Blog - Page 2 of 13 - Raiz Invest

Bring to the table win-win survival strategies to ensure proactive domination. At the end of the day, going forward, a new normal that has evolved from generation.

Locks on chain

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You just deposited $10 into your Raiz account, the funds leave your bank to be used to buy Exchange Traded Fund (ETF) units, and your Raiz balance increases. But where, exactly, are these ETF units held for you?

They are not held by Raiz, but are held by an independent Custodian.

When you deposit funds into your Raiz account, there are a number of actions that happen before you see your balance increase. This diagram, taken from our PDS, provides an overview of what happens when you invest into your account.

Structure of the Raiz Fund showing the role of the custodian
Structure of the Raiz Fund

As you can see, Raiz doesn’t hold any ETF units. When we buy ETF’s on behalf of investors, the actual ETF units are then held by an independent Custodian (Australian Executor Trustees Limited).

What is a Custodian?

Put simply, a Custodian’s job is to hold assets (in this case ETF units) on behalf of the investors in the registered managed investment scheme (Raiz). They could be thought of as a bank for Raiz, whose only role is to hold and safeguard the assets of the fund. The chosen Custodian, Australian Executor Trustees Limited (AET), is one of Australia’s largest and oldest licensed trustee companies. AET has been operating for over 130 years, having been providing Custodian and Trustee services since 1880.

What benefits does a Custodian provide to Raiz users?

  • The primary benefit of our fund’s assets being held by a custodian is the assurance an independent custodian provides Raiz users. Hypothetically, if Raiz was to suddenly go out of business, the assets are still held by the Custodian and the dollar value of every user’s account would be returned to them. The ETF units, held by AET, would be sold on market by the Custodian so that their value in AUD would then be deposited back into users’ bank accounts.
  • Another benefit is the checks and balances a Custodian provides to Raiz users. They have a compliance function to ensure everything matches up.

If you’d like to read more in-depth about our Fund structure and Custodian, have a look through our PDS 

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.

  1. An active Raiz Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statement found on the website: raizinvest.com.au.
  1. Entries open Sunday, 9th December 2018 at 11am and entries close Sunday, 23rd December 2018 at 5pm. To enter one must complete in full the ‘Improving our Services’ within the timeframe stated above and provide the email address on your active Raiz Investment account within the survey. Note there could be circumstances where the survey period is shortened, extended or otherwise modified at the discretion of the company.
  1. To thank you for completing the Survey, Raiz Invest will be giving away five $50.00 credit investments in to their active Raiz Investment Account. These five investments will be selected at random. We note that no individual prize exceeds $250.00 and total value of prizes do not exceed $50,000.00.
  1. These five random Raiz Account holders will be notified by email when the credit investments will be deposited into their Raiz account by Monday 14th January 2019 subject to any circumstances where the survey period is shortened, extended or otherwise modified at the discretion of the company.
  1. The permit number in the format NSW Permit No. LTPM/18/03853.
  1. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  1. By entering this promotion, you agree that we may use entries / results / feedback for future marketing purposes in any media or branding.
  1. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 10th April 2018 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing. Amounts are in Australian dollars.

NSW Permit No. LTPM/18/03853

G20 summit

Market Update from George Lucas, CEO of Raiz Invest

Positive Trump-Xi meeting at G20 Summit

This week will start with analysis of the G20 Summit in Argentina and then the market should go back to focusing on US treasury yields and the possibility of a slowdown in the US.

The G20 summit saw trade at the top of the agenda, with hopes for talks between Chinese President Xi Jinping and US President Donald Trump and that the two leaders would strike a deal easing US-China tensions after the recent APEC meeting confirmed deep divisions.

In a positive outcome, Xi and Trump agreed to temporarily halt imposing new tariffs and work on a more permanent deal at a dinner on Saturday after the Buenos Aires summit.

Without a deal, Trump could have pushed ahead with levying tariffs on an extra $250bn or so of Chinese imports.

