Latest News from Newealth

27 Jun 2019

Warren Buffett, The Oracle of Omaha: “Figure out what works and do it.”

In only a matter of days we will come to the end of another financial year.

Whether you had a good, bad or indifferent year will no longer matter because a brand new financial year will reset and 30 June 2019 will never return again.

Figure out what works and do it” is a key secret to success for Warren Buffett and Charlie Munger and given that a brand new financial year begins on Monday we thought it would help you all plan your next 12 months.

Enjoy the read and look forward to seeing you next financial year.

Click to read.

 

My Superannuation
25 Jun 2019

Superannuation Reform: New rules on Concessional Contributions

A concessional contribution is made when money is contributed into superannuation and a tax deduction is claimed for that contribution and it can come either from the client and or the employer.

It does attract a 15% contributions tax however it can help with reducing taxable income.

From 1 July 2019 clients can carry forward any unused concessional contributions cap amounts that accrue from 1 July 2018 onwards for up to 5 financial years provided that the clients total superannuation balance is below $500,000 at the previous 30 June.

That means that from Monday next week a client will be able to add the unused concessional contributions cap from the financial year ending 30 June 2019 to the $25,000 concessional contribution cap for financial year ending 30 June 2020 provided that the clients total superannuation balance is below $500,000 as at 30 June 2019.

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.

 

20 Jun 2019

Interest Rates: Cash is King

It is true, cash is King but only in a financial crisis.

Term deposit rates, online saver rates, bonus saver rates are all in the process of collapsing.

The problem, there is no true substitute for cash.

You can certainly switch into fixed interest securities such treasury bills, bonds, notes, hybrids, high yield, credit and more but this will introduce risk and the potential for actual capital loss.

If you need options, please call.

Click for chart.

 

13 Jun 2019

Vehicle Industry: New Car Sales

In the calendar year ending 31 December 2017 a record 1,189,116 new vehicles we sold in Australia according to VFACTS which aggregates retail sales figures for the Federal Chamber of Automotive Industries.

The new vehicle sales numbers however have been falling month on month since August 2018.

If you compare May 2019 with May 2018 there have been 8,193 fewer new vehicle sales for the month or a 8.1% reduction Australia wide which is significant.

Click for chart.

So what’s the cause? Is it the fall in residential house prices, the tighter lending criteria by the banks, the existing high household indebtedness or the proliferation of ride sharing services? What?

Probably all of it is impacting.

Economic conditions are definitely shifting with the biggest household purchase (primary residence) and the second household biggest purchase (vehicle) having both reduced in sales volume.

The key for investors with all of this market noise is to remain invested according to your appetite for volatility and then, when fear and panic take hold during the next financial catastrophe, to take advantage by buying more quality assets at discounted prices.

 

4 Jun 2019

Welfare: Lateral Thinking

Welfare which is also referred to as Social Security is defined as a statutory procedure or social effort to promote the basic physical and material well-being of people in need.

So what are your thoughts on this as a solution to homelessness?

Give people homes as soon as they need them.

Finland is doing this and is the only country in the European Union where homelessness is falling.

This radical idea has used lateral thinking to materially solve a previously unsolvable social challenge. Just think about what else could be solved by applying more of this type of lateral thinking which is all about prevention rather than cure.

Click to read.

 

30 May 2019

Interest Rates: US Yield Curve

The normal is for long term interest rates to be higher than short term interest rates.

The concern is when the yield curve becomes inverted (short term interest rate are higher than long term interest rates) because in the past this has marked the beginning of an economic downturn.

Today the US 3 month Treasury Bill Rate is 2.37% and the US 10 year US Treasury Bond Rate is 2.25%.

The yield curve has been inverted since Monday, 13th May 2019 and historically the inversion has pointed to the start of the next US recession but the research shows that this is not always the case.

Click for chart.

The key for investors with all of this market noise is to remain invested according to your appetite for volatility and then, when fear and panic take hold during the next financial catastrophe, to take advantage by buying more quality assets at discounted prices.

 

28 May 2019

Technical Paper: Changes to insurance in Superannuation

We have been getting questions about losing insurance cover attached to a superannuation account which is classified as inactive.

Yes this will happen and will be effective from 1 July 2019.

The legislation requires superannuation members to either opt-in to hold insurance in a superannuation account classified as inactive or to make ongoing contributions/rollovers.

We have attached a technical paper detailing the change and if you have questions or need help please call or email us directly.

Click to read.

 

22 May 2019

Warren Buffett, The Oracle of Omaha

Gold is a store of wealth.

This is undisputed and has been the case for millennia and is the case today.

However the problem with investing in gold is that it does not multiply. A bar of gold does not produce gold ingots, in fact it literally makes nothing and costs the investor money to securely store the gold against theft.

This latest video on gold is all about how billionaires are investing in gold as a defense asset for the next financial catastrophe.

Click to watch.

Now before everyone suffers a bout of gold fever we pulled this out of the archive from Warren Buffett’s playbook as a reminder about why business enterprise has been and will continue to be the best performing asset class over the long term.

It is just so simple when you focus on buying quality assets at reasonable or better still discounted prices.

Click to read.

 

20 May 2019

European Union: Divorce

The euro was officially launched on 1st January 1999 and then after three years of working with the euro as ‘book money’ alongside member national currencies, euro coins and euro banknotes were launched on 1st January 2002.

Originally, the 12 member countries comprising the European Union are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

Today, the European Union comprises 19 nation economies and the question being asked is will the European Union fall apart?

The European Union is a currency union but not a fiscal union. Not having a European Union government with tax and spending authority has resulted in large sovereign debts and a big divergence between the northern member countries and the southern member countries.

Attached is a chart with some of the World’s best and worst performers in terms of Gross Domestic Product (GDP) and shows that Greece has fallen behind Sudan and Ukraine in terms of GDP growth. Italy and Cyprus have been outgrown by Iran and Brazil while Spain and Portugal have been outgrown by the United Kingdom.

Click for chart.

The European Union has shackled together 19 national economies but what is the benefit for the losing members who cannot devalue their currency to become more globally competitive?

A fiscal union must become a reality for the European Union or there will be divorce.

The key for investors with all of this is to remain invested according to your appetite for volatility and when fear and panic take hold during the next financial catastrophe, to take advantage by buying more quality assets at discounted prices.

 

16 May 2019

Up to a 50% guaranteed return: Superannuation Co-contribution for 30 June 2019

The Federal Government Co-contribution was introduced from 1 July 2003 as an initiative to encourage low to middle income earners to save for their retirement within superannuation.

If you make a contribution of up to $1,000 into your superannuation account before 30 June 2019, the Federal Government will add an additional sum provided that you are earning less than $52,697 this financial year. Conditions apply.

The table below shows you how much the Federal Government will contribute for various amounts.

If your total
annual
income is:

…and you make
personal contributions of:

…then the maximum Government
co-contribution is:

$37,697 or less

$1,000

$500

$40,697

$800

$400

$43,697

$600

$300

$46,697

$400

$200

$49,697

$200

$100

$52,697 or more

$0

$0

 

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.

 

 

 

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