national/victoria/the-juggle-is-real-parents-want-greater-flexibility-in-return-to-office-20220325-p5a820.html">Australians are burnt out</a>. (As discussed in <a href="https://theconversation.com/dont-give-mum-chocolates-for-mothers-day-take-on-more-housework-share-the-mental-load-and-advocate-for-equality-instead-182330">previous articles</a>, the chore divide in same-sex relationships is generally found to be more equal. But some critiques suggests even then, equality may suffer <a href="https://www.nytimes.com/2018/05/16/upshot/same-sex-couples-divide-chores-much-more-evenly-until-they-become-parents.html">once kids are involved</a>.) <h2>Time for action</h2> So, where to now? We pay upwards of <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/mediareleasesbyReleaseDate/1B9C46E8DBFC05FFCA25847D0080F9A2?OpenDocument">$640 million dollars</a> every five years to document Australia through the census. And, in each of these surveys we find the same result – women are doing more housework than men. This <a href="https://theconversation.com/sorry-men-theres-no-such-thing-as-dirt-blindness-you-just-need-to-do-more-housework-100883">parallels decades of research</a> showing women do more housework, even when they are employed full-time, earn more money and especially <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1741-3737.2008.00479.x">once kids hit</a>the scene. Men have increased their <a href="https://link.springer.com/chapter/10.1007/978-3-319-21635-5_2">housework</a> and <a href="https://aifs.gov.au/aifs-conference/fathers-and-work">childcare contributions</a> over time and <a href="https://journals.sagepub.com/doi/abs/10.1177/00113921211012737?journalCode=csia&fbclid=IwAR0Vgrre91fTarMY_EFLmDl1iJk7hPms6p3FhfM0E0y52Bbe9bZqmJ7Gs1A">younger men want</a> to be more present, active and attentive in the home. Simply put: men want to step into greater care giving and women are suffering from “doing it all”. We have documented these trends for decades – enough. Now it is time for action. <h2>Creating a fair future</h2> These are the critical questions we are asking through <a href="https://www.unimelb.edu.au/futureofwork">The Future of Work Lab</a> at the University of Melbourne – how do we create a future that is fair to everyone, including women and mothers? A few key projects illuminate some of the next steps towards clear interventions. The first is to provide Australian families with a comprehensive safety net to support their care-giving lives. All of us will be, at some point, called upon to care for a loved one, friend, family member or colleague. At these moments, work becomes difficult and housework demands soar. So, providing <a href="https://theconversation.com/if-were-serious-about-supporting-working-families-here-are-three-policies-we-need-to-enact-now-105490">care-giving resources</a> beyond just paid time off is critical. This underscores the need for <ul> <li>universal free high-quality childcare</li> <li>paid caregiver leave, and/or </li> <li>better and longer term cash payments for caregivers.</li> </ul> Second, we need comprehensive policies that allow <a href="https://pursuit.unimelb.edu.au/articles/flexible-families-workplace-equality">men to step</a> into care-giving roles without fear of retribution and penalty at work. Australians work more <a href="https://stats.oecd.org/Index.aspx?DataSetCode=AVE_HRS">annual hours</a>, on average, than their Canadian and United Kingdom counterparts, working hours more similar to the overwork culture of the United States. And, only <a href="https://www.theguardian.com/lifeandstyle/2019/may/28/only-one-in-20-fathers-take-primary-parental-leave-in-australia">one in 20 Australian fathers</a> take paid parental leave following childbirth, an abysmal rate relative to other high-income countries. We can do better. The pandemic created the space for many men to step into larger care-giving roles with great pleasure and showed workplaces that flexible work is feasible. Next, the Australian workplace must become more supportive of men’s right to care. <h2>Unpaid domestic work and the mental load</h2> Finally, we must redress the challenges of unpaid domestic work and the <a href="https://theconversation.com/planning-stress-and-worry-put-the-mental-load-on-mothers-will-2022-be-the-year-they-share-the-burden-172599">mental load</a> on women’s physical, mental and <a href="https://www.tandfonline.com/doi/abs/10.1080/13668803.2021.2002813">economic health and well-being</a>. Perhaps tech holds some solutions. The demand is clearly there with some super impressive women building out concrete tech solutions to reduce the mental load and unpaid domestic work - like <a href="https://getmelo.app/">Melo’s mental load app</a> or <a href="https://www.yohana.com/">Yohana’s virtual concierges</a>. Others are using old tech solutions – like <a href="https://www.fairplaylife.com/the-cards">Eve Rodsky’s Fair Play</a> cards – to help couples equalise the often unseen, and undervalued household chores. We are working on a research project to understand the impact of these different resources on families’ unpaid domestic loads and lives more broadly. The census is valuable in showing us we remain unchanged. But, now, is a time to invest in intervention and innovation to make us better versions of ourselves into the future. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/yet-again-the-census-shows-women-are-doing-more-housework-now-is-the-time-to-invest-in-interventions-185488" target="_blank" rel="noopener">The Conversation</a>.

