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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

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

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

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>.

Retirement Income

Should you save or invest?

It might seem like stating the obvious to say there are fundamental differences between saving and investing, but do you actually know what those differences are and how they can impact your financial planning? By definition, saving refers to the practice of setting money aside, usually on a regular basis, to accumulate toward a specific goal, such as a holiday, a home deposit, a car, or perhaps some other less concrete “rainy day” purpose. Investing, on the other hand, is the practice of putting your money in some type of asset or account with the purpose of growing value through returns or capital growth. Where do you save or invest? The priority with saving is preservation and accessibility, so the vehicle used is normally one which protects your money until it can be applied to the intended purpose. In years gone by this may have meant hiding cash in your sock drawer or putting it in a safe, but these days most of us use a bank account. It may only be earning minimal interest, but the main purpose is simply to keep it secure and easy to access. Investing is focused more on growth or income generation, so the priority is usually to find a vehicle that can deliver those attributes, such as shares, property, or some kind of deposit product that pays interest. This will usually involve limited accessibility and may also involve increased risk of values fluctuating over time. Should you be saving or investing? The short answer for most people is “both”, but the degree to which you do either is heavily dependent on your situation. If, for example, you are living from pay packet to pay packet without any fallback funds, or if you have significant debts which are out of control, then saving takes on a much greater priority. As a general rule, if you are in that type of situation, you should first focus on: <ul> <li>Saving to build up an emergency fund amounting to at least three months’ income</li> <li>Directing any other discretionary income toward debt repayment until you have debts under control</li> <li>Ensure that you have contingency plans in place to protect dependents against disasters, such as illness, accident, or premature death. This can be done via personal insurance plans, such as income protection and life insurance.</li> </ul> These actions will provide stability within your financial planning and once they are sufficiently catered for, you can then start to invest. Once you are in a position to invest, the next step is to ensure you have a clear picture of your goals and timeframes. Generally, investment goals can be categorised into short, medium, or long-term, and the way that you invest will be heavily dependent on which of these categories your investment goals fall into. Matching investment types to your goals Due to the fact that most investing involves some degree of risk, it is important to match the type of investment to the goal you have in mind. Short-term investment goals might include anything that is up to five years away, for example, if you are aiming to build up an education fund for a child or grandchild, and you know they will be going to university in five years’ time, then you need to invest in something that you can confidently liquidate in five years without undue risk of losing capital. This might mean primarily investing in cash-based assets such as term deposits or fixed interest investments. If you were to invest in property or shares for such a short term, there would be a real risk that the market may be depressed at the time you want to withdraw, so these would not be wise investment choices. For medium and long-term goals, however, you have more scope to invest in those more volatile asset classes, because historically, they have a better chance of providing real growth over time. A classic example of this is your superannuation. If you have 10 or more years before you need to access the funds for retirement, then you have a substantial timeframe in which to diversify your investment across a variety of assets, including property, shares, and managed funds. Because you don’t have a need to liquidate those investments early, you can ride out any fluctuations with the objective of capturing growth over the full timeframe of the investment. As you get closer to the end of the timeframe, you can gradually switch your investment out of growth assets and into more secure areas, so that you can lock in any of the gains you have made. Get help to put your strategy together Most of us have a range of things that we might be saving or investing for. This can often mean we need a sophisticated approach to where we allocate funds to gain maximum effect. A financial planner can be invaluable in helping you identify and rationalise all of your short, medium and long-term goals, and can help you map out a strategy that will allocate, manage, monitor, and adjust your strategy over time. What are your ideas on the best ways to save? Share your thoughts below. Written by Bridges. Republished with permission of <a href="https://www.wyza.com.au/articles/money/financial-planning/should-you-save-or-invest.aspx">Wyza.com.au</a>.