Business deal shake
The US and China Agreed to a Temporary Trade Deal

China stocks rally

Despite the talk of US protectionism before the G20, equities in China, which have been a big victim of trade war fears, have recovered recently and done better than those in the US.

The underperformance of Chinese equities earlier in 2018 started around the same time Trump approved tariffs on $50bn of Chinese imports, and threatened more to come.  Worries about China’s economy, which also emerged around that time, didn’t help either.

But since early October China’s stock market has performed noticeably better than its US counterpart, in line with some stabilisation in the renminbi relative to the greenback.

That partly reflects the S&P 500 starting to come under pressure as investors fret about the outlook for the US economy and improved sentiment surrounding US-China trade tensions.

Shanhai
Shanghai is a key component of the Chinese Economy

Spotlight on Fed Chair Jerome Powell

Turning to the US, markets will be watching US Federal Reserve (Fed) Chairman Jerome Powell’s address to the Joint Economic Committee of Congress on the US economy.

Powell’s testimony this week is likely to see him hint that the Fed intends to continue hiking interest rates next year. I don’t think he can say anything else as the November employment report will likely be strong and cement expectations for a December rate hike.

However, slumping oil prices and fears about the US economic outlook have caused investors to dial down expectations for tighter US monetary policy for the first time in ages.

Investors are now discounting roughly two rate hikes between now and the end of 2019, rather than the three that they were anticipating a few weeks ago.

Jerome Powell
Jerome Powell Will Address the Joint Economic Committee of Congress this Week

2-year US Treasury yields dip

Still in the US, the 2-year US Treasury yield has fallen significantly since November 8. This has also been driven by the recent fall in oil prices pushing down inflation expectations and worries about the US economic outlook connected to future Fed tightening.

Oil’s more than 30 per cent decline since touching a four-year high in early October has left energy stocks the worst performer on Wall Street this quarter.

However, a question remains about how much of the tumble in oil is due to a sudden market oversupply, or if it’s down to fears of a broader economic slowdown next year.

OPEC meeting could reverse oil-price plunge

The answer will likely come at this week’s OPEC meeting, with a supply cut on the agenda.

There’s confidence that a deal to restrict supply will be reached after Russia signalled it would continue to cooperate with the cartel and may agree to some form of production cut.

But if oil prices continue to fall and were to reach $45 a barrel, then that becomes a clearer signal that it’s not just an oversupply challenge, but that slowing global growth is a factor.

Oil Rig at sea
Oil price plunge could be reversed

Read our previous blog – Why Time in the Markets Matter’

———————

Important Note: The information on this website is provided as 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 on this website is confidential and 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 on this website 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 on this website 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 Raiz Invest or any third party who has contributed to this content for any of the information contained here in or for any action taken by you or any of your officers, employees, agents or associates.

Time in the Market

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You may or may not have heard the saying, “It’s not about timing market, it’s about time in the market.” But what does this mean exactly?

Some new investors may tend to place a short-term focus on how their investments are performing. They’ll frequently track how their shares are going, get excited when their position rises, and then, if it falls, they’ll become carried away with emotion and saddened by a change in market conditions and short-term loss of assets.

But what about the long-term picture? Over time stocks tend to naturally go through periods of growth and decline – this is completely normal. Therefore, selling off stocks after a brief period of decline rather than focusing on the long-term goal can be a strategy that doesn’t add value, given it is likely that shares will rise later down the track. Just as hard as it is to predict the downturns, it is also hard to predict when stocks will turn around and rally.  This is known as timing the market – picking the tops and bottoms.

To avoid having to time the market to invest, a more long-term strategy is to utilise the advantages of time in the market – that is, the longer you are in the market, the more likely you are to see a healthier return.

The first step is to choose the right portfolio for you. If you are likely to withdraw your money when the market declines, you should probably be in Moderate to Conservative portfolio options. This way, a stock market decline should have less emotional impact on you. Therefore, you are likely to remain disciplined when markets decline by not withdrawing your money due to the fear of more losses and sticking with your strategy.

