Her Financial Network

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A copy of our favourite investment book 📚 (for your summer read)

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It’s called super contribution splitting and you should definitely know about it!

Be kind to yourself & invest in you!

Your 30’s can often feel like you’ve arrived into adulthood with a loud CRASH and BANG.

So we’ve come up with our TOP 5 quick tips to help you navigate your 30’s 💪🏼

This is a decade where the financial decisions you make are more complex, typically have an impact on others, and are costly as you may experience mile stone life movements like career changes, getting married, starting a family or buying your own home.

Not only must you cover the costs that arise as you experience these significant life changes, many people in their 30’s are also consciously preparing and actively investing into their wealth creation plan for the decades to follow.

Given your 30’s represents the opportunities to ramp up your career as you progress towards what could be your peak earning years, you may also have greater financial responsibilities to consider. So, it’s important to develop a clear financial plan and set out realistic goals to help you promote capital accumulation and wealth for the years ahead.

Check out our blog for more insights!

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Redraw lets you access extra repayments you've made on your loan.
 
The contracted repayment amount is the lowest amount you need to pay your lender for your home loan.

Anything paid above the minimum repayment may allow you the option of accessing a redraw facility (if available) or taking a repayment pause

It’s a facility attached to your loan, not a separate deposit account like the offset account.

This means that it doesn’t give you the same flexibility to access the money in the manner that an offset account may.

If your loan has a redraw facility, when you make payments to your loan ahead of the contracted repayments, then this extra amount:

(1)  reduces the balance owing on the loan

(2)  appears as ‘available’ for redraw, meaning that you may be able to withdraw these funds from the loan

Ways to structure you home loan and what it all means?

Principal and Interest - The principal and interest payment on a mortgage is probably the main component of your monthly mortgage payment. The principal is the amount you borrowed and have to pay back, and interest is what the lender charges for lending you the money.

Interest Only - With interest only loans, borrowers will pay down just the interest portion along with any associated fees for a fixed amount of time (usually no more than five years). Since your repayments won’t go towards paying off the principal, it will remain the same unless you choose to make extra repayments. 

Variable Rate - A variable rate home loan is exactly what it sounds like: a home loan on which the interest rate can fluctuate, varying up and down at any time. Changes up or down in a variable interest rate are based on factors such as the RBA cash rate, changes in market interest rates, or business decisions made by your lender

Fixed Rate - Is a home loan with the option to lock in (or ‘fix’) your interest rate for a set period of time (usually between one and five years). One of the main advantages of this is cash-flow certainty. By knowing exactly what your repayments will be you’ll be able to plan ahead and budget for the future.

However with most lenders you cannot use an OFFSET account against a fixed rate loan.

There are only a couple of lenders that offer fixed rate home loans with 100% offset accounts.

Most fixed rate loans do not let you use an offset account.

An offset account is a transaction or everyday banking account that is linked to your mortgage. Every dollar you have in that account 'offsets' the balance of your loan – reducing the amount of interest you pay every month.

3 ways to get the most out of your offset account

1) Put any savings straight into your offset account

2) Deposit your salary into your offset account

3) Credit card payments and your offset

The more money you can keep in your offset, and the longer you keep it there, the more you will save.

If you are really disciplined, you could use a credit card to defer everyday expenses by being clever with the interest free payment period.

Meet our Co-Founder Felicity Thomas

Felicity is a Senior Private Wealth Adviser at Shaw and Partners and has been providing financial and investment advice for over 9 years.

Felicity is known for being a problem solver. She explores all possible strategies to ensure her clients achieve their financial goals.

She is a long term investor and likes to discover and invest in innovative companies that are usually before their time.

An example of this is her first investment in a company called Galaxy 🌌 Resources (ASX: GXY) a global lithium company

She invested in this before Electric Vehicles became the hot 🔥 investment play

Galaxy is up more than 400% since her initial investment however it hasn’t been a straight line up - there has been a fair bit of volatility along the way.

