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

<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>.

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

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

How to downsize without leaving the suburb you love

If you find yourself rattling around in a home that now has too many rooms to clean, and you’d prefer to spend more time doing things you love rather than household chores, it might be time to downsize. Not only can downsizing your property simplify your lifestyle, it has the potential to free up some funds as well. If you manage your ‘empty nester’ status well, it can become a profitable nest egg! But downsizing to a smaller home can be a daunting process. You may not be ready for the close proximity of a retirement village, nor are you keen to leave the neighbourhood you love. You have great neighbours, you’re close to family, and you have all the amenities you want nearby, but your house just doesn’t suit your lifestyle anymore. So, what are your options? There are in fact a couple of great alternatives to packing up and leaving everything you’ve known behind: building a dual occupancy home or a knockdown rebuild on your existing block of land. What is a dual occupancy development? A dual occupancy home design, also known as a ‘duplex’ or ‘multi-dwelling’, can come in a variety of layouts: either two attached dwellings side by side, where both properties have street frontage, or one behind the other, where there’s a driveway down one side of the property. A dual occupancy home is a great consideration for those who: <ul> <li>Want to remain in the same area but don’t need as big a house.</li> <li>Want a low maintenance lifestyle.</li> <li>Have a large block in an area where land prices are increasing.</li> <li>Want to realise some of the equity in the land.</li> <li>Want to create an ongoing income stream through an investment property.</li> </ul> Unlocking wealth with a dual occupancy home design The Australian property boom has made many people many millions. But the fact is that the wealth lies in the land not in the dwellings themselves. Many people who have owned a slice of the Aussie Dream for more than 10-15 years are sitting on potential gold, however all their equity is tied up in the land beneath their house. For empty nesters that are ready to downsize, this offers enormous opportunity. It’s no surprise that dual occupancy house designs are increasing in popularity. There are a number of ways you can capitalise on this opportunity: <ul> <li>Live in one house and sell the other.</li> <li>Live in one house, then rent the other one. This provides a potential income stream and is particularly great if your property is in an area where rental supply is low.</li> <li>Sell both houses and live somewhere else. This option works well in areas where housing stock is low and demand is high – and when you’re prepared to find somewhere else to live!</li> </ul> There are some design limitations when it comes to building a dual occupancy home due to the somewhat restricted footprint, and a number of things to consider such as the size of your block, street frontage, driveways and council approvals. Thankfully however, experienced homebuilders such as Metricon have the expertise and know-how to provide you the guidance you need to make the most of your asset. Knockdown rebuild – build a brand-new home, wherever suits your lifestyle “Don’t move your life, improve your life!” is a fitting motto for those looking to take advantage of their great location by building a more suitable home for their life stage. If you really love where you live but your home just isn’t right for you any more, then there are two likely options: a renovation or a knockdown rebuild. A knockdown rebuild is especially a great option when you are looking to downsize – such as replacing your double storey home with a more suitable single storey option. Perhaps you are weighing up the option of moving but also hoping to build new. Let’s explore your options. To renovate or rebuild? Before jumping on the renovation bandwagon, assuming it is an easier option, there are a few factors to consider that may ultimately influence your decision. These can include: the extent of your renovation, the comparable costs between renovating and rebuilding, and the expected increase in value of your property. Other factors such as the condition of your home (some old homes can’t cope with structural changes), and ongoing expense (a new home is typically cheaper to maintain than an older home), may preclude you from renovating. Renovating can often result in unforeseen cost blowouts and uncover previously hidden or undiscovered faults. There’s also the hassle of shifting furniture, isolating rooms, living in only part of your home or moving out completely during the renovation. A knockdown rebuild however, may be easier and deliver a more satisfying result than you think: a brand-new home where everything is clean and reliable, in a floorplan that matches your desired lifestyle perfectly. Re-locating and building new If you’re looking for a complete lifestyle change when downsizing, perhaps weighing up the options of a sea or tree change, you can have the best of both worlds and build your dream home to perfectly suit your new location. Images: Getty