If your savings goal is short-term (less than three years) a Conservative option is also probably best.

The Aggressive and Emerald portfolio options are for those with long-term saving goals and the ability to remain disciplined during market down turns and the associated losses on their portfolios.

Choosing the right portfolio is an important step in avoiding the emotional traps of euphoria and depression that can cause you to make rash decisions

Raiz Investment Portfolio's
An example of the projected value for a Moderately Aggressive Portfolio after 11 years.

The second step is to have a disciplined saving/investing strategy or philosophy. At Raiz, our philosophy is to invest small amounts regularly, thus helping to manage market uncertainty. This is a well-known investment strategy, known as dollar cost averaging.

Dollar Cost Averaging Definition
See our blog on “The Advantages of Dollar Cost Averaging”.

Raiz automates this strategy and does it more frequently, with the average Raiz customer investing at least once a week. The result can be a healthier balance over the long-term through the automation provided by Raiz.

By automating the process, your investing strategy can also be protected against those short-term emotions.

Another benefit of spending more time in the market is from compounding. This is when an asset’s earnings are reinvested to generate additional earnings over time. Reinvesting dividends into shares can increase returns due to the power of compounding.  So, the longer you spend in the market, the more dividends you are likely to receive, which are reinvested into more and more shares over time.

It is not easy when it is your money.  We all experience the emotional high and lows that come with investing, however by maintaining a disciplined, automated approach, and selecting the right portfolio, you can avoid short term stress and take advantage of dollar cost averaging and compound returns over time.

 

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.

 The Raiz Invest Fund is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) a subsidiary of Raiz. A Product Disclosure Statement for this product is available on the Raiz Invest website and App. A person should read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

  1. An active Raiz Invest Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statements found on the website: raizinvest.com.au.
  2. Entries open Monday 19th November 2018 at 4PM and entries close Sunday November 25th 2018 at 5PM. To enter, one must comment on the Facebook post within the time frame stated above.
  3. Raiz Invest will select five winners with a $100.00 credit investment in to their active Raiz Investment Account. These five investments will be selected at Raiz’s discretion. We note that no individual prize exceeds $250 and total value of prizes do not exceed $50,000.
  4. These five Raiz Account holders will be requested to message us their email and will be notified by email when the credit investment is deposited into their Raiz Investment account by Friday 30th November 2018.
  5. The permit number in the format NSW Permit No. LTPM/18/03853.
  6. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  7. By entering this promotion, you agree that we may use entries for future marketing purposes in any media or branding.
  8. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 10th April 2018 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

NSW Permit No. LTPM/18/03853

by Raiz Invest CEO, George Lucas

So, is the market volatility over? Unfortunately, when you invest into markets, it is never over.  The reason we invest is to give us the potential to earn more than can be earned from a bank account.

With that in mind, here’s my best guess for the reason behind the recent downturn in the markets. It wasn’t about fears around global growth, it was about an expectation that company earnings, especially in the US, won’t be able to grow as fast in the future as they have over the last couple of years.

Many in the market decided to take profit because of this earnings uncertainty, especially when it came to US technology companies.

The latest US employment report, released last Friday night, didn’t help. It showed a strong US labour market, adding a better-than-expected 250,000 jobs in October, which means that company earnings may slow as wage-costs rise.

In order to earn the potentially higher returns from investing we need to put in place strategies to manage the market uncertainty.

Firstly, when it comes to portfolio selection, clients should consider their age and goals in deciding what portfolio selection is right for them.  Being in one of the aggressive portfolio options can work well when markets are rising.  However, when they fall, they will also lose more.  If the fall in the dollar amount causes you to withdraw your money or to time your market exit and then entry, then maybe you should explore a less aggressive option.

Market timing usually doesn’t lead to higher returns, as funds may be withdrawn near the bottom of the market and added back near the highs.  There is a saying “It’s the time in the market, not the market timing” 😊.