Home Hints & Tips

The hidden dangers of investing in property

When it comes to investing in property, there are several things that can jeopardise the perfect sale to add to your portfolio. While it's important to be aware of the risks, there are also a few hidden “dangers” that each buyer needs to feel out on an individual basis. In order to make the best decisions, keep a lookout for these secret dangers in investing in property and how to properly manage them. Buying in your local neighbourhood Despite emotional attachment, investing in the neighbourhood you live in may not be the best idea for long-term capital growth. If there are over 10,000 real estate markets across Australia, statistically speaking the odds are very low that the property for sale right next door is your best choice. In order to make the best choices, it’s best to analyse and compare markets from all over the country to make the perfect pick and to minimise risk. Relying on “friendly” real estate agents While a lot of agents are there to guide you through the selling and buying process, it's easy to fall for a real estate agent’s charm. Just remember, they are working for the vendor, and their best interest is maximum profit for their client. The same goes for non-independent buyer’s agents who effectively are just sales agents for developers. Do your own research and comparisons on any investment, or seek the help of a truly independent buyer’s agent to assist you in the process. Not considering the risks in investment Buying property is a risky game, as vacancy, bad tenants or even interest rate rises can throw a spanner in the works. Engaging with professionals can help mitigate the risks, and help you be more aware of the harsh reality of investing. It’s important to embrace these risks and learn how to reduce them, not shy away from them. Short term vs. long term Buyers, investors and estate agents can tend to be reactive to what is happening in the market right now, and focusing on short term gains. The key to success in property is to take a long-term approach and ignore all the short-term noise. Starting with a plan first, then actively seeking out properties that suit your investment criteria will move you away from just being another property speculator to a true investor. Image credits: Getty Images

Real Estate

Instead of putting more massive trucks on our roads, we need to invest in our rail network