Downsizing

How to make the most of your hard-earned savings

When you have a lump sum of money, it can often be very confusing to know what to do with it, when putting it into a bank offers little in the way of interest or reward. Chances are you might have been neglecting your savings, leaving them languishing in accounts that pay very little, if anything at all. But there is a better option that could see you drastically increasing your savings. A term deposit taker, such as boutique investment company Blue Sky money, can offer you far greater returns on your deposit – an impressive 7 per cent, around twice that which banks offer. Better yet, with all profits staying within and benefiting the community, you can also enjoy the knowledge that you’re helping to make a difference to New Zealanders while growing your nest egg. <a href="https://blueskymoney.co.nz/" target="_blank" rel="noopener"><img src="https://oversixtydev.blob.core.windows.net/media/2022/12/Blue-Sky-7.jpg" alt="" width="1280" height="1062" /></a> Set and forget Most of us are far too busy and time-poor to spend too much time tending to our finances. But that doesn’t mean we don’t want to see them grow! At Blue Sky money, with a minimum deposit of $30,000 and a minimum 12-month fixed term, you don’t need to think about anything. You’ll have your own personal customer service agent, and can just sit back and watch as your interest is calculated and paid into your account monthly – no fees, no charges. Believing that looking after your finances should be a pleasure, not a chore, Blue Sky money prides itself on offering a superior service and being far more user friendly than banks, so not only will your money work harder, but you’ll enjoy the satisfaction of feeling part of a financial family that truly cares about your wellbeing. Blue Sky money can also assist with small to medium loans for land, houses or other assets, are on hand to help with reverse mortgages and are even investing in retirement villages. And in an exciting new addition, from 2023 Blue Sky is launching its own travel club for all those who place their deposits. You’ll receive special deals and tour packages, ensuring your money goes even further, while enjoying everything the world has to offer. <img src="https://oversixtydev.blob.core.windows.net/media/2022/12/money-laptop-happy-GettyImages-1307391886.jpg" alt="" width="1280" height="720" /> Improving New Zealanders’ lives And while getting some much-needed extra cash seems like a pretty good deal all on its own, you’ll also have the piece of mind of knowing that with Blue Sky money – a family run business owned by Blue Sky charity, which is registered in New Zealand – all profits stay within New Zealand. With a philosophy of trying to make the world a better place, Blue Sky invests in research and development to better New Zealanders lives – everything from groundbreaking cancer treatment using ultrasound, to sustainable energy, sea trailers and indestructible home builds. Blue Sky money can also assist with small to medium loans for land, houses or other assets, and are available to help with reverse mortgages. And in an exciting new addition, from 2023 Blue Sky is launching its own travel club, where you can receive special deals and tour packages. So if you’re looking to make your savings work harder for you, while aligning yourself with a humanitarian company that’s working to improve the lives of New Zealanders, be sure to get in touch with the Blue Sky team at <a href="https://blueskymoney.co.nz/" target="_blank" rel="noopener">blueskymoney.co.nz</a> <img src="https://oversixtydev.blob.core.windows.net/media/2022/12/tropical-island-GettyImages-1360554439.jpg" alt="" width="1280" height="720" /> Images: Supplied. This is a sponsored article produced in partnership with <a href="https://blueskymoney.co.nz/" target="_blank" rel="noopener">Blue Sky money</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

Will you be able to afford to retire?

