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Financial goals planning at a table

Even though your finances might be the last thing on your mind in your 20s, having a few financial goals will help lay the foundation for financial security in your 30s.

Of course, your goals will be different depending on your situation, however, these five can act as a place to start.

1.  Know where your money is going

You’ve undoubtedly heard people harping on about making a budget. However, sticking to a budget doesn’t work for everyone. Even so, knowing where your money is going is incredibly important. This will help you understand where you could be spending less money and even where you could be making more money.

This could mean tracking your income and expenses in a spreadsheet or with an app, like Raiz. If you typically use a card to pay for things, these apps can sort your income and expenses into categories automatically. Ignoring your finances can land you in hot water, especially if you start accumulating credit card debt or “buy now pay later” debt such as with Afterpay.

2.  Pay off high-interest debt

Many people have already dipped into high-interest debt, such as having a credit card or personal loan. However, these loans don’t have to be the end of the world. Paying off your debt goes hand in hand with knowing where your money is going. It’s important that you can meet minimum repayments every month, ideally going beyond this amount. Of course, you’ll also want to avoid getting into more debt.

3.  Start investing your money

The thought of investing can be quite daunting, especially when you don’t know where to start. However, using a micro-investing platform such as Raiz makes it easy to invest in a diversified portfolio starting with $5. With Raiz, you don’t have to handpick stocks on your own. Plus, you can decide what level of risk you’re comfortable with. Over many years, you’ll see your money multiply with the power of compound interest and reinvested dividends.

If home ownership or property investment is a priority for you, now may be the time to buy, especially with the Australian market cooling. To comfortably afford repayments on a house in Australia, you’ll need to be making a significant amount. For example, in NSW, your household income would need to be $124,000 a year in order to avoid mortgage stress. You might consider setting an income goal or aim to save for a deposit in your 20s.

4.  Have an emergency fund

Even if you’re not financially independent as of yet, having an emergency fund is always an important safety net to have. Usually, a 3-month emergency fund is enough in the case that you lose your job or decide you need time off work. Once you know what your monthly expenses are, multiply that number by three and aim to have this amount saved.

5.  Take control of your retirement fund

Retirement should be many decades away. However, where your superannuation ends up is important now. Different super funds come with different fees and different historical returns. With compound interest, even a small difference can make you thousands more in the long-term.

After you choose a super fund that’s suitable for you, it’s important to make sure your superannuation is consolidated. Most people will have multiple jobs over their working life and sometimes this leads to having multiple super fund accounts that you’re paying fees for. Having all your money in one place will mean you’ll be making more with compound interest and only be paying one lot of fees.

Final words

For many people in their 20s, this is where you’ll enter your journey into financial independence. This means you’ll be developing habits that you’ll likely take into the rest of your life. Therefore, it’s more important than ever to make sure you’re building strong habits and goals so that you don’t end up having to reverse bad money decisions in your 30s.

Guest author: James Pointon is a Commercial Manager at OpenAgent.com.au, an online agent comparison website helping Australians to sell, buy and own property.

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Spice girls in a row

Regardless of your financial income it is important to address two key factors as a woman living in a world adorned in dollar signs. Resilience and Wellbeing, the balance between the two provide a foundation for a strong financial relationship that is not only flexible in times of hardship but also allows us to enjoy the fruits of that which we have worked so hard to cultivate.

Current statistics recognize that women’s savings are inadequately supporting the needs of older generations. An astonishing 34% of single 60+ year old women are currently living below the poverty line.

The financial story of women is in desperate need of a rewrite and in a way, that challenges us in an exciting and engaging way. How do we turn this story of gloom into one of stability and positive growth? The words Resilience and Wellbeing echo again.

Spending time in the trenches assessing the details when needed, taking authority over one’s own savings and spending with clear and honest understanding. Gone are the days of Prince charming and Fairy God mothers, we are moving into an era of #girlbosses where we are just as interested in the latest fashion trends as we are the intricacies of our own financial security.

Resolve to find your own definition of financial stability. Not your best friends’ idea of stable and secure or the likes of business guru Jo Horgan- Mecca Brands. What are a list of your basic needs to be for filled to allow you to feel grounded and safe? Simple questions like this can and will encourage a new story to grow.