This is why our philosophy is about investing/saving small amounts regularly.  We minimise the effect of market timing and it can assist in managing market uncertainty.

In my opinion no matter what your age, if you are saving for a short-term goal, then you should be in one of our conservative options.  Market uncertainty is then less likely to have the same affect on the value of your portfolio and you are more likely to reach you goal in the time frame you have set for yourself.

If you are saving for the longer term, say greater than 3 years and you are young, then being in an aggressive option may suit you.  This is because markets do tend to go up in the long term (you need to include dividends). So even though in the short term you may have set backs in your portfolio value, in the long term you should earn more than you can earn in a bank account.

In the end, it is your choice. We cannot recommend a portfolio choice.  Raiz is not a get rich quick scheme, it is about developing a habit of regular saving and investing to meet a long or short-term goal.

Remember, the current drop in the markets has nothing to do with the health of current US corporate earnings or the current state of the global economy and global growth – it is all about future expectations.  Markets are currently digesting the recent information and trying to land on a consensus of what earning growth will be for 2019.

Indeed, by many measures this quarter has been a record earnings season for US companies, while the US economy posted an impressive annualised growth rate of 3.5 per cent (annualised) for the third quarter.

US stocks weren’t alone in having a horror October. The MSCI’s World Index of stocks in 23 Developed Market countries fell by more than five per cent in local currency terms over the month.

So, is the market volatility over?

My answer is probably not as it will take time and some more ups and downs for the market and investors to come to a consensus, if, and by how much, earnings for corporations could slow.

In saying that, it is possible that November and December will see rallies. Although, February 2019 could turn into another sell-off until March 2019 when the forward-looking market has got its head around earnings growth for 2019 and begin focusing on earnings for 2020.

What level we end up at, and how much down, if at all, I don’t know. I do hope I am wrong, and markets resume their steady rally, but that is not my best guess.

So, choose your portfolio wisely — based on your goals and expectations of what you want Raiz to deliver.  Also, the Raiz philosophy of investing small amounts regularly can assist with managing market uncertainty as market timing is difficult.

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.

The Raiz Invest Fund is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) a subsidiary of Raiz. A Product Disclosure Statement for this product is available on the Raiz Invest website and App. A person should read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

  1. An active Raiz Invest Account must be held (account balance greater than $5). Raiz account holders hold valid accounts as set out in the product disclosure statements found on the website: raizinvest.com.au.
  2. Entries open Monday 5th November 2018 at 4PM and entries close Sunday November 11thNovember 2018 at 5PM. To enter, one must comment on the Facebook post within the time frame stated above.
  3. Raiz Invest will select five winners with a $100.00 credit investment in to their active Raiz Investment Account. These five investments will be selected at Raiz’s discretion.
  4. These five Raiz Account holders will be requested to message us their email and will be notified by email when the credit investment is deposited into their Raiz Investment account by Friday 23rd November 2018.
  5. The permit number in the format “NSW Permit No. LTPM/17/02522.”
  6. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  7. By entering this promotion, you agree that we may use entries for future marketing purposes in any media or branding.
  8. The competition is promoted by Raiz Invest Australia Limited, Level 11/2 Bulletin Place Sydney 2000 NSW, 1300 754 748. ABN 26 604 402 815, who is the Authorised Representative of AFSL 434776. The Raiz product is issued in Australia by Instreet Investment Limited (ACN 128 813 016 AFSL 434776) and promoted by Raiz Invest Australia Limited (ACN 604 402 815). A Product Disclosure Statement dated 10th April 2018 for this product is available on the Raiz website and App. A person should read and consider the Product Disclosure Statement in deciding whether or not to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.

NSW Permit No. LTPM/17/02522

by Lachlan Fuggle

Why is superannuation important? What makes the guaranteed contribution scheme justifiable? And how much should you personally contribute to your super fund?