It was once likely that you’d die before retiring; it’s now highly probable that there will be a gap of several (or even many) years between when you permanently leave the workforce and when you die. How are you going to survive when you’re no longer willing or able to swap your time for money? A friend recently remarked to me that his work made him feel like a consumable part in a big machine. That sounds brutal, but there is a truth in it, and a revelation that we have to use our productive time to set ourselves up for life after we’ve ‘worn out’. So how do you plan to survive once you’ve retired? Here are four possible sources of income to pay your lifestyle expenses: Welfare The age pension is a subsistence payment that’s barely enough to survive on. It isn’t an option you’ll want to rely upon solely in your retirement years. Even when used as a supplement to other income, the age pension is still welfare—it’s not an entitlement nor a return of taxes paid. And don’t forget, the age pension is only available to those with insufficient income or assets to look after themselves. Any financial plan that causes you to rely on a subsistence payment in retirement is surely a poor one, leading to a poor outcome. Compulsory super Do you know that superannuation has a two-fold meaning? The more well-known one is your retirement savings available for survival once you retire. However less well-known is this: a stage in life when you become obsolete for full-time work. The superannuation (aka super) that employers deduct from your pay is sent directly to your nominated superannuation fund. The money invested in superannuation is usually locked away until after retirement and can’t be easily accessed. The profits made are concessionally taxed and reinvested to boost your super balance. A burning question many people wonder is ‘will I have enough super to survive in retirement?’ Sadly, the answer for many is no. The gap might be able to be closed if you qualify for the age pension or draw down on your superannuation balance or other assets, but the reality is more likely that you will have to downsize your living standards to lower your living expenses. Voluntary super What about occasionally topping up your superannuation account voluntarily by making some extra contributions? Well, that may be a good idea if you’re not too far off retirement (10 years or less). However, for others, locking away inaccessible money for decades may result in a severe loss of flexibility, which makes this option quite unattractive. There are also limits on how much can be voluntarily contributed on tax-effective terms. Super sufficient You can, of course, save and invest outside the superannuation regime, in your own name or using an entity such as a company or a trust (e.g. family trust, unit trust). These are non-superannuation assets, and they generate non-superannuation investment income. Such income can be used to pay for your lifestyle expenses at any time, not just after you’ve retired, or better yet, used to purchase other non-superannuation assets or to make voluntary contributions into your superannuation fund. While investing profits outside superannuation may be taxed at higher rates, the money is not locked away until retirement, and so you can use it to fund your financial freedom and avoid having to work until you are at least 60 years old. The ideal goal to aim for is to be what I call ‘super sufficient’ - an outcome where your investment income exceeds your tax and living expenses, so you can live independently without the fear of running out of money because you’ll never have to eat into your capital. So, which option is best? Well, the answer depends on your circumstances, choices and chances. Time is the biggest consideration. The less of it you have, the fewer options are available. If you’re in your 60s or older and don’t have much investment income or capital, then your choices are limited, and you’ll likely have to reign in your living expenses and perhaps rely on the age pension. Younger people need to make the most of the time they have left until retirement, because the longer your investing horizon, the greater your ability to benefit from compounding. Don’t limit yourself to one option; be smart and keep your options open. Consider all the options in some sort of combination: the age pension (to the extent you qualify for it), money inside superannuation (topped up when your circumstances say it is sensible to do so) and wealth outside of superannuation that you can access as needed before you retire. You might be lucky some of the time, but you can’t be lucky all of the time. I’ve found that while luck does have a role to play, investing skill is a far bigger determinant of an investor’s long-term success. If you want to improve your chances, your choices, or your circumstances, then invest inwards by improving your financial knowledge and ability before investing outwards and acquiring investments. Edited extract from Steve McKnight’s Money Magnet: How to Attract and Keep a Fortune that Counts (Wiley $32.95), now available at all leading retailers. Visit www.moneymagnet.au Image: Getty Images

Money & Banking

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

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

Retirement Income

Aussie speedster Steven Bradbury sells luxe apartment

Aussie Olympian Steven Bradbury has sold his beachside investment apartment in Queensland after holding onto it for over a decade. The gold medallist skater listed the four-bedroom ground-floor apartment in the coastal suburb of Kings Beach in Caloundra earlier this year and has gone on to offload the flat for an undisclosed price. After 11 years of owning the apartment, Bradbury initially <a href="https://www.domain.com.au/unit-2-kings-palazzo-4-6-orvieto-terrace-kings-beach-qld-4551-2017750581" target="_blank" rel="noopener">listed</a> the home for $2 million in May before agents Danelle Wiseman and Jonathan Pattinson of Better Homes and Gardens Real Estate revised the price to $1.8 million, per <a href="https://www.smh.com.au/property/news/steven-bradbury-times-his-run-perfectly-with-kings-beach-pad-20220517-p5am5r.html" target="_blank" rel="noopener">The Sydney Morning Herald</a>. Even with the reduction, Bradbury’s potential earnings were more than double the amount his investment company, Pricefinder, paid in 2011. Prior to its sale on August 16, the home was maintained as a weekender and rental with an asking price of $660 a week in rent. Sitting just metres aware from the surf of King’s Beach, the 111-square-metre flat includes plenty of luxe amenities, such as its two courtyards - with one on each floor - timber herringbone hard floors in the living areas, and a large granite waterfall bench in the well-appointed kitchen. The flat also has access to the amenities offered by the Kings Palazzo complex, including a pool and BBQ area shared with just 11 other apartments. Bradbury, a four-time Olympian, shot to fame after his unlikely win at the 2002 Salt Lake City Winter Olympic Games, getting through the semi-final and earning gold in the final after his competitors all crashed in the final seconds. Despite trailing behind them all, Bradbury was able to skate into first place, giving rise to the phrase “doing a Bradbury” for winning as an underdog. Earlier this year, Bradbury took to Instagram to reflect on that fateful win 20 years later. “I’ll always be seen as an overnight success, but it took me many years of sweat, tears and plenty of blood to get there and I’ll always appreciate those who helped me and backed me against the odds,” he <a href="https://www.instagram.com/p/CaBaljsvBl5/?utm_source=ig_web_copy_link" target="_blank" rel="noopener">wrote</a>. “Courage, belief, determination and a little luck, all helped me to be the original #lastmanstanding, and now it’s fantastic to see our next generation of @ausolympicteam legends taking our Winter Olympic Dream into the future!” Images: @stevenbradburyofficial (Instagram) / Better Homes and Gardens Real Estate

