How to keep on top of your finances while living abroad

Keep top of your finances while living abroad
 

I recently spoke to Finder’s Sally McMullen, host of the Pocket Money Podcast, for her top tips on the finances you need to arrange before you move overseas for work.

Stockspot clients love to travel and work abroad. We regularly hear from clients who are moving overseas for work, asking us about their investments. Everyone’s situation is different depending on the country you’re moving to and how long you’ll be gone.

We can advise on what’s best for your Stockspot investments (just email or call us), however there are other things you need to consider when you’re heading overseas for work.

According to the Government’s Smart Traveler website there are 1 million Australians living and working overseas at anyone time. That’s about 4% of our population! So we thought we’d share Sally’s top tips with everyone:
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How are ETFs taxed?

How are ETFs taxed?
 
ETFs: Everything you need to know about tax on ETF investments in Australia.

One of the reasons exchange-traded funds (ETFs) have gained popularity with Australian investors is because they are highly tax efficient.

Compared to managed funds and Listed Investment Companies (LICs), ETFs tend to have lower turnover and pay out fewer capital gains. This is great news for investors in ETFs who typically inherit a lower tax bill during their holding period compared to other fund structures which need to distribute regular capital gains from redemptions or frequent rebalancing.

If you’ve invested in ETFs on your own, through a broker, or with the help of an automated investment service like Stockspot, here are some tax issues to consider.

Keep in mind that this article is general information only and doesn’t consider your personal circumstances.
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What are the best Australian Bond ETFs?

Best Australian bonds ETFs
 

There seems to be an important investment asset that many Australians have forgotten.

This particular asset has proven time and time again to have great diversification benefits and provide steady, reliable income.

What asset is this you may ask?

The name is Bond…Fixed Income Bonds, and much like 007’s martini cocktails, when markets are “shaken, not stirred”, bonds can be a valuable part of your portfolio.

In this article we’ll show you why and what we look out for when selecting a bond ETF.
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Dollar-cost average or go all in?

Dollar cost averaging
 

In this blog, we uncover all you need to know about dollar-cost averaging, what it is and how it could help you gain more of life’s most valuable asset – time.

Dollar-cost averaging sounds quite technical doesn’t it? As with most things finance related it’s another jargony term for quite a simple investment strategy that involves making small, regular, contributions to your investments.

The sophistication doesn’t come from the strategy itself, but how it could help you gain more time, sleep and peace of mind. Whether you’re new to investing or a professional, the decision of when to invest your money can be a challenging one.

Should you invest everything at once or dip your toes in by investing smaller amounts over time? Often we get caught on the hamster wheel trying to work out which is better. This procrastination can paralyse us from making any decision – which is the worst decision of all.

The truth is, both strategies have their own merits and limitations, but often our choice of one over the other is linked to our desire to reduce our sense of short-term regret.

So, what is the best approach?
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Do you suffer from lifestyle inflation?

lifestyle inflation
 

Ever looked at your bank account balance and wondered where all your money is going? If so you may have fallen victim to lifestyle inflation.

What is lifestyle inflation I hear you ask? It’s increasing your spending as your income rises. Like boiling a frog the change is gradual so it can easily go unnoticed until it’s too late.

One of the key drivers of lifestyle inflation is “keeping up with the Jones'”. This is when people begin to spend more money on items such as cars, boats or luxury holidays because those around them are doing it.

The people around you are likely to be spending a large majority of their income or are accruing debt to maintain that lifestyle. Australian household debt is among the highest in the world at 200% disposable income.
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Better investing on autopilot

Investing on autopilot
 
Almost 7 million Australians invested in direct shares or other securities such as Exchange Traded Funds (ETFs) in 2018, up from 6 million in 2015.

If you are one of these investors, or are considering starting investing, you should ask “How does Stockspot compare to managing my own investments online with, say, CommSec or NabTrade?”