She has a funny story to go with it and a lesson learnt!

When we asked her for her key lessons when it came to investing in the share market she said

“Invest in companies that you understand, that you believe in and that are solving a problem…that way when there is a downturn (which there inevitably will be) you won’t panic and sell. Patience is a virtue - like Mr Buffet said…the stock market is a device for transferring money from the impatient to the patient”

With interest rates at all time lows you need to start considering alternative asset classes to growth your wealth.

Think equities are too risky?

There is a large breadth of asset classes to consider its not just equities / property and cash

Ps - An asset class is a group of similar investment vehicles

Contact us email 📧 [email protected] to learn more

Meet our Co-Founder Candice Bourke

Candice is a Senior Investment Adviser at Shaw and Partners and has over 6 years experience providing financial and investment advice to her Private Wealth Clients.

Candice is known for being business minded and opened her first business at 17, and has been an active share investor since her teenage years.

🍎 Her first share parcel purchase was Apple which has proven to be a solid long-term investment having grown 445% 🍏

When we asked her what are some of the key lessons for investing in the share market, here is what she had to say:

“There are no set rules when it comes to investing, but rather it’s all about having an investment portfolio that reflects your goals, objectives, risk tolerance and preferences as an individual. When you buy listed shares on the market, I prefer to think about it as buying a stake into quality businesses which I want to hold onto for a very long time.

For me the best investment is one you wish to never sell”.

Solar 🌞

The solar energy market is accelerating. According to the National Renewable Energy Laboratory, the industry will add 10 gigawatts (GW) of new solar capacity annually through 2022. That should increase to an average of 18 to 20 GW per year in the 2023-2030 timeframe.

Powering that surge is a dramatic decline in costs. Amazingly, solar is on track to be the lowest-cost source of bulk power in the coming years.

Here's some solar stocks that shine brightly in this rapidly expanding industry

☀️ MPower Group (ASX:MPR) This company distributes power solutions including solar farms and battery energy storage systems.

☀️ First Solar (NASDAQ: FSLR) Manufactures thin-film solar panels

☀️Brookfield Renewable (NYSE: BEP) Operates solar-energy-generating facilities, wind farms, and hydroelectric power plants

☀️ SolarEdge Technologies (NASDAQ: SEDG) Manufactures power optimizers for solar panels

💦 Hydrogen 💦 is the most abundant of all the natural world elements which is fast becoming the preferred clean energy source. And yet, its still a relatively new investment concept within the energy space.

With a global market worth more than US$100 billion, hydrogen is widely used as an industrial chemical – mainly within the petroleum industry, for the production of ammonia which is mostly used for fertilisers.

⬜️ Industrial hydrogen is mainly produced from natural gas, which generates significant carbon emissions – that kind are known as “grey” hydrogen.

🟦 A cleaner version is “blue” hydrogen, for which the carbon emissions are captured and stored, or reused.

🟩 The cleanest kind is referred to as “green” hydrogen, which is produced from electrolysis of water, powered by renewable energy sources, without producing carbon emissions. This is the type of hydrogen that is being talked-about as the clean energy source of the future

Here are a few ASX-listed companies involved in the hydrogen push.
 
✔️Fortescue Metals Group - FMG:ASX
✔️Hazer Group - HZR:ASX
✔️Hexagon Energy Materials - HXG:ASX
✔️Leigh Creek Energy - LCK:ASX
✔️Pure Hydrogen - PH2:ASX

Check out our latest blog for more insights into the hydrogen energy space.

Electric Vehicles 🚗

The heyday of gas-powered vehicles is winding down.

America’s largest car market, California, plans to ban the sales of new combustion engine vehicles by 2035! To add to this, General Motors announced earlier this year they will only market and sell zero-emission vehicles by 2035.