Real Estate

7 savvy ways to grow your wealth

You don’t need to start with a fortune to grow wealth – but you do need good foundations on which to build. From where you get investment ideas to how you manage your taxes, it is the little things that add up to quickly grow wealth. Lay the groundwork with these easy-to-implement tips: 1. Start early The longer your investments have to grow, the more wealth you should accumulate. That’s thanks to a combination of value growth over time and the compound effect of reinvesting profits and dividends. So start investing now. Additionally, good habits formed early are more likely to become ingrained. 2. Create a savings and investments plan I hate the word ‘budget’ – it’s the financial equivalent of a diet. A savings and investments plan both sounds nicer and is more encompassing. This plan gives you visibility over your incomings and outgoings, your assets, and liabilities. Then you can determine if debts are being paid down as fast as possible and whether any surplus funds are being invested prudently. 3. Have an emergency fund This might seem counter-intuitive – squirrel money away that you could be used to invest and grow your wealth. But having available cash should disaster unexpectedly strike – such as redundancy, illness, even another pandemic – means you won’t have to sell assets to make ends meet. Forced sales may generate below fair value for a quick result or occur at a low point in the investment cycle. Plus, that asset and its growth potential are gone for good. 4. Reduce your tax bill No one likes paying taxes. Surprisingly, though, many people pay more than they need to. Avoid under-declaring your deductions: good record-keeping will help you claim your rightful deductions, such as for donations, investment expenses, business costs, and even financial advice fees. Embrace legitimate tax breaks: for instance, spousal super contributions and certain investment structures (like family trusts) can be used to cut your income tax or get taxed at a lower rate. Look at the calendar: Which financial year you sell an asset or claim a benefit can affect your tax liability. 5. Invest wisely A gung-ho approach to investing can be a costly mistake, so invest wisely. If something seems too good to be true, it probably is. Only invest what you can afford to lose – while the aim is for investments to grow in value, you shouldn’t be left destitute if things go pear-shaped. Have a clear exit strategy – know when and how you will sell to maximise your returns, keep costs down and minimise your tax on the profits. 6. Get good advice Your father, sister, friend, or hairdresser may mean well, but unless they are qualified to give advice, you could be making a mistake. Money matters are complicated and most people simply don’t know what they need to know. Plus, everyone’s circumstances are different – so what worked for dad, Julie, Tom, or Bev might not be beneficial for you. Just as you want medical advice from a doctor, seek advice about money from those qualified and registered to give it: your financial adviser, tax accountant, estates solicitor, and mortgage or insurance broker. Chances are the cost of that advice is far less than you stand to lose through an avoidable mistake. 7. Invest in you You are an asset that, when in tip top condition, can deliver a solid return on investment. Invest in education and training: gaining extra qualifications and skills allows you to boost your earning potential. Invest in your wellbeing: Good mental health equals wiser decision-making, better productivity, and hence more room to grow your income. Invest in your health: Good health means lower healthcare costs, fewer lost work hours and cheaper life and disability insurances. Not to mention a longer lifespan allows you to enjoy the fruits of your wealth-building efforts! Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at www.onyourowntwofeet.com.au Image: Shutterstock