Content:

  1. Build a diversified portfolio instantly
  2. Saves time and risk
  3. Helps you avoid mistakes
  4. Avoids costs like brokerage fees
  5. Keeps up with your situation and goals

 
Certainly the trend over the last 10 years has been towards more people investing themselves. The latest ASX Share Ownership Study highlighted that direct ownership of shares and ETFs has rocketed over the past decade, while interest in managed funds and professional advice has fallen.
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Top 5 reasons for portfolio diversification

Diversification tips
 

I spoke on Your Money’s Investing 101 segment this week with the ASX’s Rory Cunningham to share my top 5 tips on why you should diversify your investment portfolio. Here they are:

1. Diversification gives you a smoother ride

Diversification is about spreading your money across different investments to enjoy a smoother ride. It serves as a cushion to protect your basket when a few eggs crack.

Diversification is important for anyone who doesn’t want to experience stomach churning ups and downs in their portfolio which is what happens when you only own a few shares.

The theory on how to use diversification was pioneered by Harry Markwitz in his paper “Portfolio Selection” published in 1952.

He showed that by owning shares in different industries and countries as well as other asset classes like bonds, you could get a smoother portfolio return without sacrificing return. Markowitz later won the 1990 Nobel Prize in Economics for his work.
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What Labor’s proposed changes to franking credits mean

Labor franking credit changes
 

Everything you need to know about Labor’s proposed franking credit changes including how the changes could actually be good news for self funded retirees, SMSFs and the Australian economy.

One of the more controversial policies being recommended by the Federal Opposition in the lead up to the 2019 election is the removal of cash refunds for franking credits or dividend imputation credits.
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Women and investing

Stockspot women investing
 

A dream for many women is to be financially independent and free from worry about money. The unfortunate thing is, it remains a dream for many.

The financial disparity between men and women in Australia is an important topic to address as we continue to see gender-based inequities present themselves.

We live in an age where women are predicted to outlive men by almost half a decade. This begs the question, what can women do differently over the course of their lives to help them achieve more financial independence and control?

We know that many women take time out of the workforce to care for children; that on average women’s remuneration is 21.3% less than men; that on average women retire with 37% less in super and on top of this, will outlive men.

It doesn’t feel like the odds are stacked in our favour does it? This sense of inequality leads to many women feeling disempowered, stressed and fearful of their financial futures.

How can we flip this so more women feel in control, positive and connected to their financial futures. What would it take to get there?
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What returns have Stockspot clients earned?

Stockspot client returns
 
Why some numbers matter more than others when you invest. We show which figures you should focus on and how Stockspot clients have done.

A couple of questions we often get asked by clients are:
‘How do my returns compare to others?’, and
‘What are the average returns earned by people like me?’.

Both are great questions and ones you should ask any investment adviser – more on that later. Let’s start with the basics on how Stockspot and others calculate returns.

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Does it bring you joy?

Marie Kondo
 
If you haven’t been swept up in Netflix’s cult hit Tidying Up with Marie Kondo aka the KonMari method, then you’ve probably heard of her or at least noticed overflowing charity bins outside your local grocery store.

Vinnies has never had it so good!

What is alarming about the Netflix series is the consumerism and how much stuff these people are sending to landfill. When I say these people, I sadly have to include myself.

The series shows that very little of the stuff we buy brings real joy. Quite the opposite, wondering where your money goes is painful when all you’ve got to show are matching Sheridan towels.

If you’ve taken Marie Kondo into your heart and home it might be time to Marie Kondo your finances.
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What are the best Global Share ETFs?

Global share ETFs
 
International share ETFs and U.S. share ETFs have had a huge increase in popularity for individual and SMSF investors in Australia.

As of 2019 there is over $17 billion invested in ETFs tracking global shares on the ASX. The largest and most popular track either a broad global index or the U.S. share market which is considered to be a proxy for global shares.

Each year we compare all 175+ ETFs in our ETF Report. Here we road test 12 popular Global share ETFs, comparing them across 5 factors, as well as summarising our favourites.
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Performance update – January 2019

January performance update 2019
 
2018 was a down year for investment returns across the board.

In US dollar terms, every major asset class apart from cash fell in value. That’s an even larger percentage of assets falling than the financial crisis in 2008! If you didn’t lose money as an investor in 2018, you’ve done very well.