With strength comes stability and with continued awareness we can move with confidence in a financial world. The goal is balance, present when times are tough and presence when we are glowing in the face of financial freedom.

Author: Jessie-Anne is a yin yoga/meditation teacher and writer based in Sydney, Australia. 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

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Click to download the Raiz app

Raiz market and economic update

21/05/2019

From Raiz CEO, George Lucas

AUD tumbles as US-China trade war heats up

This week saw the Australian dollar hit hard by increased risk aversion flowing from the re-escalation in US-China trade tensions. The AUD fell by more than 2 percent against the greenback following the flare up in the long-running trade spat between the two global superpowers.

Meanwhile, the Japanese yen gained over 1 percent against the US dollar. A large fall in the AUD against the yen is generally synonymous with fading risk appetite, particularly in relation to China.

Looking ahead, if the markets are right about policy rate changes in the US and Australia, interest rate differentials would support the AUD against the greenback. Investors are yet to discount three rate cuts expected in the US by end-2020. They have already priced in both rate cuts in Australia.

What’s more, the AUD has this year not been boosted by a higher price of iron ore — a key export that closed last week above $100 a tonne.  If the market prices this into the AUD, we could see a sharp turnaround in the local currency as the terms of trade improve for Australia.

Australian unemployment lifts sharply

On the labour market, monthly jobs data showed the number of people employed in April rose 28,400. However, despite the lift in raw numbers, the unemployment rate climbed to an eight-month high of 5.2 percent due to a jump in the labour force participation rate.

The rising unemployment rate may give the Reserve Bank of Australia an excuse to start cutting interest rates. That’s because while in the past a jobless rate of 5.2 percent would have signalled a strong employment market, I suspect the RBA will at the moment be focused more on the change in the rate, not the actual level.

Malaysia’s economic growth slips in Q1

Turning to Asia, data out Thursday revealed Malaysia’s economy slowed in the first quarter of 2019, with GDP figures showing growth fell from 4.7 percent year-on-year in Q4 to 4.5 percent in Q1. We think that the loss of momentum in Malaysia’s economy has further to run.

Across in Indonesia, the Bank Indonesia (BI), as suspected, left its policy rate at 6.00 per cent. We expect the rate to remain on hold in 2019 provided the rupiah doesn’t slump against the US dollar.

Renminbi slides on fresh US-China tensions

In China, the 2 percent fall in the renminbi against the US dollar since the latest flare-up in US-China trade tensions is significant given the relative stability that came before. The fall in the RMB does not appear to be a deliberate devaluation strategy to offset US tariffs. Indeed, if anything, Chinese policymakers are currently trying to limit the renminbi’s slide.

On the latest evidence, Chinese policymakers still attach considerable importance to the financial stability point, despite the greater tariff threat. Since US President Donald Trump recently suggested more tariffs were imminent, the People’s Bank of China’s daily fixings for the onshore RMB (CNY) have consistently been set stronger than the previous day’s close in the offshore rate (CNH).

Meanwhile, the cost of short-term borrowing in the offshore renminbi market has jumped, which may be a sign that Chinese officials are trying to make it harder to short the currency.

That all suggests that, for now, the RMB is a casualty in the trade war, not a weapon. If talks break down altogether, Chinese policy makers might step back and allow the market to drive the currency down further. But even then, they would probably still shy away from actively driving it lower.

Iron ore tops US $100 for first time in years

In other developments, the price of iron ore rose above US$100 a tonne for the first time in five years on Friday. That was after Vale, the world’s biggest producer of the steelmaking ingredient, warned there was a risk of another dam failure at one of its mines.

The price of iron ore has jumped more than 35 percent, or US$27 a tonne, since the Brazilian dam tragedy in January. Since then, Vale has been forced to shut down 93 million tonnes of iron ore production, which has tightened the market considerably.

At that level, some of the world’s biggest mining companies, including BHP Group and Rio Tinto, will be generating huge free cash flow from their iron ore businesses as the price of Iron ore defies market commentator predictions.

Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

Person building and balancing rocks

Building a positive relationship with your finances is a worthy investment that can both maintain and improve your financial well-being.

These are our four tips to help build a positive relationship with your finances:

Spend what is left after saving

“Do not save what is left after spending, but spend what is left after saving” – Warren Buffett.