Money & Banking

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

The economics of ridiculously expensive art

What would possess someone to buy Leonardo da Vinci’s Salvator Mundi for <a href="https://www.nytimes.com/2017/11/15/arts/design/leonardo-da-vinci-salvator-mundi-christies-auction.html">US$450 million</a>? You might think it’s an investment - after all it was previously sold <a href="https://news.artnet.com/market/timeline-salvator-mundi-went-45-to-450-million-59-years-1150661">for just US$10,000</a> in 2005. From an economic point of view, art can be an investment. Although the research shows art investing has mixed results. Art also has what economists refer to as “<a href="https://www.amazon.com/Beyond-Price-Economics-Institute-Political/dp/0521183006">psychic benefits</a>”. It is something to be enjoyed, experienced or flaunted, and this may be the key to the high price paid for Salvator Mundi. <h2>Art as an investment</h2> As an investment, art’s performance varies wildly, depending on a number of factors. For instance, artworks associated with movements that are currently fashionable will outperform other types of art. <a href="https://theconversation.com/au/topics/contemporary-art-1519">Contemporary art</a> is <a href="http://www.artagencypartners.com/market-analysis/impressionist-and-modern-2/">currently outperforming</a> <a href="https://theconversation.com/au/topics/impressionism-29990">impressionist art</a>, for example. The strong demand for contemporary art coupled with limited supply has resulted in some previously overlooked artists, such as <a href="http://www.haring.com/">Keith Haring</a>, being embraced by collectors. But it is typically the works of leading artists that are in hot demand. <a href="https://news.artnet.com/market/25-artists-account-nearly-50-percent-postwar-contemporary-auction-sales-1077026">Recent analysis</a> found that just 25 artists (including <a href="http://basquiat.com/">Jean-Michel Basquiat</a>, <a href="https://www.warhol.org/andy-warhols-life/">Andy Warhol</a> and <a href="https://www.gerhard-richter.com/en/">Gerhard Richter</a>) account for US$1.2 billion of the US$2.7 billion in worldwide art auction sales for contemporary art sold at auction this year. Only two women, <a href="http://www.artnet.com/artists/agnes-martin/">Agnes Martin</a> and <a href="http://yayoi-kusama.jp/">Yayoi Kusama</a>, made it onto the top 25 contemporary artists list. This is indicative of issues around <a href="https://theconversation.com/the-gender-pay-gap-is-wider-in-the-arts-than-in-other-industries-87080">gender representation in the arts</a> and the processes by which artists careers and reputations are established. Academic studies of art as an investment have mixed results. For instance, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=563587">research</a> of the Canadian art market found that the returns are lower than investing in the stock market. However, the study identifies other benefits to having art in your portfolio, such as it being more diversified. But <a href="http://www.emeraldinsight.com/doi/abs/10.1108/10309610810891346">research</a> based on around 35,000 paintings by leading Australian artists show the financial returns average between 4% and 15%. Returns for paintings by leading Australian artists including <a href="http://www.australia.gov.au/about-australia/australian-story/brett-whiteley">Brett Whiteley</a> and <a href="http://www.artnet.com/artists/jeffrey-smart/biography">Jeffrey Smart</a> exceed stock market returns. The study also found that oil and watercolour paintings, as well as those sold by certain auction houses, had higher prices. So-called “masterpieces”, such as those by Leonardo da Vinci, actually <a href="https://www.deepdyve.com/lp/american-economic-association/art-as-an-investment-and-the-underperformance-of-masterpieces-p7UeNVweF6">perform worse</a> financially than the art market as a whole. However, because art also provides benefits through consumption (prestige, decoration etc.), it is different to shares and bonds. The returns may be lower, but art is still attractive to invest in. The Australian art market reflects what has happened in the global market for contemporary art. For instance the five highest priced Australian works sold in 2017 <a href="https://www.aasd.com.au/index.cfm/annual-auction-totals/">account for almost 10%</a> of the total value of all works sold. And while the recent sale of Earth Creation 1 by the late Indigenous artist Emily Kame Kngwarreye has not attracted the attention of the Leonardo sale, its <a href="http://thenewdaily.com.au/entertainment/arts/2017/11/17/emily-kame-kngwarreye-aboriginal-art-record-auction/">price of $A2.1 million</a> is nearly double what it sold for at auction a decade earlier. <h2>Art for consumption</h2> The aesthetic pleasure of art, a feeling of being challenged or inspired, is subjective and <a href="https://www.sciencedirect.com/science/article/pii/B9780444537768000040">difficult to measure</a>. But that doesn’t mean the consumption of art doesn’t add to its value. <a href="https://www.amazon.co.uk/Beyond-Price-Economics-Institute-Political/dp/0521183006">Economists</a> use the terms “psychic returns” or “psychic benefits” to describe the benefits of consuming art. This is broken down into three main areas. One area is the satisfaction of supporting the arts and artists. This motivation is especially important for those who donate their collections to museums or otherwise support the arts. While this motivation is important it is not directly related to auction prices. Then there’s the psychic benefit comes from the “functional” (or decorative) benefits of art that is used to adorn spaces. This is generally the closest to the artists intention when they create the work in the first place. There’s also the prestige that comes from possessing art - especially as it is used to display good taste, wealth and power. For instance, entrances and foyers of offices often display large striking works of modern or contemporary art. This is what <a href="https://www.aeaweb.org/articles?id=10.1257/aer.99.4.1653">economists</a> call “conspicuous consumption”. As people become wealthier, their demand for high-end art increases. Indeed, art has a long tradition of being used as a statement of power, including by the church. What drives the art market, especially at the upper echelons, is a curious mix of investment and consumption, fuelled by a limited supply. The work of famous artists provides a signal of quality and assurance to the market and so their work is coveted by the rich and powerful. The uniqueness and rareness of these pieces not only spurs demand, but restricts supply, creating a perfect storm to drive prices up. Although, even this doesn’t entirely explain the high price paid for Leonardo’s Salvator Mundi. <a href="https://news.artnet.com/market/the-gray-market-salvator-mundi-sale-1117208">Analysis</a> of the sale suggests the market campaign by the auction house was significant in achieving such a high price. But aside from its trade value, art can have cultural value and social significance that do not neatly translate to market prices. So while Leonardo’s Salvator Mundisold for US$450 million, non-tradable masterpieces such as Michaelangelo’s ceiling of the Sistine Chapel aren’t worthless. They’re “<a href="https://www.amazon.com/Beyond-Price-Economics-Institute-Political/dp/0521183006">beyond price</a>”. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/the-economics-of-ridiculously-expensive-art-87668" target="_blank" rel="noopener">The Conversation</a>.

