Articles

Economic Snapshot – FY20 in review

2019/20 was the most dramatic year for financial markets since the GFC. The first half of the year was dominated by concerns of global recession as slower growth in China spilled over into the rest of the world. Central banks cut cash rates even further, which encouraged equity markets to rally into December. The ongoing popularity of tech stocks helped underpin the rally. However, equity market valuations closed 2019 in expensive territory. The emergence of Covid-19 in the New Year turned everything on its head. Lockdowns around the world crushed economic activity and drove equity markets down sharply. Massive central bank stimulus saw cash rates fall to new record lows and vast amounts of liquidity poured into financial markets. On top of this governments announced trillions of dollars of stimulus. Combined with the central bank moves this sparked an equity rally that ran through to the end of June, once...

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A long list of short tips #2

I love long lists of short tips. Here is a piece called These Things, I Wish To Have Known from retinart.net. While this list is written by a designer with designing in mind, the sentiments express are applicable to many parts of our life. I found the following particularly interesting. You won’t have enough time Ever. You’re forever a student If you want to become successful in this industry, do not lose your inquisitive nature or thirst for knowledge. Stop watching TV Nothing to do with design, but something worth doing. Always ask questions It doesn’t mean you’re dumb, it means you want to learn. Don’t promise deadlines If you can get it done by lunch, tell them they’ll have it the end of the day (things come up).

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Tax deductions for working from home

Key takeway points The ATO has introduced the shortcut method for calculating work from home expenses. You can claim 80 cents per hour. Applies from apply from 1 March 2020 to 30 June 2020 (maybe extended). Working from home expenses In the past, working from home may have felt like a fantasy for many people. But now, it is the norm for many parts of the workforce and will stay that way, in some form or another, for quite a while. Now that the novelty of the new situation is wearing off, people are realising there are cost for this arrangement.  There were costs to set up their new home “office” (e.g. desk, chair, computer, monitor) and ongoing costs (e.g. electricity for equipment and air conditioning, phone and internet). You have always been able to claim expenses for working from home, but the existing ATO methods were somewhat...

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The fantasy was never real

More of Leo’s thinking can be found here.

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A long list of short tips #1

I love long lists of short tips.  This is a great one by Kevin Kelly titled 68 Bits of Unsolicited Advice. I found the following particularly interesting: Treating a person to a meal never fails, and is so easy to do. It’s powerful with old friends and a great way to make new friends.  Being able to listen well is a superpower. While listening to someone you love keep asking them “Is there more?”, until there is no more. Rule of 3 in conversation. To get to the real reason, ask a person to go deeper than what they just said. Then again, and once more. The third time’s answer is close to the truth. Be prepared: When you are 90% done any large project (a house, a film, an event, an app) the rest of the myriad details will take a second 90% to complete....

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Economic Snapshot – April 2020

Markets embraced a risk-on mood in April with a strong rally in equities as investors welcomed declining virus infections and reports of possible medical treatments. Support from governments and central banks also helped. However, as the month went on, the economic data and corporate reporting painted a bleaker picture of just how much damage has been done to the world economy. Markets have priced in a lot of good news and now they are starting to see the bad news. Equity markets are looking expensive again after April’s rally, which does not leave much room for them to absorb bad news. The other big development in April was in the oil market. Plagued by massive over-supply as the pandemic has crushed demand for oil, producers are running out of room to store the oil they are pumping out of the ground. On 20 April, the futures price of oil closed...

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Make sure your executors and attorneys can get along!

In estate planning, the most important people are your executors (of your will) and attorneys (as your power of attorney).  As they hold the power to get the things done that really need to be done, it goes without saying you want to make sure they get along! Your will A will is the first step in ensuring the distribution of your estate is actioned in accordance with your wishes. Without a will, upon your death, a court controls the distribution of your estate and the persons to whom your estate is distributed to, which may result in delays in asset distribution. The executor of a will is the legal personal representative of the deceased person, and they are responsible for carrying out the terms of the will and administering the deceased estate. When choosing who to be your executor/s, you can choose a single person, or several people.  If...

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Do Less. Do Better. Know Why.

Cal Newport has long written about the intersection of digital technology and culture, with a focus on doing deep work (which is he refers to as the “ability to concentrate without distraction on a demanding task”), digital minimalism (which should “radically reduce the time you spend online, focusing on a small number of activities chosen because they support things you deeply value”) and Attention Capital Theory (related to the brain’s ability to create new value through sustained attention). The following is taken from a recent article of his. My philosophy for achieving this goal can be reduced to three simple rules: Do fewer things. To “do less” is to slow down. Focus on one activity at a time. Do less total activities. Be willing to pass through occasional interludes of full non-productivity. Do them better. To “do better” is to...

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When can you access your superannuation?

In order to access your superannuation you need to satisfy a condition of release. Once a condition of release is met, your superannuation is classed as having unrestricted non-preserved benefits. Conditions of Release The three main events that are considered conditions of release are when you: reach your preservation age and retire reach your preservation age and choose to begin a transition to retirement income stream while you are still working are 65 years old, even if you have not retired. There are some other special circumstances when you are can also access your superannuation. Please contact us if you wish to find out about these. Preservation Age This is the age at which you can access your super if you are retired or wish to start a transition to retirement income stream.  Your preservation age is based on your date of birth as follows. Please note that...

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Changes to deeming rates on 1 May 2020

New Deeming Rates from 1 May 2020 The Government has announced that the deeming rates drop on 1 May 2020 as follows: Lower tier rate drops from 1% to 0.25% Higher tier rate drops from 3% to 2.25% How income is deemed Deeming is a set of rules used to work out the income created from your financial assets. It assumes these assets earn a set rate of income, no matter what they really earn. Financial assets include such things savings accounts and term deposits, managed investments, listed shares and securities, some income streams (superannuation) and some gifts you make. Centrelink includes your deemed income as income under the income test.  Deeming is not related to the asset test. Working out your deemed income If you are single, the first $51,800 of your financial assets are deemed to earn 0.25%, with anything about this level being deemed to...

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