In recent years, the <a href="https://transport.vic.gov.au/ports-and-freight/freight-victoria">Victoria</a> and <a href="https://www.transport.nsw.gov.au/projects/strategy/nsw-freight-and-ports-plan">New South Wales</a> governments have both unveiled strategies to move more freight across the country by rail and ease the increasing pressure of goods moving through the two largest container ports. The reality is, however, the numbers of containers coming and going by rail to the Port of Melbourne and Sydney’s Port Botany have been going backwards. <h2>More massive trucks on Victoria’s highways</h2> The Port of Melbourne moves more containers than any other port in Australia. In 2020-21, <a href="https://www.portofmelbourne.com/about-us/trade-statistics/quarterly-trade-reports/">3.3 million</a> containers passed through the port, a <a href="https://www.portofmelbourne.com/about-us/trade-statistics/historical-trade-data/">30% increase from ten years ago</a>. Over this time, the percentage of containers moving by rail has fallen, reaching a <a href="https://www.accc.gov.au/system/files/Container%20stevedoring%20monitoring%20report%202020-21.pdf">low of 6.1% in 2020-21</a>. This has meant the number of trucks going to and from the Port of Melbourne has significantly increased. This has been assisted by improvements to the state’s roads and bridges. But the Victoria government also in mid-2021 <a href="https://transport.vic.gov.au/about/transport-news/news-archive/guiding-road-freight">approved</a> large “A Double” trucks being able to access the Port of Melbourne. These trucks can carry two 12-metre containers and be up to 36 metres long – much longer than the standard semitrailer at 19 metres. Large numbers of trucks accessing the ports not only add to road construction and maintenance bills, they also make our roads less safe and more congested, and add to noise and air pollution. The <a href="https://www.parliament.vic.gov.au/994-epc-lc/inquiry-into-air-pollution">recently released report</a> into the health effects of air pollution in Victoria notes the city of Maribyrnong has some of Australia’s highest levels of diesel pollution. This is mostly due to the number of trucks accessing the Port of Melbourne each day. The report also notes the transport sector is accountable for <a href="https://www.parliament.vic.gov.au/images/stories/committees/SCEP/Air_Pollution/Report/LCEPC_59-04_Health_impacts_air_pollution_Vic_Report.pdf">20% of Victoria’s total greenhouse gas emissions</a>. In 2018, Victoria introduced a new <a href="https://transport.vic.gov.au/getting-around/roads/heavy-vehicles">freight plan</a> that included initiatives to move more goods from the port by rail. One of these projects was the Port Rail Shuttle Network, a $28 million investment to connect the freight terminal in South Dandenong to the rail network. This is now underway. Increasing the amount of freight moving by rail will not only make our roads safer and reduce maintenance costs, it makes environmental sense – <a href="https://www.railfutures.org.au/2017/07/submission-to-inquiry-into-national-freight-and-supply-chain-priorities">rail freight produces one-third the emissions of road freight</a>. However, rail freight in Victoria is crippled by two different track gauges and tracks with too many temporary and permanent speed restrictions. Without greater investment to improve the rail system, it remains a less feasible option than moving freight on massive trucks on our roads. <img src="https://images.theconversation.com/files/437972/original/file-20211216-19-ljbvpc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /> A freight train passing through a level crossing in Cootamundra, NSW. Shutterstock <h2>Sydney’s situation is not much better</h2> A recent NSW <a href="https://www.audit.nsw.gov.au/our-work/reports/rail-freight-and-greater-sydney">auditor-general report</a> said the volume of freight passing through Greater Sydney is expected to increase by 48% by 2036. In 2020-21, <a href="https://www.nswports.com.au/nsw-ports-ceo-update-july-2021">2.7 million containers</a> moved through Port Botany. The NSW government had planned to increase the number of containers moving by rail from the port to <a href="https://www.nswports.com.au/resources-filtered/trade-reports">28% by 2021</a>. However, the auditor-general report said this effort would fall short. Just 16% is currently carried by rail. This means more trucks on the roads in NSW, as well. The NSW government has also recently <a href="https://www.smh.com.au/national/nsw/congestion-compounded-as-more-trucks-added-to-sydney-roads-20201101-p56aix.html">given permission</a> for “A Double” trucks to access Port Botany. The auditor-general report made recommendations on how NSW Transport could improve the operation of the state’s rail network to allow for more rail freight. It noted, for example, 54 trucks could be replaced by one 600-metre-long port shuttle freight train. <h2>Rail moving less intercity freight</h2> The rail network between Australia’s two largest cities is outdated and under-utilised. In fact, the proportion of freight moving between Melbourne and Sydney on rail has <a href="https://pacificnational.com.au/australias-major-highway-now-a-conveyor-belt-for-big-trucks/">fallen to about 1% today</a>. In 1970, it was <a href="https://www.bitre.gov.au/publications/2000/is_017">about 40%</a>. This is, in part, due to the total <a href="https://roads-waterways.transport.nsw.gov.au/about/environment/protecting-heritage/hume-highway-duplication/index.html">reconstruction</a> of the Hume Highway from a basic two-lane road to a modern dual carriageway, completed in 2013. There are now over <a href="https://roads-waterways.transport.nsw.gov.au/about/corporate-publications/statistics/traffic-volumes/aadt-map/index.html#/?z=6&id=GNDSTC&hv=1">20 million tonnes of freight</a> moved each year on the Hume Highway, with over 3,800 trucks on the road each day (and night at Gundagai). The result is more road trauma, higher maintenance bills and pressure for further road upgrades. Plus more emissions. The Sydney-Melbourne rail track, meanwhile, has been left with severe speed weight restrictions and a “steam age” alignment characterised by tight curves. It is also over 60 kms longer than it needs to be. <h2>From a national perspective</h2> Getting more freight on rail is not helped by hidden government subsidies to heavy truck operations, which in my estimations exceed <a href="https://theconversation.com/distance-based-road-charges-will-improve-traffic-and-if-done-right-wont-slow-australias-switch-to-electric-cars-150290">$2 billion per year</a>. It is also made harder by the current <a href="https://www.freightaustralia.gov.au/">National Freight and Supply Chain strategy</a>, which puts much more emphasis on increasing truck productivity with ever larger trucks. Instead, much more attention is needed to improving the efficiency and competitiveness of rail freight.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/172491/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/philip-laird-3503">Philip Laird</a>, Honorary Principal Fellow, <a href="https://theconversation.com/institutions/university-of-wollongong-711">University of Wollongong</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/instead-of-putting-more-massive-trucks-on-our-roads-we-need-to-invest-in-our-rail-network-172491">original article</a>. Image: Shutterstock

