acorns Archives - Raiz Invest

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Bessie Hassan | Money expert at finder.com.au

Whether
you have a great credit score, a bad one or you’re confused as to what the
numbers actually mean, improving your credit score will shape your financial
future for the better. A good credit score can help you get a discount on your
home loan or help you secure new finance.

Here
are six ways that you can improve your credit score with minimal effort.

1)  Check
your credit report

Your
credit score is based on the historical borrowing and repayment behaviour
listed in your credit report. Checking your credit report on your own
won’t have any impact on your credit score. However, if a lender requests your
credit report, it may leave a negative mark. This is why you should be careful
of how many lenders you approach for a loan, as it will often prompt them to
check your report.

Checking
your history yourself allows you to see what activities have affected your
credit score, giving you a better understanding of what you should and
shouldn’t be doing. You might also be able to find any mistakes that have been
made by credit reporting bodies and take action to correct them.

2)  Make
sure you have a borrowing and repayment history

Having
debt doesn’t sound like it would improve your credit score but a completely
blank credit report doesn’t assure lenders that you’re a responsible borrower.
If you don’t have any loans, it might be a good idea to start using a credit
card, even if you only use it to pay for petrol.

3)  Pay
your bills on time

Once
you have debt, it’s important to pay it off on time. Missed or late payments on
credit contracts such as credit cards, personal loans and home loans can
negatively affect your credit score. Making the minimum payment on time will
show healthy borrowing behaviour.

To
make this easier on yourself, set calendar reminders on your phone or computer
so that you don’t miss a due date. If you’re sure that you’ll always have
enough in your account to pay your bills, try setting up a direct debit to
automatically pay the bills when they’re due. Also make sure to let any banks
or lenders know your new address if you’re moving. That way, you’ll prevent
yourself from missing your bills and having them listed as defaults.

4)  Lower
your credit limit

A
recent survey from finder.com.au found that two-thirds of Aussies believe that
only your credit utilisation ratio (that is, how much of your credit that
you’ve actually used) affects your credit score. However, in Australia, only
your credit limit is recognised rather than how much you’ve borrowed out of it.

For
instance, if your credit card has a $6,000 credit limit and you’ve only
borrowed $1,400, the only figure affecting your credit score will be the
$6,000. Therefore, it’s a good idea to lower your credit limit to $2,000, or to
whatever credit limit is just enough for you.

5)  Consolidate
your debt

If
you have several loans, consolidating them all into one account can make it
easier to manage your repayments. It will also reduce the risk of any negative
activity on your credit report and it can help you save on fees and get you a
lower interest rate.

6)  Check
your credit score regularly

The
final way you can actively improve your credit score is to check it regularly.
Getting your credit score doesn’t require much effort or time. All you need
to access your credit score for free is your email,
name, sex, date of birth, driver’s licence and your address.

Once
you’ve made an account, checking your credit score is easy. Generally, your
credit score will change every month if there is any new activity on your
credit report.

Ultimately,
improving your credit score comes down to proving that you’re a responsible
borrower that can make punctual and regular payments. Ensuring that you borrow
within your means and never miss a due date can almost definitely lead to an
improved credit score.


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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

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

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By Ben Barlow of UMS Freelance

There
are a lot of benefits to diversifying your portfolio and exploring markets outside of Australia. Overseas
investments can offer plenty of new opportunities to profit from. Of course, it
isn’t that simple, or everybody would be doing it too. A lot of effort must go
into any kind of investment you make outside of the market you understand best to avoid bad decisions
that can cost you dearly. However, with the right research and advice, you can
fare well if you do make the decision to branch out. Here are some points on
the whys and why nots of working with foreign markets:

Currency
Value

Right
now, Australia’s currency is strong. It bounced back in May and is still
sitting comfortably above US78c. This is good news for travellers, but bad news
for Australian export businesses. Aussie travellers now have more buying power
abroad, particularly when they travel to the UK, Canada, and New Zealand, where
the local currency is weaker against the AUD. A strong currency is also good
news for anyone who loves to shop online. It’s bad news for exporters, however,
as the AUD makes Australian products far more expensive for overseas customers.

For
businesses that import goods from overseas, a strong AUD is a good thing, as
they have more buying power. Importing supplies becomes less expensive,
particularly from countries such as the United States, Japan and the UK.
Importing from countries with a weaker currency reduces costs in the supply
chain and allows for greater profit margins.

This
is all simple economics, but something you need to investigate quite heavily if
you want to deal with foreign markets. Learn about forex markets and follow the markets
in any countries you want to deal with – after all, these things can change
very rapidly. Australia may have a strong currency right now, but currencies
fluctuate daily, depending on macroeconomics and global events, so the value of
your investments could change very easily. Keeping up with political and
macroeconomic news in any country you might invest in or trade with is
therefore crucial.

