Blog - Page 3 of 18 - Raiz Invest

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Malaysia city skyline

Raiz Invest  has taken a major step forward in its push into Southeast Asia with the
signing of a joint venture agreement (JVA) with a subsidiary of a leading Malaysian investment
institution.

The JVA is with Jewel Digital Ventures Sdn Bhd (Jewel), a wholly-owned subsidiary of PNB Equity
Resource Corporation Sdn Bhd (PERC), which, in turn, is wholly owned by Permodalan Nasional
Berhad (PNB) (www.pnb.com.my). Jewel is the investment vehicle set up by PNB to spearhead its
digital business strategy which aims to unlock digital value propositions for current and future
customers of Amanah Saham Nasional Berhad (ASNB), PNB’s wholly owned unit trust management
company. PNB is one of the largest fund management companies in Malaysia with assets under
management of RM298.5 billion (A$103.9 billion) across 13.8 million accounts.

Raiz Chairman Tony Fay, says: “Reaching agreement with PNB is an exciting development as we
continue our push into Southeast Asia.”

“By joining forces with a trusted and reputable group such as PNB, we are laying the foundations for
sustainable growth in some of the fastest growing markets in the world where there is a genuine
appetite for fintech products and services,” he said.

The joint venture is a 70%/30% split between Raiz and Jewel respectively with Raiz primarily providing
the technology while Jewel will provide the required capital once the condition precedents are met,
including a granting of a licence in Malaysia. Raiz Malaysia will be a fully consolidated entity into Raiz
Invest Limited.

The JVA also outlines how Raiz and PNB will partner in other Southeast Asian countries.
Tony Fay continued: “PNB and its strategic holdings have significant presence in Southeast Asia,
which will only benefit Raiz’s efforts to enter these markets. With a population of 33 million people,
Malaysia represents an excellent opportunity for our business.”

“With the JVA executed, the next step is to submit a formal application to the regulator for the license.
Discussions with the regulator are progressing, and at this stage, subject to regulatory approval, it is
anticipated the platform will go live towards the end of CY19 or early in the New Year. The work done
on the platform to support the Indonesian launch (anticipated 3Q CY 19) will facilitate an efficient roll
out in Malaysia,” he said.

Raiz’s growth strategy and vision includes expansion into Southeast Asia. In December 2018, Raiz
secured approval for a licence to distribute mutual funds in Indonesia. The Indonesian business was
launched in March 2019, with the App expected to be released in the September 2019 quarter.

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.

A full bookshelf

George Lucas, Raiz CEO

A defining aspect of the Raiz story

Enhancing financially literacy has always been integral to the Raiz Invest story. From the time we first hung out our shingle in March 2016 under the Acorns banner, we appreciated that the millennials signing up in their droves were often as thirsty for financial information as they were for the technology that allowed them to save and invest their small change.

It seemed to me we had really hit a sweet spot. Financial advice was largely out of their financial reach (even more so post the Financial Services Royal Commission), as were fund managers. Bank interest rates were (and are) derisory, just like the customer service they offer.

So, a micro-investing platform – mobile phone or web app – that not only allows millennials to save their loose change on a regular basis but to invest in a portfolio of funds was just what they wanted. But it wasn’t just the practical application of our technology, or the ease in which millennials could access it.

No, it was they way we engaged with them, using social media to explain the roll-out of new services and products that meet their changing needs. And underpinning it has been an educational-centric focus from day 1 – and that will never change.

Enhancing financial literacy in Indonesia

But if it’s been an exciting – and rewarding – journey in Australia, then Indonesia, where we have received a licence to distribute mutual funds, will be much more so, especially when it comes to spreading the financial literacy message.

Like so many businesses looking to expand in the fourth most populous country in the world, we had no concept of the enormity of the opportunity – or the magnitude of the task. Now we appreciate both.

The numbers tell it all. Currently there are about 100 million bank accounts in Indonesia, but the number of mutual fund investors is less than a million. The simplistic – and wrong – explanation for the disparity between these two numbers is that Indonesia is a poor country.

It’s wrong because as the respected Boston Consulting Group points out, the emerging middle, middle and upper middle-class consumers in Indonesia are estimated to be 168 million by 2030 – and that’s out of a total population of 270 million.

Crowded street in Jakarta, Indonesia
The population of Indonesia is over 269 million

For Raiz, this is only half the story. Although this country missed the PC revolution, it is certainly embracing the smart phone. Research shows there are about 180 million users, and of this number at least 120 million are active on social media. It’s tailor made for us.

We will use social media to enhance financial literacy. Instead of people having to learn about it (and that approach has struggled globally), with Raiz they get hands-on experience via a medium they understand. As in Australia, many young people who never thought they could save can now do so by automating the process.

Once they start saving, they want to know how it’s invested. It’s a natural progression. Instead of seeing investment as the preserve of the rich, it becomes something they can relate to in their lives. In this way we are actively helping remove a barrier to wealth creation and will potentially improve the lives of many.

Don’t get me wrong. We think Indonesia is an exciting business opportunity. But commercial goals and having a positive impact on young people’s savings and investing habits don’t have to be mutually exclusive. For once, that old cliché, a win-win situation, is valid.

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.

Canopy of a forest

What is socially responsible investing?

Socially responsible investing can be thought of as a philosophy to investing, where the investor makes a conscious effort to invest in companies that align with their ethical ideology. A common example is not investing in companies that promote or produce products related to addictive substances (tobacco, gambling etc.).

Positive and negative screening are two methods that can be used to determine which companies are suitably socially responsible to warrant your investment.

Positive screening seeks to include companies with attributes that align with your social and ethical expectations, such as having a low carbon footprint or a gender diverse board.