Domestic Travel

“That’s hot”: Aussie mum’s $500 investment becomes a $10 million business

Last year, Aussie brand Custom Neon received a voice message on Instagram from celebrity Paris Hilton, telling the signage brand she loved their products and would be keen to work with them. But, co-founder Jess Munday said nothing ever came of it. A year later, the star’s lavish four-day wedding included Kim Kardashian, Demi Lovato, Nicole Richie and custom items from the Geelong-based business. “She asked us to create neon signs for her wedding and it was an awesome opportunity,” Ms Munday told <a rel="noopener" href="https://www.news.com.au/finance/small-business/geelongs-custom-neon-finds-fans-in-paris-hilton-and-elon-musk/news-story/808941847d2bd4f0355f3fbf8eec1668" target="_blank">news.com.au</a>. “She had her wedding over three or four days I think and day two was a carnival themed party and in the party it had one of our neon signs - the biggest one, which said, ‘That’s hot’.” <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/CWPq__GveP5/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/CWPq__GveP5/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by Custom Neon® (@customneon)</a> </div> </blockquote> But the mum-of-two said it hasn’t been the brand’s only brush with celebrity fans. Elon Musk, the billionaire founder of Tesla, posted a neon sign with the phrase ‘cyberviking’ on Twitter - a nod to cryptocurrency dogecoin that quickly went viral. “That tweet went viral and we said that looks like one of our signs and we checked our records and it was created by us,” Ms Munday said. “He got it delivered to a place in California, which is very exciting.” <blockquote class="twitter-tweet"> How much is that Doge in the window? <a href="https://t.co/bxTkWOr50V">pic.twitter.com/bxTkWOr50V</a> — Elon Musk (@elonmusk) <a href="https://twitter.com/elonmusk/status/1395328697436033032?ref_src=twsrc%5Etfw">May 20, 2021</a></blockquote> Initially, Ms Munday started Custom Neon as a side hustle with her husband in 2018, while the couple were expecting their first child. “We were decorating my son’s nursery and my husband wanted to get a neon sign with the baby’s name and we looked around and couldn’t find one that was affordable and the process wasn’t easy to get a custom-made design,” she recalled. “He had seen it on Pinterest and he thought it was cool that you could get your son’s name and at the time having a baby and revealing the name is a big deal, so there was excitement of the baby coming and wanting something cool for the nursery.” The couple then found a supplier to make the sign, as well as a few for their upcoming wedding. Soon, they were renting out their wedding signs via Instagram, and began fielding inquiries for custom pieces from up to 20 businesses and individuals each week. Their $500 investment in their first few signs has since grown into a $10 million business in just three years, with Ms Munday saying the business is on track for a turnover of $18 million by the end of the 2021-22 financial year. She said Custom Neon has been a “whirlwind” journey and a far cry from her job in HR prior to taking maternity leave. During the last three years, the 32-year-old said there have been some interesting requests for signs, including people asking for pictures of themselves or their pet dogs as neon signs. Their signs have also made appearances on The Block, as well as inside a range of restaurants, bars and other businesses around the world. Though business from events dried up during the pandemic, Ms Munday said 70 percent of their orders now come from business signage, and that 60 percent of orders come from the US. “It’s such a huge part now and such a large country so there is much opportunity for growth,” she added. “We are planning to expand further into the US and set up our own manufacturing there in the next year. We also just secured an office in LA and have five people starting.” With such rapid growth already, this small business looks like it will have a bright, neon-lit future. Images: Jess Munday (Facebook) / @customneon (Instagram)

Money & Banking

Bec and Lleyton Hewitt list Melbourne mansion after big investment

Tennis star Lleyton Hewitt and Home & Away actress Bec have <a rel="noopener" href="https://www.realestate.com.au/property-house-vic-toorak-137660686" target="_blank">listed</a> their luxurious Melbourne mansion just weeks after scooping up a Gold Coast home. The pair’s Toorak home was listed for sale with a price guide of $15-16 million after they reportedly dropped $4.305 million on a coastal home in Burleigh Heads. Their five-bedroom family estate became the country’s most viewed home according to <a rel="noopener" href="https://www.realestate.com.au/news/lleyton-hewitt-and-wife-bec-list-toorak-mansion-after-buying-burleigh-heads-home/?rsf=syn:news:nca:news:spa:strap" target="_blank">realestate.com.au</a>, having racked up over 12,400 views in one week. It boasts multiple living and dining areas, a huge main bedroom, indoor and outdoor kitchens, and a basement with a 12-seat cinema, wine cellar, gym, and a six-car garage. Outside, the property also includes a pool and a Rebound Ace tennis court. The home is open to expressions of interest and the listing is being managed by Jellis Craig Stonnington agent Phillip French. Mr French first sold the property to the Hewitts for $12.7 million while it was under construction in 2016. He said the family had loved the home’s “very private position” and enjoyed its “great entertaining spaces”. The listing comes as the couple are expected to settle on their new Gold Coast home by November 15. The four-bedroom home sits less than 100-metres away from Burleigh’s surf beach, and boasts a tropical outdoor entertaining area with a sunken fireplace, pool, and barbecue kitchen. Conal Martin, the agent managing the sale, declined to comment on the buyer’s identity but said the family had visited since the sale and loved it. “I can say they do love the Gold Coast,” he said. “They’re a lovely family and they are welcomed in the area.” Despite purchasing a Queensland home, Bec and Llayton are rumoured to be moving to Sydney with their three children, Mia, 15, Cruz, 12, and Ava, 10. Images: @bechewitt23 / Instagram, realestate.com.au