Leading the EV revolution, Electric vehicle manufacturer Tesla is dramatically expanding its global capacity and made over 500,000 cars in 2020 alone, a task Elon Musk was criticised by many given it seemed impossible just a few years ago.

Here are a few ways you can invest into the EV growing market:

▫️Blink Charging Co (BLNK) - operates the largest public charging network in the U.S. and has stations in airports and hotels.

▫️Plug Power (PLUG) manufactures hydrogen fuel cells for equipment and electric vehicles.

▫️Tesla (TSLA) manufactures electric vehicles

▫️QuantumScape (QS) manufactures electric car lithium batteries

▫️ Hyliion (HYLN) manufacturer of electric vehicle drivetrains

Rare earth elements are a vital ingredient in certain clean energy products, including the magnets used in EVS.

☑️ Medallion Resources (MLLOF)
☑️ Lynas Rare Earths (LYC)
☑️ MP Materials Corp (MP)

Women to Watch 👀

To finish off this series we wanted to highlight the Founder of

Not only does she run one of the most successful platforms teaching Women to take control of their financial future but she’s also a big advocate of women supporting women and has opened up alot of doors for our Co-Founders Felicity and Candice

Molly is mixing things up and is a woman to watch!

We support 🖤

We believe everyone women deserves her financial freedom!

Women to Watch 👀

Flying Fox co-founders Rachael Neumann & Kylie Frazer are renowned Angel Investors.

What is Flying Fox Ventures? A New Venture Capital Syndicate where Rachael and Kylie will invest alongside the angel pool.

They plan to use a ‘rolling fund’ model for Flying Fox deploying up to $5m annually which investors can buy into, giving them exposure to 10 different investments that are vetted by the team.

The fund will help to educate investors with “open source due diligence” letting first time investors to experienced angels see behind the curtain of successful deals.

These are high risk high reward investments but definitely a fund to watch

Venture capital, what is it & how it is shaping the world today. 💡

🪴Venture capital fills the void between innovation and a source of funds. The foundations of VC is that an investor can contribute to a company’s balance sheet and infrastructure until it reaches a sufficient size and level of credibility so that it can be sold to a corporation or so that the institutional public-equity markets can step in and provide liquidity.

💡In essence, the venture capitalist buys a stake in an entrepreneur’s idea, nurtures it for a short period of time, and then exits with the help of an investment banker.

✏️What are the features …
* High Risk
* They have a lack of Liquidity… your money is locked in!
* Long term horizon
* Equity participation and capital gains
* Venture capital investments are made in innovative projects
* Suppliers of venture capital participate in the management of the company

✍🏼And an example …Google Inc
Google Inc is a Google division which invests in Google Ventures, they have a management team who allocate initial investments of up to
$100 million to pitchers who have ideas. Google says, in teeming with good ideas they can support startups and possibly buy and incorporate them into the google platform.

The rise of sustainable investing 🌿

👥The amount of investors choosing sustainability is increasing with European SI assets expected to reach between $7.5 trn and $10 trn by 2025. What is driving this growth?📚
- Growing investor demand
- A growth in flows of sustainable options
- Societal changes accelerated by Covid-19

What are examples of SI objectives 📥
- Climate change mitigation
- Climate change adaption
- Sustainable use and protection of water and marine resources
- Transition to a circular economy, waste prevention and recycling
- Protection of healthy ecosystems

🪵Sustainable investing seeks to align investment decisions with the investor’s social and environmental values, while still generating long-term returns. Earning a profit is typically one of the top priorities for investors, but with sustainable investing, profit isn’t the only goal. Creating an impact is equally, if not more, important. How can you engage in sustainable investing?
- Sustainable investment funds
- Sustainable ETFs such as the following :
BetaShares Global Sustainability Leaders ETF (ASX : ETHI)
BetaShares Climate Change Innovation ETF (ASX: ERTH)
VANECK VECTORS GLOBAL CLEAN ENERGY ETF (ASX : CLN)

👉🏽Message us and get in touch with an expert to determine how you engage in the future of sustainable investing. 📨

Investing strategies Part 1 : Double Cost Averaging 💲

Are you an investor with a lower risk tolerance? This is a perfect strategy for you.👨🏼‍💻

➡️What is double cost averaging (DCA) : A practice wherein an investor allocates a set amount of money at regular intervals, usually shorter than a year (monthly or quarterly).