Negative screening seeks to exclude companies with attributes that contradict your moral expectations. These could be companies that have significant environmental impacts or poor working conditions.

Essentially, positive screening gives preference to causes you are passionate about, whilst negative screening filters out companies with characteristics you morally oppose.

Of course, both these methods can be used in combination when searching for companies that align with an investor’s ethics and values.

Socially Responsible Investing can have a positive impact

An analysis from MSCI found that the performance of two portfolios screened to overweight stocks with higher ratings in environmental, social and governance (ESG) characteristics outperformed the global benchmark over the last eight years.

This is because many ESG stocks are technology companies such as Amazon, Google and Apple, and excludes many energy companies (such as oil companies which due to the price of oil have under-performed the market).

In Australia, investors have been at the forefront of sustainable or responsible. It is estimated in Australia that responsible investment accounted for $866 billion in assets under management in 2018, up 37 per cent from $633 billion in 2016. With global socially responsible investments totalling US$30.7 trillion.

Raiz democratises access to socially responsible investing

Traditionally, investing has often been perceived as a luxury reserved for those with enough knowledge and wealth, due to complicated and often jargonistic finance rhetoric, combined with minimum investment amounts ranging in the hundreds or even thousands of dollars.

If you’re looking for exposure to socially responsible investing, the Raiz Emerald portfolio may be a great place to start.

The Emerald portfolio is our ESG option that assists in matching investments with personal values. It provides investors exposure to large ESG Australian and Global companies, with top holdings primarily including technology and health companies.

Pie chart of Raiz Emerald (socially responsible) portfolio allocations
The Emerald Portfolio is our ESG option

The ‘Russell Investments Australian Responsible Investment’ (RARI) ETF makes up the Australia Socially Responsible allocation of the portfolio. It uses a mixture of both positive and negative screening, weighted to track companies that demonstrate positive ESG characteristics, after first screening out companies that have significant involvement in a range of characteristics deemed inconsistent with widely recognised responsible investment considerations.

As more people consider ESG companies to invest in, the view is that by investing in companies based on environmental and social considerations, it can be possible to hold investments that may not compromise on market risk or long-term performance.

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 Invest 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
  2. Entries open Sunday, 9th June 2019 at 2pm and entries close Sunday, 16th June 2019 at 11.59pm. This may be changed at Raiz’s discretion.
  3. To enter one must complete in full the survey within the timeframe stated above and provide the email address on your Active Raiz Investment account at the end of the survey.
  4. To thank you for completing the Survey, Raiz Invest will be giving away five $50.00 credit investments into 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.
  5. These five random Raiz Account holders will be notified by email when the credit investments will be deposited into their Raiz account by Friday, 28th June 2019.
  6. The permit number in the format NSW Permit No. LTPM/18/03853.
  7. This promotion is in no way sponsored, endorsed or administered by, or associated with any other third party.
  8. By entering this promotion, you agree that we may use entries for future marketing purposes in any media or branding.
  9. 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 19th March 2019 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

Raiz market and economic update

03/06/2019

From Raiz CEO, George Lucas

Lacklustre performance in gold despite global jitters

First off, on the gold market. We’ve seen the performance of gold since the start of 2019 has been poor, despite expectations for looser US monetary policy and mounting US-China trade tensions.

That’s somewhat unusual given gold is considered a safe-haven asset as it can be negatively correlated with traditional risky assets, such as equities. However, since the US-China trade war took a turn for the worse in early May, the price of gold has fallen. The drop is arguably more surprising given it’s happened against the backdrop of falling expectations for interest rates in the US.

US stocks strong but bonds signal a warning

Another consideration is that the US government bond and stock markets are saying different things about the health of the economy, given that the S&P 500 is only 5 per cent or so off its peak.

The US 10-year Treasury yield, meanwhile, has fallen below 2.25 per cent. Its 0.50 per cent drop since the start of March has been driven by a reassessment of the prospects for US Federal Reserve policy amid signs of economic weakness in the US and its trade spat with China.

However, it is common for equity prices to remain high while Treasuries rally in anticipation of looser Fed policy, with investors  now anticipating the two rate cuts in the US. The stock market’s resilience doesn’t tend to last, though, when the expected reduction in interest rates is vindicated by a subsequent slowdown in economic growth.

US faces multi-front tariff war

Turning to global trade tensions, US President Donald Trump now plans to slap new tariffs on Mexican imports, which would leave him fighting a multi-front campaign that threatens more instability for US manufacturers, US consumers and the global economy.

On the Chinese side, China’s state planner authority said this week that it would “prioritise domestic demand” for rare earth elements (REEs), increasing speculation that China may retaliate against the US tariffs by limiting exports of REEs.

If China follows through on this threat, offshore REE prices would probably jump as China accounts for over 90 per cent of global production. This would push up import costs for the US, which relies on REEs for both military and industrial uses.

A large wedge between onshore and offshore REE prices would also help to discourage electronics manufacturers from shifting production out of China to other countries in response to US tariffs.

Back to Mexico, President Trump’s surprise announcement was that he would impose 5 per cent tariffs on Mexican imports, with the possibility of raising them to 25 per cent if Mexico does not stop migrants from crossing into the US.

Tariffs on US imports from Mexico will have significant implications for share prices of auto makers with large operations in Mexico. German, Italian and Japanese car makers are most exposed.

Capex spend disappoints in Q1

Meanwhile back here, Australia’s private capex survey confirmed that firms are becoming less willing to invest, with private capital investment declining by 1.7 per cent quarter-on-quarter in Q1.

Turning to interest rates, we expect that the Reserve Bank of Australia to cut rates by 0.25 per cent to 1.25 per cent on Tuesday.

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.

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:

download-raiz-app
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% per annum, 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.
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