Real Estate

REVEALED: The suburbs expecting plunging property prices

Despite Australia’s property market being worth more than $9 trillion as of Thursday, property owners in 10 suburbs may miss out on the profits. <a rel="noopener" href="https://www.news.com.au/finance/real-estate/buying/suburbs-in-nsw-vic-wa-sa-and-qld-where-property-prices-will-plunge/news-story/555745269846ecc8e570849ee452d44c" target="_blank">New market research</a> conducted by RiskWise Property Research and BuyersBuyers identified 10 suburbs across Australia that are the worst places to invest due to an oversupply of apartments. The suburbs have been identified as being in the “danger zone” for property owners looking to make a profit in a joint report released on Tuesday. “There has been a ‘race for space’ over the past 18 months, sending house prices higher, but unit prices in some high-supply areas look riskier,” the report said. <img style="width: 500px; height:375px;" src="https://oversixtydev.blob.core.windows.net/media/7844703/national-house-value.jpg" alt="" data-udi="umb://media/323df4c2d7b54c9996d2e0b8020c1afe" /> The ten suburbs are seeing huge growth in the next two years, which will drive down prices. Image: RiskWise Property Research and BuyersBuyers In New South Wales, Schofields came in first place as the riskiest area to invest in an apartment, with 3397 apartments being built in the next two years that amounts to a 115.7 percent increase in existing stock. Coming in second was the Melbourne suburb of Box Hill, which is expected to see an increase of 1833 apartments in the next two years and a 25.5 percent increase in stock. Next in the list is the Western Australian suburb Subiaco, followed by Gosford, NSW, and Victoria’s Footscray. <img style="width: 0px; height:0px;" src="https://oversixtydev.blob.core.windows.net/media/7844702/sydney-house-value.jpg" alt="" data-udi="umb://media/08fe49c1b1f4402dbc5c89f7538843e4" /> Seven Sydney suburbs have been deemed ‘at risk’. Image: RiskWise Property Research and BuyersBuyers The research group also compiled lists of the top ten ‘danger zone’ suburbs in NSW and Victoria, which make up the two biggest property markets in the country. <img style="width: 0px; height:0px;" src="https://oversixtydev.blob.core.windows.net/media/7844701/melbourne-house-value.jpg" alt="" data-udi="umb://media/cb174dc8c1e24a758b5acc7d313b8c01" /> A separate list identified the ten riskiest areas in Victoria alone. Image: RiskWise Property Research and BuyersBuyers The report came out two days before CoreLogic released an estimate of the total value of Australian residential real estate that exceeded $9.1 trillion. “Most housing markets (are) now beyond their peak,” CoreLogic noted. In September, national house values reached $719,209 while unit values reached $586,993. Image: Getty Images

Real Estate

How a financially-savvy 29-year-old plans to retire at age 35

Michelle Ives, a 29-year-old mother of one, believes she has discovered the secret to an early and stress-free retirement. The Central Coast native is planning to retire from running her own copywriting business when she turns 35 in just six short years. By then, her family will have an impressive investment portfolio worth over $2million. She plans to leave her job and live off between $70,000 and $100,000 a year from the money her family will make in investing. When Michelle started her first job at age 14, she said the idea of working into her 70s made her feel “very trapped”. But when she turned 21 and started working full time as a journalist, she got serious about following a strict financial plan. “Everyone followed this linear path to retirement where they work, work, work and do the nine-to-five or just have a job and then they get to 60 to 65 and retire and then potentially have a few golden years to make use of the nest egg that they have built, and that’s if they even have one,” she told <a rel="noopener" href="https://www.news.com.au/finance/superannuation/how-29yearold-michelle-ives-plans-to-retire-at-35/news-story/39a07c283824f7b95d58365a54056922" target="_blank">news.com.au</a>. “But it never made sense to me … and I didn’t feel like it was the only path to financial freedom. I was excited to work but why should I have to do that every day until I’m in my sixties or seventies and not even able bodied enough to enjoy it?” Michelle follows a financial movement called FIRE (financial independence and retiring early), which began in the US. The saving-savvy mum said the movement is primarily about saving the majority of your income and living off what’s left over. “We save around 70 to 80 per cent of our income, as the theory behind FIRE is you need to either take existing income and need to peel it back as much as you possibly can and create disposable income and start saving and investing that.” “Or create additional income streams, so get a raise or get a better job or have a side hustle or side business,” she said. “It brings forward the retirement age by decades than people can otherwise realistically do. For some people it’s 40 and for some people, 30 is increasingly becoming the age they can retire.” Michelle documents her early retirement plans on her blog and directs many people to financial resources to share her dream of an early retirement. Image credits: Shutterstock/Facebook: That Girl on Fire