DCA is generally used for more volatile investments such as stocks or mutual funds, rather than for bonds or CDs.

This is a good strategy as it enables investors who have a lump sum to invest to reduce their timing risk as through investing incrementally into the market you reduce your risk of single market movement effects.
The effect of market movements spread across your investment overtime. 🌐

Lets see this strategy in practice. Swipe Left… 👆🏼
For example, suppose that as part of a DCA plan you invest $1,000 each month for 6 months into ZIP Pay (ZIP.AX). ➡️The prices at each months end have been $10.40, $7.38, $8.06, $7.04, $7.15 and $7.28. With this strategy your average cost would be $7.88. If you had invested the whole amount at the start of the investment your cost would have been $10.40 per share. And you would be $3.12 out of the money … In a DCA plan, you can avoid the timing risk and enjoy the low-cost benefits of this strategy by spreading out your investment. 👏

Portfolio diversification – EQUITY 🌳

Whenever an investment thematic becomes fashionable a torrent of cash often will flow into the sector.💶

Having overexposure to certain equity industries can lead investors to being overexposed to certain sectors within the economy and be at risk of bubbles emerging within these sectors.💡
Investing in several stocks from a variety of industries is an effective investment diversification strategy. Although it may be tempting to be allured by tech giants if tech for example takes a hit due to an economic slow down or imposition of new government regulation your portfolio is exposed to potential losses.🧯

How do you diversify your equity holdings? 🧑🏽‍🌾
It could be useful to split your portfolio across the following sectors or invest in EFTs which move with their affiliated index :
❌ UTILITIES
❌ CONSUMER STAPLES
❌ HEALTH CARE
❌ COMMUNICATION SERVICES
❌ CONSUMER DISCRETIONARY
❌ ENERGY
❌ INFORMATION TECHNOLOGY
❌ INDUSTRIALS
❌ MATERIALS
❌ FINANCIALS

During volatile markets, being mindful of a portfolio’s sector allocation may help manage risk while being positioned to potentially benefit from market trends.

However :
Past performance doesn’t always guarantee future results and there are risks investing in Consumer discretionary, onsumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Telecommunications and Utilities stocks.
Now the stock picking …. Seek advice from one of our experts who can help you allocate to these sectors accordingly.

It’s the weekend but you’re portfolio never sleeps!

👥Both equity and fixed-income products are financial instruments that can help investors achieve their financial goals. Equity investments generally consist of stocks or stock funds, while fixed income securities generally consist of corporate or government bonds.
 
📚Equity and fixed-income products have their respective risk-and-return profiles. When you are developing your portfolio it is optimal to choose a mix of both asset classes in order to achieve the desired risk-and-return combination for their portfolios.
 
What is equity and what is fixed income? 🔖
We have assessed the characteristics, risks and returns of fixed income stay tuned for our post on equity….
 
📝But why is a diversified portfolio the optimal investing strategy?

Diversification strives to smooth out unsystematic risk events in a portfolio, so the positive performance of some investments neutralizes the negative performance of others. The benefits of diversification hold only if the securities in the portfolio are not perfectly correlated—that is, they respond differently, often in opposing ways, to market influences. Including both fixed income and equities in your portfolio is a strategic way in which you can gain exposure to assets which are not correlated…. And therefore reduce the likelihood of significant losses in economic events.