When you get your pay check, many people make the mistake of spending first, and then saving what is left over. The problem with this is that it doesn’t guarantee any savings; your savings become dependent on how much you spend each month (and often in a rather unplanned fashion).

A better strategy is to pay yourself first by setting aside a fixed percentage of your income towards saving and investing, and then spending with what is left over.

Automation is your friend here, which can whisk the money straight out of your spending account before you have a chance to spend it. Setting up a recurring deposit to your Raiz account is one way to do this.

Monitor your cash flow

A fancy term for budgeting, managing your cash flow provides answers to how much you are spending, where you are spending, and if you’re on track to reach your financial goals. The ‘My Finance’ feature within the Raiz app is a good tool to start tracking your expenses.

Once you know how much you are spending and where, you can begin to build a basic budget and cut down on unnecessary expenses to maximise your savings. See our post How to: budget in 2019.

 

Build an emergency fund

An emergency fund, or savings safety net, is money set aside to help cover the costs of any urgent or unexpected expenses – something like your car braking down. Having an emergency fund provides you with peace of mind that you can deal with any bumps along the road.

How much money should you put into your emergency fund? It really depends on your own financial situation. Reasons such as having low confidence in your job security or being in poor health can be factors to take into account when considering the size of your fund. Whatever your goal is, the trick to getting started is to start small and save regularly.

 

Utilise the power of compound interest

The power of compound interest enables your money to grow at a faster rate as you accumulate interest on your interest. For example, a 10% return on 100 dollars nets you $10 in the first year, taking your balance to $110. In the second year, this same 10% return now pays you $11 in interest. Over the long-term this compounding effect can significantly boost your savings and investments.

If you invest just $5 a day into an investment account like Raiz, assuming returns of 7%, after 20 years your investment will have grown to be worth $74,817, with a return of $38,317*. The earlier you get started, the more time you have to take advantage of compounding.

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

*Return estimated for the sake of simplicity as past performance is no indication of future performance – see ASICS managed funds fee calculator to get an estimate on how fees and costs can affect your investment. Return estimate is net of MER. The value is a future value, not a present value.

  1. These Participation Terms apply to this Pureprofile Raiz Rewards Promotion along with the Raiz Invest Australia Limited Website Terms of Use (Agreement). These Participation Terms must be read alongside, and form part of the Agreement between you and Raiz Invest Australia Limited (ABN 26 604 402 815), and you must comply with both. Terms capitalised but not defined in these Promotion Terms have the meaning given in the Raiz Invest Australia Limited Website Terms of Use.
  2. The Pureprofile Raiz Rewards Promotion is being offered by the following Third Party Retailer PUREPROFILE AUSTRALIA PTY LIMITED ABN 99 093 819 713 (Third Party Supplier). Details of the Promotion are as follows:
    1. Promotion Term: This Raiz Rewards Promotion runs from 13/05/2019 until 31/12/2025. To be eligible to participate, you must complete a survey between 12:00AM AEST on the Start Date and 11.59PM AEST on the End Date of the Promotion Term. Your eligibility to participate will be determined by reviewing the survey completion (as notified to Raiz Invest). Note that there could be circumstances where the Promotion Term is shortened, extended or otherwise modified. Please see the Agreement for details.
    2. Customer Reward: The Third Party Retailer will contribute an amount of money for investment into your Raiz Invest Account if it is a specified paid survey. Please refer to each individual survey if there is an eligible reward and the amount.
    3. Eligibility:
      1. Reward will only be eligible by clicking on the “START EARNING NOW” link displayed with the Third Party Retailer’s logo on the Raiz Rewards Page of the Raiz App; and
      2. then proceeding to complete a paid survey without clicking any other external links.
    4. Payment of Customer Reward:
      1. Whilst it is intended that Customer Rewards will be paid by the Third-Party Retailer to Raiz on your behalf within approximately 30 days from the date of completing a paid survey, delays may occur (eg public holidays, technical issues or other reasons).
      2. If reward has not been received within 30 days, users must email the customer support team at support@raizinvest.com.au Users must email through within 60 days from completion of survey in order for the reward to still be eligible.

07/05/2019

From Raiz Ceo, George Lucas 

US creates 263,000 jobs in April

Last week saw the release of the latest US employment report, published on Friday. The report was strong, with non-farm payrolls increasing by 263,000 in April, above consensus expectations, while the unemployment rate fell to its lowest level in nearly 50 years.