Retirement Life

Discover 4 essential investing rules

I’ve spent 37 years working in either journalism or stockbroking and the same follies keep coming up time and time again. Rule 1: Diversify The first rule is easy, and one that we hear about all the time, that is, diversify. All that stuff about eggs and baskets is absolutely true. When you only have a small amount to invest it’s tough splitting it half a dozen ways, but consider the alternative. For instance there was the Queensland financial adviser who put his entire life savings into a Nigerian scam. This really happened. Aside from the fact that he should have been preaching diversification, he should have known enough about those Nigerian scams to give it the ten foot pole treatment. Over time one of the best performing asset classes is shares, also known as equities. Even though they have periodic crashes, as we all know, they are easy to buy and sell and there are a variety of different share types, depending on your appetite. There are growth shares, that don’t pay much of a dividend but whose prices rise solidly over time. There are dividend yielding shares, which work well for retirees because of the tax free benefit of franked dividends, and also consumer staples, often called defensives, because they hold up well in the bad times. Not forgetting new issues, known at IPOs or Initial Public Offerings, which is why the stock market came about in the first place: to raise money from the public for worthwhile ventures. Rule 2: Go for fully franked dividends The tax system in Australia encourages companies to pay local tax, and retirees to hold shares, by ruling that if a company has paid local tax, then the shareholders don’t have to pay tax again if they are in the retirement phase. That means that if you are getting a dividend yield of, say 6 per cent on some bank shares you own, and you are retired, it’s really the equivalent of around 8 per cent. In today’s low interest rate environment, that’s gold dust. The most popular shares in Australia for this are the Big Four Banks and Telstra. But remember, if too many people pile in as buyers there’s a risk the share price will subsequently fall, so don’t just pay any price to buy them. Take advice. Rule 3: Don’t overstretch yourself on property Don’t overstretch yourself on property when there’s a chance interest rates will rise. That’s where we are at the moment ... interest rates are at historic lows and that’s been exciting investors who have been looking much more closely at the monthly mortgage repayment they can afford, than the medium term outlook for property. Rates aren’t going to go up much any time soon, but when they do, so do mortgage repayments. To be fair to the banks, they’ve pulled right back on lending to investors and have in recent years “stress tested” loans to make sure borrowers can survive a two per cent lift in rates. That’s eight 25 basis point rises in rates by the Reserve Bank. That simply won’t happen any time soon, but meantime don’t buy into anything that’s going to have you financially stretched just because rates are low. Rule 4: Take control Find out how the share market works and bear in mind that the costs of buying and selling shares are lower now than they have ever been in Australia, thanks to the rise of online trading. Focus initially on buying shares that won’t suddenly let you down but at the same time, you usually have to take a bit of risk to make a good return. Don’t go for anything that looks too good to be true, as it usually is, but a careful crack at a few new floats isn’t the worst way to find out how the market operates. See which online advice and market access services are available and sign up to them. Some, like OnMarket’s app, are free, while others provide several different levels of information, some free and others by subscription. And remember, see Rule one. Written by Andrew Main. Republished with permission of <a href="https://www.wyza.com.au/articles/money/investment/four-essential-rule-for-investors.aspx">Wyza.com.au.</a>