Fixed income is a category of investments where an investor is lending money to the issuer and receives a fixed interest payment periodically until the investment matures. At maturity, the original principal amount is returned to the investor.
The types & their origination :
👨🏾‍⚖️Bonds issued by the government are referred to Treasury bonds. These bonds are backed by the full faith and credit of the government. The money these governments receive through the sale of their bonds is used for public works or service projects such as roads and bridges, schools, water and sewer, or economic development.
🌐Corporations also issue bonds to finance capital expansion, stock buybacks, or acquisitions. Being in the private sector, they have more flexibility in the type of bonds or fixed income investments they issue.
Interestingly, The markets for fixed income securities is 4x larger than that of equity securities.

🔍Like all investments there are risks to consider..
✏️Interest rate risk
When interest rates rise, bond prices fall, meaning the bonds you hold lose value.
✏️Inflation risk
When the rate of inflation outpaces the rate of return on your fixed income asset you as an investor loose purchasing power.
✏️Credit risk
If you invest in corporate bonds, you take on credit risk in addition to interest rate risk. Credit risk (also known as business risk or financial risk) is the possibility that an issuer could default on its debt obligation. If this happens, the investor may not receive the full value of their principal investment.
✏️Liquidity risk
Liquidity risk is the chance that an investor might want to sell a fixed income asset, but they’re unable to find a buyer.


📝The most common form of fixed income is BONDS. For individuals you could consider gaining exposure to fixed income assets via investing in managed funds and ETFs. Get in contact with us now to learn more on this asset class.🔖

🔱If you’re considering making additional contributions to your superannuation (outside the compulsory superannuation guarantee payments your employer makes) It is important to consider the following ...📝

Lets begin with the pros :✅

You are entering into a tax-advantaged savings environment ✏️

Concessional contributions, plus any earnings within your super fund, are taxed at a maximum of 15%, provided your contributions remain within the contribution limits discussed earlier.
If you’re receiving a pension through your super, those earnings are normally tax-free.

Income savings✏️
Reducing your taxable income, for example by salary sacrificing into your super, can often result in a lower taxation rate
The power of compounding✏️
Super is forced savings and allows you to take advantage of compound interest -
Compound interest is interest paid on an initial amount of money you borrow or invest, plus the accumulated interest. Therefore you earn interest on the money you deposit, and on the interest you have already earned.

And the cons :❌

You have limited access to your funds✏️
Your super is a compulsory savings scheme, so you generally can’t make a withdrawal unless you meet a condition of release, such as reaching age 65.
There are potential tax implications✏️
It is important to understand the contribution caps, as exceeding them could result in having to pay extra tax.
There is always risk – the potential volatility

📍While superannuation funds tend to produce long-term returns that are much higher than those of other investment vehicles such as savings accounts and term deposits, they are generally subject to more volatility
For example during 2020 some pension funds returned negative quarterly results – it is important to consider your risk appetite and understand that the market will fluctuate.


Contact us now to see if these are applicable to you! 🖤

Part 2 – The types of contributions and their application 👆🏼
 
🧑🏽‍🔧 Your superannuation contributions are designed to enable you to grow your wealth in preparation for retirement.
 
✏️These contributions can be done in number of ways with either your pre-tax or after-tax income.
 
There are different caps which apply to how much you can contribute in addition to the compulsory contributions from your employer. 📥The ways in which you can contribute are as follows :

* Concessional (pre-tax) super contributions
Salary sacrificing – you may be able to salary sacrifice some of your pre-tax income to grow your super. Speak with your employer to find out if it offers this.
Voluntary contributions you make from your after-tax income and claim as a tax deduction.
 
* Non-concessional (after-tax) super contributions
Voluntary contributions you make from your after-tax income that you don’t claim a tax deduction for.
Spouse super contributions that you receive from your partner
 
* Other types of super contributions
Contributions from the Federal Government, as part of its co-contribution scheme.
Rollovers – i.e. transfers of money from one super fund to another (such as when consolidating superannuation). & many more…
 
If you are unsure if these contribution schemes are relevant to your financial situation please get in contact with one of our expert advisers via direct message. We are here to help you.