Retirement Income

5 ways to earn more stable investment income

Fixed interest investments have traditionally been an attractive option for investors who are looking for a steady income stream. There are many types to choose, each with varying risks and benefits, so you need to be careful in choosing which is right for you. The summary below may help you compare the merits of various fixed interest options and we also take a look at a “new kid on the block” that is catching the eye of many investors looking for healthier returns. Government bonds Government bonds have long been a mainstay for fixed interest investors, thanks to the attraction of their high security. A government bond is effectively a loan you are making to the government with an agreed interest rate and fixed term. The fact that the government guarantees the return of your principal at maturity makes them safe and reliable, but the interest rates are generally quite modest. Government bonds usually need to be purchased through your broker. Peer-to-peer lending Peer-to-peer lending is a relatively new concept in Australia and holds appeal to investors who are looking for new fixed interest opportunities. The big attraction in comparison to the other alternatives described here is that they offer investors attractive returns by providing them direct access to the previously hard-to-access asset classes of consumer and business credit. Peer-to-peer lenders match people who have money to invest directly with people who are looking for a loan. This is done using an online platform, which effectively bypasses the need for a traditional financial institution. Investors get the potential to achieve higher returns while being able to control the level of risk they take on. They can specify parameters on the use of the funds they invest, such as nominating the interest rate, loan period and on some platforms the credit criteria of the loans to reflect their risk appetite. By opening up the market and connecting lenders and borrowers more directly, there is no need to rely on a bank to set the borrowing terms. The transparency, efficiency and control inherent in the concept is driving the popularity of peer-to-peer as an option for fixed interest investors and the fact that platforms open to retail investors are well regulated and must conform to ASIC rules is adding to their acceptance. Peer-to-peer lending is already well entrenched in the UK and USA and is now entering the mainstream in Australia. Of course there are still risks involved, but P2P lending platforms place a strong emphasis on control and transparency, helping investors choose the platform and assets that match the risk level they are comfortable with, rather than relying on the whims of a monolithic institution. Some also provide a Provision Fund which can help protect investors against borrower late payments or defaults. It could be a clever option for those investors looking for a new way to earn competitive fixed interest rates. Corporate bonds Corporate bonds bear some similarity with government bonds in that they involve lending money (in this case to a company) at an agreed interest over a set term, but there are important differences. Bonds can vary greatly in the amount of capital security they offer. Generally speaking, corporate bonds are less risky than buying shares in a company, but their ability to pay interest and to pay back your capital at maturity can be compromised if the company goes out of business. Bondholders take a higher priority than shareholders if this eventuates, but the risk of capital loss still exists. Corporate bonds can also be traded prior to maturity on a market such as the Australian Securities Exchange. The market value of a bond on the market may differ up or down from its face value, based on current economic conditions. Take for example if you were selling a 10 year bond that was paying 5% p.a. interest. If market interest rates had slumped to, say, 2.5%, then the interest income from your bond would be very attractive to buyers and the bond could be sold for a higher price than its face value. Conversely, if market rates had jumped above 5%, then the value of the bond could go down. Mortgage schemes Mortgage schemes are a type of managed fund that lends to borrowers to buy property or to undertake property development projects. On the surface these may seem safe and have attractive interest rates, but there are potentially higher risks. Mortgage schemes are often used to raise capital by developers who may not be able to secure loans from banks, due to the higher risks of borrowers defaulting or a property development project going bust. Hybrid securities The term ‘hybrid security’ is a catch-all name that covers a range of investments with odd sounding names, such as ‘capital notes’, ‘convertible preference shares’ and ‘subordinated notes’. These can be highly complex investments that are issued by institutions like banks, but this doesn’t mean that they offer the level of security that you would normally associate with bank investments, (such as term deposits). Rates can be attractive but in certain circumstances your investment could be converted to shares in the bank and leave you with less capital than you initially invested. Do you have any investments? Have you branched out into P2P lending? Let us know in the comments! Written by Tom Raeside. Republished with permission of <a href="https://www.wyza.com.au/articles/money/investment/what-are-your-options-on-fixed-interest-investments.aspx">Wyza.com.au.</a>