Legal

How to spot an investment scam

Last year, Australians and New Zealanders lost a reported $31.3m and $10m respectively to scams, with investment scams promising fast profits at low or no risk. Many of the people targeted by cunning scammers were wealthy individuals who consider themselves savvy investors, and yet they still fell victim. One person is said to have lost more than $1 million to an investment scam before he finally reported the crime to the police. Scams are successful because the people running them know just what tricks to use to build a sense of trust in their unsuspecting victims. This cunningness means even seasoned investors should not be complacent. There’s no shame in making a mistake. NZ’s Commission for Financial Capability (CFFC) offers this advice: “If you have been victim to a scam, don’t be too hard on yourself. Scammers are experts at what they do and rely on people’s busy lives to distract them from the intent of their emails.” Scammers present a slick, professional appearance and often come with a raft of ‘documentation’ – quality websites and flyers, ‘reviews’ and a ‘history’ of successes. But there are ways you can spot an investment scammer. Look for these telltale signs. They like to cold call The vast majority of investment scams begin with a cold-call offer over the phone. Reputable financial services won’t initiate contact this way. While your bank may occasionally call you, it will always do so for a specific reason, and generally in response to your own attempts to contact them. According to Michael Baumann, General Manager, Everyday Banking and Payments, at the Commonwealth Bank, a bank will never call a customer out of the blue and seek confirmation of secure information. “We will never contact customers asking for their credit card number, card PIN, [online banking] password or code,” he says. “If customers opt to receive marketing material from their bank, we will send general information about a product or service, and invite them to read more on our website, visit a branch or get in touch with us. We won’t ask them to send us money or confidential personal information.” If you are contacted over the phone by someone purporting to work for a major bank, financial services firm or even a telecommunications company, and you’re not sure whether or not it’s a scam, call back through the company’s main switchboard (not the number the caller gave you) to check that the person works for that company in the capacity they have alleged. Alternatively, a quick Google search of the company name or phone number and the word ‘scam’ can often bring up details about the latest scam doing the rounds. You are targeted online The internet provides scammers with a very sophisticated avenue for doing ‘business’. Using Facebook ads offering access to ‘unique opportunities’, ‘mate’s tips’ in online forums and even offers in unsolicited emails, scammers trick online users into thinking they are the one initiating contact, when in fact you are taking a very clever bait. Remember, when you conduct any online research into companies you may wish to invest in, or look for financial advisers, be careful what links you open. Don’t fall for the unsolicited marketing that may clutter your screen with pop-up ads and offers – it could be a scammer. “You can’t lose. Don’t delay.” Any reputable investment adviser will tell you that you can lose. While some options are safer than others, nothing is guaranteed. A reliable adviser will recommend you spread your risk across several types of investment, whereas scammers will often encourage you to focus on just one, or declare that their portfolio is ‘risk-free’. Investment scammers push their ‘products’ by building a sense of urgency and exclusivity. Look out for claims of ‘limited opportunity’. This approach is particularly true of investments promoted at ‘wealth creation’ seminars, where investors are urged to sign on the dotted line right there and then. This removes any chance of seeking independent advice or time to consider whether the investment is worth the valuation given, or if the charges are reasonable. Some investment scams have actual items of worth as part of the scam, but ask you to pay in more than you would receive as your part of the company’s assets if the scheme was wound up. Never commit to any investment without obtaining independent legal or financial advice first. They won’t stop Reputable firms take no for an answer. They may follow up an initial contact from you with one or two offers, but a request to stop contact will be honoured. Scammers will sometimes take a hard ‘no’ reply, but just as often a ‘more senior’ staff member will come back to you with more information as to why you should invest with them. What can you do? In NZ if you receive a scam by text message, simply forward it to 7726 SPAM, and officers at the Department of Internal Affairs will investigate. In AU you can also report scams to ACCC’s Scamwatch at www.scamwatch.gov.au/report-a-scam. Baumann says, “Customers should always check that the person they are talking to is who they say they are. Ask them for their credentials, ABN or the number of the Australian Financial Services Licence they operate under.” If at any point the conversation seems uncomfortable, feel free to say no. Scammers will often create a sense of urgency. They may try to test your better judgement by claiming that something needs your immediate attention. “Education is key,” says Baumann. “Read up on what to look out for, so you don’t fall for it. Scamwatch is a good source of information. The CommBank website also has tips and advice for customers on how to stay safe online at www.commbank.com. au/personal/support/security.html.” You should also check details of companies you are considering investing in by checking the NZ Companies Register at www.companies-register.companiesoffice.govt.nz, ASIC’s ABN look-up online service at www.abr.business.gov.au, and make sure they are not on this list: www.moneysmart.gov.au/scams/companies-you-should-not-deal-with/. Then check to confirm that the company is registered and allowed to offer financial services at www.fma.govt.nz/news-and-resources/warnings-and-alerts/unregistered-businesses/. Greet all unsolicited investment suggestions with an enormous amount of scepticism. The old adage ‘if something seems too good to be true, it probably is’ definitely applies when it comes to investing. Written by Donyale Harrison. This article first appeared in <a href="http://www.readersdigest.com.au/money/investment-scam-alert">Reader’s Digest</a>. For more of what you love from the world’s best-loved magazine, <a href="http://readersdigest.innovations.com.au/c/readersdigestemailsubscribe?utm_source=over60&utm_medium=articles&utm_campaign=RDSUB&keycode=WRA93V">here’s our best subscription offer</a>.

Money & Banking

The do’s and don’ts for retirement investing in 2019

When thinking of retirement, many people are not completely aware of what they should and should not do. Here are a few of our do’s and don’ts when investing for you retirement. Do think long term If you’re still working and investing for your retirement, then your time may be still 5-10 years away. If you plunge out of the stock market before the December plunge and then jump back in after the nasty period ends, it makes little difference over the long term. Don’t think short term News stories should not always require sudden re-evaluation of your portfolio. Stocks look forward, not backwards. Do diversify Your portfolio should look diverse and not one portfolio should exceed over five per cent of your total portfolio due to a lot of risk. Don’t overemphasise small difference in returns It says nothing how one fund return will do in the years to come so don’t overthink a few percentage differences – these are not the be-all or end-all of your investment portfolio. Do embrace mistakes Your shortcomings or small mistakes (and even big ones) are learning opportunities and ignoring them sets you up for failure. Don’t obsess Don’t think too much about your best or worst performing stocks in a month, quarter or year – they usually cancel each other out. The total – broad middle – is what really matters. What are some of your retirement investing do’s and don’ts for this year? Let us know in the comments below.

