Latest News from Newealth

10 Jul 2024

Market Metrics: Gold

Gold is an asset because it represents as store of wealth.

This undisputed fact has been the case for millennia and Gold is also purchased heavily in times of financial fear such as during the past 2 years which has seen a rapid rise in inflation.

For example, the price of one ounce of Gold in October 2022 was US$1,624 and today it is US$2,370 which is a 45.9% increase in 20 months.

However, the problem with investing in this asset is that Gold does not multiply.

A bar of Gold does not produce baby Gold ingots which means an investor can make no money for extended periods such as between late 1970’s and the 2008 Global Financial Crisis (some 30 plus years) during which time an investor did not make a dollar.

Gold investors again made no money between 2011 and 2020 during which the Gold price once again remained below the 2011 purchase price.

Click for charts.

The principles of Value Investing teach us to not invest in commodities, Gold might be shiny but it is just too risky.

WARNING, this does not constitute Personal Advice. To discuss if this is an appropriate strategy for your given circumstances, please do not hesitate to contact us directly.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.


4 Jul 2024

Superannuation: Boomerang Children

A question that we often get asked is in relation to adult child and whether an interdependency exists if they are living at home.

That is a difficult question and we recommend you seek legal advice because the Australian Tax Office view is that an arrangement of commercial convenience does not prove a mutual commitment to a shared life which is needed to evidence an interdependency relationship.

The benefit of an interdependency is that there is no 15% lump sum tax plus 2% Medicare to be paid on the taxable component of the superannuation death benefit.

For example, on a $500,000 superannuation death benefit that could be the difference between paying $85,000 in lump sum tax versus NIL if there is an interdependency relationship.

We have a attached a quick reference guide to who qualifies as a dependent under the Superannuation Industry (supervision) Act 1993.

Click for table.

This is also a timely reminder to keep your superannuation death benefit nominations up to date so that the individuals that you have chosen get the money rather than leaving this to the superannuation trustee to decide.

Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.


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