The Australian dollar also got hit, falling 9.7% during the year. The falling dollar had a silver lining since it helped to boost returns for Australians investing overseas who had not hedged the currency.
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How to kick start your money mojo in 2019

Money Mojo
 
January is upon us and so are the myriad of ‘how to keep your new year resolution’ articles, often slightly preachy, annoying and unrealistic.

Finding your money mojo isn’t about being able to buy lots of things. It’s about having more freedom and security over your future. Money in the bank and a diversified investment portfolio is knowing you have the freedom to do what you want to do.

Here are some not too preachy ways to find your money mojo in 2019, minus the obvious cliches about reducing your spend on coffee or to go grocery shopping on a full stomach.
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How I’d fix default super

Productivity Commission Superannuation Report
 
If you’re someone who has selected your own super fund or set up a Self Managed Super Fund (SMSF), it might surprise you to find out that you’re an exception.

The majority of Aussies just take the fund they’re ‘defaulted’ into by their employer when they start work. These default super funds make up about 80% of all super accounts.

Most people in default super take little to no interest in their fund and they tend not to switch regardless of performance.

Because of this, default super funds don’t face the kind of price-based competition they would in other industries where customers demand value-for-money.
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Market predictions for 2019

Market predictions 2019
 
The start of the new year is a popular time to make predictions about the market.

A lineup of experts will confidently tell you which shares to buy, if property is going up or down, whether the RBA will raise or cut rates, where the Aussie dollar is heading and if the stock market will crash.

Expert market forecasts have been a pet peeve of mine for a long time. I’ve never understood why they’re so popular (to give or receive) in light of how terrible forecasters track records are.
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The best podcasts for 2019

Best podcasts 2019
 
Over the past few years podcasts have evolved from slightly daggy, amateur passion projects to professional, high quality productions.

Apple Podcasts reckon they have over 500,000 active podcasts in 100+ languages on their platform and there’s no sign of this slowing in the near future. Podcasts are a fantastic format for learning and entertainment while travelling, exercising or just relaxing at home.

Here are some of our team’s favorite podcasts. From current affairs, long-form interviews to pure entertainment here’s what we’ve been listening to over summer. We hope it helps you discover something new for 2019.
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What I learnt at the ASX Investor Day

Chris Brycki ASX event
 

I recently presented at the ASX Investor Day in Sydney, which I was thrilled to be asked to do since the ASX has featured heavily in my life.

First winning the ASX share game as a school student, then as the work experience kid and more recently as the CEO of Stockspot.

The topic the ASX gave me was: ‘Why invest on the ASX? How to pick the best investments’.

I really enjoyed the opportunity to present to 300+ eager investors and hopefully provide some useful tips to help make them better investors.
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Savings accounts are broken. So we decided to fix them

Stockspot Savings
 
Tired of low interest rates on your savings?

So are we! That’s why we have created a better way to save money.

What is Stockspot Savings?

Stockspot Savings is an alternative to a high-interest savings account and ideal for cash savings you don’t want to invest. Rather than deposit money with a bank, Stockspot Savings will place your money into a high interest cash ETF. You get access to the best interest rates from the big banks without having to lock away your savings for months or years.
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People & Perspectives: Scott Pape, The Barefoot Investor

The Barefoot Investor
 
Scott Pape’s The Barefoot Investor for Families is the fastest-selling nonfiction Australian title ever. Straight talking, practical and above all wise, Pape’s Barefoot Investor program for families is part money manual and part good life lessons.

I admit when the book came across my desk I was a little sceptical. However like thousands before me, his approach to money struck a chord. And I don’t even have kids! Scott kindly took some time out of his busy schedule to chat with me about his books and thoughts on money.
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Index investing succeeds in down markets too

Index investing in down markets
 
Whenever markets fall, funds who use active stock picking or market timing strategies fire up their sales engines. Their pitch? That if you put your trust in their active strategy you won’t have to withstand the down periods that come with a ‘buy and hold’ strategy.

It’s a tempting story! Why go through the emotional roller-coaster of down markets if that part of investing is optional…
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