However, wage inflation was a bit weaker than expected, hours worked edged down, and the unemployment rate only decreased owing to a massive fall in the labour force. That’s probably why yields on Treasury bonds dropped and stock market rallied.

Even so, the report still suggests that the underlying fundamentals of the US economy remain solid. Confirming the data, first-quarter gross domestic product expanded by 3.2 per cent, the US Bureau of Economic Analysis said in its initial read of the economy for Q1.

US Federal Reserve hold interest rates steady

Still in the US, although there was no policy change after the latest Federal Open Market Committee (FOMC) meeting, investors appear to have been caught off guard initially by the reduction in the interest on excess reserves (IOER) rate and subsequently – and more importantly – by Fed Chair Jerome Powell downplaying recent weakness in inflation.

The Fed might be reluctant to cut rates just because of the recent weakness in inflation, particularly given that labour costs could pick up. This is a similar issue that the RBA is facing here in Australia, which will be heightened if Labor wins at the upcoming federal election.

China’s economy loses more momentum

In Asia, China’s onshore stock markets brushed off the pull-back in the country’s PMIs released last week, but the data ultimately supports a view of a slowing Chinese economy.

Chinese equities have surged by more than 30 per cent between the turn of the year and mid-April, driven in part by optimism about earnings. According to Bloomberg, analysts anticipate a 25 per cent jump in corporate earnings in the Shanghai market in the next twelve months, which would require a very strong rebound in the economy.

However, this is not supported by the recent PMI data and the Shanghai and Shenzhen markets have actually started to falter since 19 April. They are down by 6 per cent and 8 per cent, respectively, from their peaks, despite ticking up last Tuesday.

What is also surprising is the lack of reaction to those drops elsewhere. The S&P 500 has risen to a record high, and European and Japanese indices have edged up.

China is large enough that equities there rarely head in the opposite direction to those elsewhere for long. Foreign investors may initially ignore falls in China as signs of a “healthy” correction in a overbought market, but will probably eventually react.

US-China trade talks set to resume

Looking ahead, trade negotiations with China are due to resume in Washington this week, with a deal said to be close. According to reports, key points that remain at issue include how to police any deal, and whether existing tariffs will be removed or stay in place.  However, a war of words between the US President and China have thrown some doubt over whether this meeting will now take place.

This next round to negotiations follows talks last month in Beijing that US Treasury Secretary Steven Mnuchin labelled “productive”.

Important Note: The information on this website is provided for the use of licensed financial advisers only. The information is general advice and does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this website.

Investors only: The information in this Document is confidential it must not be reproduced, distributed or disclosed to any other person unless it is part of their statement of advice. The information may be based on assumptions or market conditions and may change without notice. This may impact the accuracy of the information. In no circumstances is the information in this Document to be used by, or presented to, a person for the purposes of making a decision about a financial product or class of products.

General advice warning: The information contained in this Document is general information only. It has been prepared without taking account any potential investors’ financial situation, objectives or needs and the appropriateness of this information needs to be considered in that context. No responsibility or liability is accepted by Instreet or any third party who has contributed to this Document for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.

  1. These Participation Terms apply to this Dan Murphy’s In-Store Raiz Rewards Promotion along with the Raiz Invest Australia Limited Website Terms of Use (Agreement). These Participation Terms must be read alongside, and form part of the Agreement between you and Raiz Invest Australia Limited (ABN 26 604 402 815), and you must comply with both. Terms capitalised but not defined in these Promotion Terms have the meaning given in the Raiz Invest Australia Limited Website Terms of Use.
  2. The Dan Murphy’s In-Store Raiz Rewards Promotion is being offered by the following Third Party Retailer WOOLWORTHS LTD 88 000 014 675 (Third Party Supplier). Details of the Promotion are as follows:
    1. Promotion Term: This Raiz Rewards Promotion runs from 01/05/2019 until 07/05/2019. To be eligible to participate, you must make an Eligible Purchase between 12:00AM AEST on the Start Date and 11.59PM AEST on the End Date of the Promotion Term. Your eligibility to participate will be determined by reviewing the date of the transaction, as it appears in your relevant card or account statement (as notified to Raiz Invest). The card you link must be one that is already linked as a Spending Account in the Raiz app. Note that there could be circumstances where the Promotion Term is shortened, extended or otherwise modified. Please see the Agreement for details.
    2. Customer Reward: The Third Party Retailer will contribute an amount of money for investment into your Raiz Invest Account equal to 2.8% of the purchase price of Eligible Products of min. $200 (inclusive of GST but not any delivery or Administration fees) or more when paid in full.
    3. Eligible Purchase:
      1. Eligible products: All products, excluding gift cards and tobacco purchased and paid for in full (not including any returned items or cancelled orders).
      2. Participating stores: Eligible Purchase can be made only by:
        1. clicking on the “LINK CARD HERE” link displayed with the Third Party Retailer’s logo on the Raiz Rewards Page of the Raiz App and providing the last 4 digits of the card used; and
        2. then proceeding to make a purchase in a Dan Murphy’s store.
      3. The purchase and purchase amount must be reported to Raiz by The Retailer.