With Australia’s pension fund (superannuation) ranked 4th in the world in 2018 by the Melbourne Mercer Global Pension Index, and super assets totaling $2.7 trillion at the end of the June 2018 quarter, it’s worth taking a look at what super means for Australian citizens and its economy.

Australia’s modern superannuation system began in 1991, with a compulsory scheme that requires employers to pay a set portion of their employee’s salaries into a super fund, known as guarantee contributions. Currently, the super guarantee rate is 9.5% of your income, and is planned to be incrementally increased after 2021 to 12% by 2025. On top of these compulsory contributions, you can also choose to make personal contributions out of your own pocket to further grow your super.

When can I access my Super?

To access your super’s funds, you need to reach your ‘preservation age’, which is currently between 55 and 60 depending on when you were born. As long as you’re permanently retired you can access your super once you reach this.

Benefits of Super?

The obvious reason for super’s existence is to help people save money for retirement. Therefore, the main benefit of guaranteed contributions is that it forces you to set aside money for eventual retirement, so you have an adequate income stream post retirement to be comfortable and maintain a certain standard of living. This can be especially helpful for anyone that may struggle to save money for long term goals, since it can be hard to think about putting aside money that may not help you for another 30 or so years. See our blog ‘Why you don’t care about Future you’

The drawback of mandatory super payments is of course, that in the short-term you feel a loss of disposable income, and with the savings being out of reach until your preservation age, you may have to save an additional pool of money to afford short to medium term purchases such as a new car or holiday (see our blog ‘5 Ways to Save More with Raiz’). Given this, it’s still hard to argue against investing in Super. A lack of retirement funds would mean more reliance on the government’s Age Pension scheme, which in turn places more pressure on the government (and therefore tax payer dollars).

How does Super affect the Australian Economy?

Hypothetically, if people began to not contribute much/any money to their super throughout their lives, an increased reliance on the Age Pension would strain government resources, causing either allowance per person to decrease, or forcing the government to increase funding. This funding would have to be sourced still within government funding in other areas, and/or increased tax rates. The effects of this would be detrimental to not only Australia’s aging population as there will be more people in retirement, but to the whole Australian economy.

While Australia ranks number 54th in the world by population, ranking 4th by pension fund assets shows the great lengths in us as a country in ensuring enough wealth for Australians in the future.

Should you personally contribute to your super fund?

Another way of growing your super balance is through voluntary contributions. The main advantage of this is that any contributions may be tax deductible*, reducing your personal income tax. For more detail, see our blog ‘New rules for Super Contribution’. These savings could also potentially accrue more returns than a standard bank savings account in the long term. When judged over the last 10 years, the top 30 super funds averaged a return of 6.4%. The top 30 performing funds over the last 12 months averaged returns of 9.2%. A return of 9.2%, compounded annually over 10 years, would see a $100 balance more than double to $241, without any further deposits.

 

How can you easily manage your Super?

Raiz Super offers its users an easy to use interface that allows you to easily view your balance and all contributions (guarantee & personal), all on your mobile phone. Being entirely accessible digitally through the Raiz app and website means users can regularly check their Super balance, observe how the market has affected their overall amount, and easily contribute additional funds.

So, given the importance of Super, do you feel connected enough to your future?

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 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 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 making a decision to invest in Raiz and is not a good predictor of future performance.

 * For the new rules, there are certain eligibility criteria, which are not trivial, so you do need to check with a licensed tax adviser (or other) before deciding to make voluntary contributions and claim a deduction.

Don’t have the Raiz App? Download here

Australia is in the big league. According to the Bank of International Settlements (BIS) and the International Monetary Fund (IMF), we have the second highest household debt to GDP ratio out of 43 countries, with Switzerland getting the chocolates.

But while household debt has been rising, we should not think this is a new phenomenon – Australians have typically not been savers.

We’re not alone in this. Indeed, if a study by researchers at Cornell University is on the money, it’s an American trait, too. This piece of research contends that Americans are far more attuned to seeing opportunities to making money than saving it. It seems our “grey matter” is very creative when it comes to making a buck, but not nearly so good at seizing opportunities to save a dollar.