Retirement Life

Shark Tank contestant and former Coles worker scores $100,000 investment

A Shark Tank contestant has scored a $100,000 investment for his business idea to gift cupcakes in mason jars. Former Coles employee James Willis, 26, impressed the show’s judges when he presented his idea on Tuesday. Instead of sending flowers, James’s business sees overnight delivery of assorted cupcakes in secured mason jars, ensuring they are not ruined in transit. “I knew people would want to get cake in the mail but you can't send cupcakes because they get squished,” he said. He explained to the judges that his concept and delivery method was a first in Australia. “So we're the only cake manufacturer that can ship Australia-wide overnight which is pretty exciting,” he said. “Everyone's sending flowers, no one's sending cupcakes in a jar.” Judges Andrew Banks and Naomi Simson offered James the $100,000 investment for a 30 per cent stake in the business. The business, named The Mason Baker, is expected to bring in over one million dollars in retail sales over the next year. On The Mason Baker Instagram page, James shared a photo with his two new investors. <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: 658px; padding: 0; width: calc(100% - 2px);" class="instagram-media"> <div style="padding: 8px;"> <div style="background: #F8F8F8; line-height: 0; margin-top: 40px; padding: 62.175925925925924% 0; text-align: center; width: 100%;"> <div style="background: url(data:image/png; base64,ivborw0kggoaaaansuheugaaacwaaaascamaaaapwqozaaaabgdbtueaalgpc/xhbqaaaafzukdcak7ohokaaaamuexurczmzpf399fx1+bm5mzy9amaaadisurbvdjlvzxbesmgces5/p8/t9furvcrmu73jwlzosgsiizurcjo/ad+eqjjb4hv8bft+idpqocx1wjosbfhh2xssxeiyn3uli/6mnree07uiwjev8ueowds88ly97kqytlijkktuybbruayvh5wohixmpi5we58ek028czwyuqdlkpg1bkb4nnm+veanfhqn1k4+gpt6ugqcvu2h2ovuif/gwufyy8owepdyzsa3avcqpvovvzzz2vtnn2wu8qzvjddeto90gsy9mvlqtgysy231mxry6i2ggqjrty0l8fxcxfcbbhwrsyyaaaaaelftksuqmcc); display: block; height: 44px; margin: 0 auto -44px; position: relative; top: -22px; width: 44px;"></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;" href="https://www.instagram.com/p/BlDNwJ9FP-W/" target="_blank">A post shared by The Mason Baker (@themasonbaker)</a> on Jul 10, 2018 at 4:55am PDT </div> </blockquote> He wrote: “Excited to do a deal with @abanks_88 and @naomisimson - Some big announcements to come! Watch this space.” Before launching the business in July 2017, James worked in the bakery department at Coles. The young entrepreneur has also signed a deal with Australian online flower retailer Roses Only to sell his jars, increasing weekly production from 1,000 per week to 5,000 plus. What are your thoughts on this business idea? Let us know in the comments below.

Money & Banking

Why you need to invest in yourself to retire well

I have a particularly resourceful friend who lives a pretty good life, despite never having quite enough money. She is hardworking and popular with her wide circle of friends, neighbours and colleagues. She networks, barters and works for what she really wants. A former chef turned teacher, she finessed enough grant money to pay for a two-week trip to cooking school in Italy. She knows where all the good used furniture stores are, has bartered home cleaning for a two-week stay in a holiday home, and is working on an arrangement now that will get her free housing in France for several weeks this summer. Tres bien! I'm pretty sure my friend will do really well in retirement, though I strongly suspect she has nowhere near the $1-million plus that you would think her lifestyle would require. She has a different kind of capital: skills, smarts, and a great social network. "Everyone is focused on the money, but when somebody retires, they usually manage," said Larry Cohen, director of Consumer Financial Decisions, a consulting group that studies consumer behaviour. "If they don't have the money, they have human capital like skills and education, and social capital in terms of friends, neighbours or a church. All these things help." Cohen predicts: "The (retirement) solutions for the future are going to involve more of these other forms of capital." Experts are increasingly focusing on the non-financial assets that workers can bring into retirement to help them manage on fewer dollars than might be optimal. So what are the best non-financial forms of capital that pre-retirees can invest in now to insure a good retirement? Here are a few. Investing knowledge Nothing good can come of being uninformed about investing. The more you know, the more you can grow small contributions into a retirement kitty you can live off of. Break it into small bits and learn a little every month. Learning about stocks, taxes, portfolio management and the like will help you, at the very least, choose the right adviser. And it will also help you stretch your income after retirement. Money-earning skill The baby boom may well have psychological problems adjusting to the "withdrawal" era of their lives. It could be harder than you think to find money to see a movie or make a car payment. So develop something now that can earn money in the future. Some popular money-earning side business include TradeMe sales, handyman work, cooking, babysitting and driving. Money-saving skills Gardening, appliance repair, lawn mowing, scratch cooking, vacuuming ... got it? If you're the kind of person who currently pays others to do all of these things for you remember this: In retirement you'll have more time and less money. Friends and neighbours Can you drive each other to the airport? Share big bargain packages of toilet paper and tomatoes? Check in on each other when you haven't surfaced for a while? Does someone in the crowd make their own tomato sauce and another fix cars? Or own a beach house or a garden tiller? There's no end to the savings that a supportive collective like that can generate. And, of course, people who are connected to others enjoy life more and may be able to entertain themselves more cheaply. Best body possible The better shape you are in going into retirement, the less you'll spend on pain pills, back braces and more. Of course, you can't control everything that befalls you, but moving into retirement with strong bones and muscles, a good sense of balance, and cardiovascular fitness will improve your retirement fun and cut your retirement expenses. Craftiness Retirement can be like a second chance; the rules come off and you can do things you might not have considered while you were in your main buttoned-down job. Practice creativity now, just like my friend, and you'll be ahead of the game when your new job is making that smaller-than-you'd-hoped retirement fund last a long and happy time. Do you agree with this advice? Written by Linda Stern. Republished with permission of <a href="http://www.stuff.co.nz/" target="_blank">Stuff.co.nz</a>.

Retirement Income

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