Retirement Life

The unexpected risks you should prepare for in retirement

When it comes to planning your retirement, it is natural we focus on the risks that we’re most aware of. However, most future retirees or those already in the midst of their golden years are not prepared for the risks they haven’t thought about already. Here are the risks that may not be at the top of your retirement planning but should still be on your radar. Complacency risk Perhaps your savings were depleted when you were younger and you have kept a relatively low budget ever since to make ends meet in your everyday life – or even decided to keep a tight budget when you were younger and haven’t raised it since. Perhaps it seems your retirement account balances appear to be growing nicely so you never made sure if you were actually on the way to building a comfortable nest egg. You have fallen for complacency risk. While you’re on the road to secure retirement, don’t lull yourself into a false sense of security. You may be short of your ideal savings for retirement and it is important to protect against the risk by giving yourself a retirement check up every 6-12 months. Look for a retirement income calculator and write in your information including your income, the current value of your retirement accounts, how much you’re putting into savings each year and the age you plan to retire. This tool helps you calculate the probability of you achieving your goals. Emotional risk Marketing extremes and the impulse to buy are more likely to affect our investing decisions. This could mean we get too excited in the moments when stocks are on the rise or pessimistic when the market is falling short from your expectations. However, either way, letting your emotions take sway as your investing strategy can result in real damage to your finances and your retirement prospects. Perhaps to combat the risk of emotional investing, set up an asset allocation strategy so it will increase your chance of riding out stocks through their ups and downs without having an adverse reaction to them. An asset allocation tool can help you come with an asset mix that suits you best – one that is risk-free. Longevity risk There is a possibility that perhaps you have underestimated how much longer you will live. This can result in an individual overspending during their retirement and being under-prepared when the unexpected comes to fruition. It is impossible to know when you’re going to reach the other side but being realistic with your spending and your retirement plan is crucial to a consistent lifestyle that doesn’t leave you looking for scraps near the end. Seek a professional or use an Actuaries Longevity Illustrator that estimates how much you should be saving while you’re working, and how much you can safely afford to spend during retirement. Although this won’t eliminate the risk of longevity – it will equip you much better, so you know how to deal with it if or when the time comes. How are you planning for retirement? Tell us in the comments below.

Retirement Life

10 ways to find new investment ideas

Investors now have an unprecedented amount of information available to them to expand their knowledge base, which is especially important to those who are managing their own superannuation money. You can gain investment ideas predominantly from the following 10 sources: 1. Media The media provides a wealth of information on individual stocks, market themes and economic trends. Valuable media sources include financial newspapers, radio, television and online newsletters such as Cuffelinks and Livewire. Market data provider Bloomberg, which is universally used by institutional and professional investors, has free daily email alerts and newsletters available on its website. 2. Market tables and price movements After the market closes each day, share market tables can be reviewed to identify companies with share prices that have reached 12-month rolling highs and lows. When a price hits a 12-month high, it can indicate a degree of momentum (particularly in a bull market) that will drive it higher. Conversely, if a company hits its 12-month low, this is often a sign of fundamental company issues and the price is likely to fall further. 3. Word of mouth While company executives can provide a biased perspective, personal and business contacts with knowledge of a company or industry can be more objective. Some of the most illuminating investing insights can come from personal and professional connections such as family, competitors, sell-side analysts and other fund managers. 4. Stock brokers Stock analyst reports provide valuable and well-researched business insights. If a company is covered by sell-side research analysts, analysing their reports and understanding the consensus forecasts could prove valuable. 5. Directors buying As a general rule, a company’s directors know more than others in the market. Therefore, directors buying shares is a very strong signal about the business. The announcement of a Change in Director’s Interest Notice revealing a company director has substantially increased their holding may prompt us to examine the company further. 6. Observations of a business Everyday observations can also offer insights into a company. Apple’s share price languished for many years until after the release of its portable media player iPod. Around this time, the casual observer would have witnessed thousands lining up to buy the iPod and an increase in foot traffic at Apple stores, however this strong demand was not reflected in Apple’s share price. Apple subsequently sold 55 million iPods, generating US$9 billion in revenue and spurring the share price. 7. Life experiences, behaviours and preferences Our own life experiences, behaviours and preferences, and those of the people around us, can also reveal a consumer trend, or structural industry change, that leads us to an investment idea. Some time ago, I tried to buy a tin of infant formula only to find there was a considerable shortage. This experience demonstrated demand for this particular product was vastly outstripping supply. This insight was the catalyst to investigate the company and subsequently invest in it. 8. Company meetings and site tours Company meetings and visits offer insights into a business such as the quality of management and its culture. Individual investors can sometimes join site visits arranged by the company. For example, an executive’s remark that a certain competitor is giving them a ‘run for their money’ could prompt us to investigate that competitor business as a potential investment. Any investor can contact a company and ask to meet the CEO or other executives and, while access to executives at larger companies may be limited, micro and small-cap companies should welcome interest from potential shareholders. Retail investors may also have the option of listening to earnings results teleconferences, giving them the opportunity to interpret the executives’ tone, as well as their words. Larger companies often host investor days for shareholders. 9. ASX announcements Previously undiscovered investment gems can be found through regular scan of ASX company announcements. Company announcements can be a particularly good source of micro-cap investment ideas during reporting season, and are available to everyone. 10. Ask a lot of questions Having a fascination with the market and an inquisitive attitude are indispensable attributes for investors. The most successful investors ask a lot of questions and are driven to gain an in-depth understanding of a company, trend or investment theme. It’s possible to generate a worthwhile investment idea, or a piece of information that leads to one, from a vast range of sources. Constantly gathering insights to develop a broader knowledge base and being alive to potential investment ideas is key. Do you have any other sources for investment ideas? Share them in the comments below. Written by Chris Stott. Republished with permission of <a href="https://www.wyza.com.au/articles/money/superannuation/10-ways-to-find-new-investment-ideas.aspx">Wyza.com.au</a>.

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