What the study did was measure our attention to earning or saving money. According to a Wall Street Journal article, participants had to identify colours shown quickly on a computer: one “earning” colour that let them gain 30 cents, a neutral colour that had no monetary effect and one “saving” colour that let them avoid losing 30 cents.

When the “earning” colour was shown, a staggering 87.5% of participants identified it more quickly and accurately than when the “saving” colour was shown. Even in trials that framed “saving” as earnings that would come slightly later, participants were still better at immediate earning.

In the study’s second part, participants had to identify which colour appeared first. Three out of four said they saw the “earning” colour appear first—when in fact, the “saving” colour did. This suggests our “earning” bias may even be strong enough to warp our perception of time.

“It’s such a powerful bias that it literally distorts the lens with which you see things. It’s not like people don’t care about savings,” says Adam Anderson, an associate professor and co-director of Cornell’s Affect and Cognition Lab, who co-wrote the study and is quoted by the Wall Street Journal. “We’re kind of blind when those opportunities are presented.”

Australians, I would argue, are like Americans. We are good at earning money, but not so good when it comes to saving it. Perhaps a key reason is the fact we spend much of our lives making our “hard earned money”, and so little our lives considering, or working on how we can hold on to it and save it.

We need to spend more time training ourselves to save money.

At Raiz Invest, we would like to think we are playing a small – but significant – role in changing this thinking about savings. Our App, which now has more than 175,000 active users, many of whom fall into the millennial demographic, is an easy and price-competitive way to automatically save and invest.

In the process we are teaching Australians, especially young Australians, about saving, making it a daily part of life, just like working to earn it. In the end we are hopefully empowering them to have a far greater sense of control over their financial affairs, of which saving is such a big part.

It won’t happen overnight. But it does need to happen, and with governments and regulators still only paying lip service to financial literacy education in the schools, we hope the Raiz Invest App will be part of the solution to help Australian earn more, while saving.

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.

What is My Finance?

Need an easier way to understand your finances? My Finance is a free to use feature within the Raiz app. It provides you personalised insights and notifications on how you are spending. Spending is the other side of the equation when it comes to saving so by spending less, you can potentially save more…. Keeing a handle on how spending can help you meet your savings goals 🙂

In addition, we have harnessed machine learning & artificial intelligence into the feature so that it will provide you with tips & insights relevant to you – about your spending habits and where you may have saving opportunities. Or you can also  question our chatbot Ashlee – see our blog ‘Ask Ashlee – Raiz Intelligent Chatbot’

My Finance Tip

How it works

To use My Finance, please make sure you link up your spending accounts as this is how My Finance will be able to provide you personalised insights. The more up to date your My Finance is with categorised spends and linked accounts, the more accurate this will be.

Link your spending accounts to see where you spend

Check out ‘Uncategorised’ tab in My Finance

Check out the ‘Uncategorised’ tab within ‘Categorise Transactions’ to categorise any that My Finance was unable to. My Finance will then learn to categorise this in the future and give you better insights, powered by machine learning technology.

You are also able to change categorised transactions that we may have categorised wrong at any time by tapping on ‘All’ and the specific transaction you’d like to change. It will also fix up past transactions and My Finance will learn to categorise this in the future as well.

Check out the ‘Uncategorised’ tab within ‘Categorise Transactions’
Check out the ‘Uncategorised’ tab within ‘Categorise Transactions’

Future Cash

My Finance also projects your future free cash based on your past spending and income, which may also help you determine if you are spending above your means or if you can save more.

Project your future free cash

Integrated into our Raiz Chat

We know it can be hard to quickly check or calculate your expenses on the go. That’s why My Finance is also integrated into our Raiz Chatbot, Ashlee who will be able to respond to your spending and future cashflow questions in real-time. You can check this out in more detail on our blog – ‘Ask Ashlee – Raiz Intelligent Chatbot Questions’

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.

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