      No other purchases from the Third Party Retailer or the linked site will be considered Eligible Purchases for the purposes of this Raiz Rewards Promotion.

    4. Payment of Customer Reward:
      1. Whilst it is intended that Customer Rewards will be paid by the Third-Party Retailer to Raiz on your behalf within approximately 30 days from the date the Eligible Purchase is processed, delays may occur (eg public holidays, technical issues or other reasons).
      2. The customer reward will not be calculated to include any delivery, handling or administration fees or charges that the Third Party Retailer includes on any Eligible Purchases.
      3. If reward has not been received within 30 days, users must email the customer support team at support@raizinvest.com.au with a copy of the receipt including the date, sale value, order ID and proof of card used (last 4 digits). Users must send this through within 60 days from date of purchase in order for the reward to still be eligible.

Yoga can reduce financial stress

Financial stress is on the rise and has become an inescapable part of our modern society. So how do we tackle the burden of increasing costs and still find an emotional balance and savings for a secure future?

I have witnessed a direct correlation between practicing Yoga and its ability to reduce the fears, attachments and avoidance that shadow our relationship with money. Yoga invites us to move and breath in a conscious way.

Many may have been completely unaware of hamstring tension until they found themselves in a Downward Facing Dog. Our body and breath teach us to engage with things we find uncomfortable. With that awareness money can become a profound teacher.

Taking a look at your credit card or bank statements, or thinking about your upcoming bills can reveal insightful patterns of spending that may also be exacerbating your financial woes.

Facing an unexpected $400  bill can be difficult but if we are able to approach this area of tension as you would your tight hamstrings- breathe, observe, identify the issue and then support yourself accordingly you may find yourself a little less overwhelmed.

Yoga encourages us to view stress as a challenge to be overcome instead of a drama that can crush us.

So, the next time you find yourself in state of financial overwhelm take a mindful breath and give yourself an opportunity to engage in a healthy way to find balance.

Author: Jessie-Anne is a yin yoga/meditation teacher and writer based in Sydney, Australia. 

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Women sitting on steps with a laptopBy Alison Banney from Finder.com.au

Have you considered dabbling in the share market, but there are a few thoughts you can’t get out of your head telling you that you shouldn’t? Maybe you think you don’t have enough money, or perhaps you keep hearing that you’re too young to be investing in shares (shares are for old people, right?).

Well, you’ll be glad to learn that most of these myths surrounding investing are just that – myths. Here are five common misconceptions that you shouldn’t let deter you from getting cracking in the share market.

 1. “I don’t have enough money.”

A lot of people think you can only invest in the share market if you’re loaded. This is far from true, and you can actually start investing in the share market for as little as $5.

Most online share trading brokers require you to invest at least $500 per trade on the Australian Securities Exchange (ASX), which compared to a property deposit, is a really low entry point. But if you use a micro-investment app like Raiz, you can get started with even less.

2. “It can wait until I’m older.”

The thing with investing in the share market is that it’s a long-term play. It’s not a way to get rich overnight. The longer you’re invested, the more opportunity you have for your portfolio to grow in value.

A common expression in the industry is that it’s all about time in the market, not timing the market. So rather than waiting until you’re older and trying to pick a winning stock, it’s a much better strategy to start while you’re young, invest in a well-diversified portfolio and let the market do its thing.