Art

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 $15-16 million ($NZD 15.5-16.5 million) after they reportedly dropped $4.305 ($NZD 4.46) 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 $12.7 ($NZD 13.1) 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

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.co.nz/c/readersdigestemailsubscribe?utm_source=over60&utm_medium=articles&utm_campaign=RDSUB&keycode=WRN93V">here’s our best subscription offer</a>.

Money & Banking

Top 6 tips: How to buy art that will make you money

Just like with any investment, value increases when demand does also – and if a gorgeous piece of art is what you’re looking for, then perhaps consider what could make your art purchase a smart one. There are several tips to think about when buying pricey art that’s a beauty to the eye. 1. Buy art that you truly love Since art is an investment that is long-term, your best bet is to buy work that really catches your eye. Afterall, if it’s not on your wall for years to come, then it’s probably not the wisest purchase. 2. Originals Originals will always be a heftier price to pay but will potentially have higher resale value than a print by the same artist. If an artist releases a print that is in demand but does not have many for sale, then your resale value is likely to increase. 3. First editions If you are thinking of purchasing a limited-edition print, try to get your hands on the first in the edition, or the artist’s or printer’s proof. The first runs are much more sought after. 4. Controversial/political More attention is likely to be given to artwork that has a strong message, has historical significance or is deemed controversial. 5. Notoriety It is a safe investment to purchase work from an artist with a more well-known reputation. However, you will most likely be paying top dollar for their work if they are renowned. 6. Emerging talent Talk to galleries and find out what is really selling and who is getting the attention at art fairs. Keep an eye out for emerging talent and pick up work early in their career so you get the best return in the long run. What are some of your tips to earn an investment in the long run on your art purchases?

Art

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>.

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