 

3. “I don’t know enough about the share market.”

The good news here is that you don’t need to know too much about the share market to start investing. You might have memories of your parents researching the performance of different stocks in the weekend newspaper and carefully handpicking which ones to invest in. But this isn’t the case anymore.

Thanks to products called exchange traded funds (ETFs), you don’t have to worry about handpicking single stocks to buy. ETFs track the performance of a whole bunch of underlying shares, giving you the chance to access a large bundle of companies in one single investment that’s managed on your behalf.

4. “It’s too risky for me while I’m young.”

It’s easy to understand why a lot of young people think share trading is too risky. You’re right, shares are a high-risk asset. But the funny thing is, share trading actually becomes more and more risky the older you get.

When you’re young, you have your whole working life to ride out any volatility in the share market. So even if there’s a dip or a bigger correction in the market and your shares fall in value, you have plenty of time for them to build themselves back up again. However, if you’re older and closer to retirement, you need to be focused on protecting your nest egg. If you’re in your 60s and there’s a crash in the market, you might not have enough time left to build your portfolio back up again.

5. “I should be saving for a house deposit instead”

There’s no reason you can’t invest in shares and save for a house deposit at the same time. You don’t need to put your entire life savings into the share market, but putting a percentage of your savings in shares while the rest stays tucked away in a high interest savings account could be a good strategy to build wealth.

It’s also good to remember that shares are considered a liquid asset, meaning they can easily be sold if you want to cash out, and you won’t be stuck holding them while you wait for an interested buyer. So if you do want to sell you shares when you’re ready to buy a home, it’s simple and quick to do so.

Don’t have the Raiz App?

Download it for free in the App store or the Webapp below:

download-raiz-app
Click to download the Raiz app

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

Today we released the results of our new research, which found that many Australian consumers are blissfully unaware of what interest rate they earn on their bank savings according.

Our research found that 60 per cent of Aussies claim to have some level of knowledge when it comes to investing money, yet 85 per cent are unaware of the interest rate on their savings account. Additional findings show consumers are not clear about the safest investment options for their money.

The survey of 1,000 Australians was commissioned to identify consumers basic understanding of savings and investment options also looked at how recent events such as the Royal Banking Commission and the declining property market were impacting their perceptions of where to invest.

Australian's in the dark when it comes to personal finance

Cash is king, but a lot of us don’t know it

Our survey revealed that 53 per cent of Australians are unaware that cash is the safest place to invest money. Many believe property (22 per cent), fixed income (20 per cent) and investing in equities (10 per cent) are a more secure option for their savings.

Many Australians are completely unaware of the best options to protect and grow their income and  think they’re getting 2-3 per cent on their savings accounts when, depending on the bank, it’s often less than 1 per cent.

This is due to the way saving accounts are advertised with introductory offers.  At this interest rate, if Australians are using their savings accounts to save money, with inflation, the opposite is happening and they’re actually going backwards.. That’s why it’s important to ensure we’re educating consumers now on how to look after their money if they’re to become more financially stable in the future.

beliefs around most secure options for savings

Women shying away from investment risk

Our research highlighted a sense of delusion when it comes to financial literacy, something which is even more recognisable amongst men. There’s no surprise then that the research found men have more diverse investment portfolios, with  38 per cent of men currently investing in the equity market, compared to  22 per cent of women.

The research shows us that women tend to be more risk averse. This is not a surprise as it’s also something we see at Raiz. For example, in the Raiz app, we have six portfolios for users to select from when investing their money. More men opt for the aggressive portfolios than women, who tend to select the more conservative options. This is not evidence that men are more financially literate than women. If anything, it indicates that men are taking more investment risks they don’t fully understand.

Men consider themselves to be more savvy investors than women

Distrust with the big banks continues to grow

The fallout of the recent Royal Banking Commission has certainly had its impact on confidence levels. Almost half (47 per cent) say they are less inclined to invest their money with the Big Four following the Hayne report.

For a while now, Australians have felt less inclined to invest with the big banks. There was an ethical line that many felt was crossed and now people are looking at alternative ways to invest their money.

More than half of those who took part in the research said they will now look to diversify their investments. This is where we think platforms such as Raiz offer support, especially for those wanting to get practical hands-on learning too.

Important Information

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product.

The information in this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz.

Past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

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