Emerging
Markets

While
we have touched on trading with major economies like the USA, Japan, Europe and
the UK, another benefit from foreign investment is when you get in with an
emerging market at the right time. China, for instance, has a growing middle
class of an estimated 300 million people, and this may be a good target
audience for luxury imported products as they tend to enjoy shopping for items
that are made in the West as these can be seen as more luxurious.

This
is a huge market for American, European, Chinese and Japanese businesses now,
but can also be tapped into by Australians who are China’s sixth largest trade
partner. Investing in property and business in emerging markets can also be
something to consider. Brazil, for example, is a country that is having something
of a business boom, and there are also interesting projects going on in the
Caribbean that could inspire the right type of investor.

Should
You Try It?

The
problem is, of course, that emerging markets tend to be culturally and
linguistically quite different from Australia. Engaging with them can be quite
profitable however will require a lot of research and travel, and this is
something off-putting to people who’d rather deal with the Western, English
speaking markets they already know well.

The
idea of dealing with completely different audiences and markets may be a bit
intimidating, however it can work out well for the people willing to put the
work in. What you will need however, is contacts in your country of choice who
can help you understand and learn. Things like exchange rates, politics and
business etiquette you can learn from online research, but you won’t truly feel
tapped into the market unless you have someone on your side who is part of it.
If you can get that kind of connection going, are willing to learn about
another culture, and possibly learn another language (for instance, in India
and many parts of the Caribbean, English is the first language anyway, however,
if you decide you want to work with Brazil you’ll need Portuguese), you may
have a better chance to make some great investments.

Business
is very international, and being global can generally be a wise move, but do be
prepared to put some work in.


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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

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

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Whether you have been in the
investing world long or not, it is very likely you’ve heard of Warren Buffet. A
top dog in finance of all sorts, he is one of the five most wealthiest people
in the world.

Often referred to as the world’s
greatest investor, his long-term track record suggests that title is well
deserved! Investors and the business world alike have been seeking his advice
for decades, so here we have picked our favourite moments of his wisdom:

“Try to be fearful when others are greedy and
greedy only when others are fearful.”

Probably the most famous
Buffett-ism, this quote is essentially another way of phrasing the popular
investing maxim, “Buy low; sell high.” Investors frequently do the opposite
because of herd mentality; our psychological desire to follow the crowd.
But being a contrarian can be much savvier. For example, when current events
scare investors away from a down market, you might use that opportunity to buy
quality stocks on sale.

“Both large and small investors should stick with low-cost
index funds.”

Buffett may be a brilliant stock
picker, but he still recognises the strength of simple investing with a
low-cost S&P 500 index fund.

In 2007, Buffett bet a New York
hedge fund $1 million that his simple, low-cost investing strategy would
outperform the hedge fund industry over 10 years. And he won.

“The investor of today does not profit from
yesterday’s growth.”

This oldie but goodie reminds us
that past performance is no guarantee of future results, so you can’t count on
a hot investment continuing its streak. Instead, look to the future. Be sure
any investment you’re interested in has good prospects and can help you reach
your goals.

“Our favorite holding period is forever.”

Of course, Buffett doesn’t really
expect anyone to hold onto an investment forever. His point is that you should
“buy into a company because you want to own it, not because you want the stock
to go up,” as he put it to Forbes magazine in 1974. That means if
you’re trying to invest in individual stocks, you look for good businesses
you believe can be profitable for the long haul. Then you’ll only sell when you
need the cash, not because it’s time to unload a dud.

“Anything can happen anytime in markets… Market
forecasters will fill your ear but will never fill your wallet.”

Listen to Warren: Ignore the
noise—especially given today’s media landscape, where we have constant access
to information, and every minor event stands a chance at making headlines and
moving the market (at least in the short term).

In the end, as long are you’re
confident in your plan and portfolio, this shouldn’t change your long-term
investing strategy! Like the Raiz philosophy to invest small amounts regularly,
even in falling markets, this can help you to ride out the downturns in the market
and is one of the keys to having a healthier balance over the long run.


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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

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

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When
it comes to investing, returns on investments (positive and negative) are
generally expected to vary from year to year.

While
market fluctuations are completely normal, this can make it difficult to
measure how much you may potentially make when you are investing small amounts
on a regular basis. This is further complicated with making withdrawals when
you need the money, as Raiz lets you do. People also like to understand returns
in a similar way to interest on a bank account.

This
is where the comparable rate needs to be calculated using the internal rate of
return (IRR) method.

As of Dec 2018, the average Raiz user has made 12.4% p.a. (return includes all fees but before the monthly maintenance fee) – IRR – comparable rate. But we don’t know what the future
may hold so this return cannot be relied on because of market risk going
forward*.

Let’s
look at two different market scenarios when opening an Raiz account.

You
open an Raiz account with $100 and add a recurring $20 monthly deposit for the
next 12 months. However, after 6 months you then decide to take $50 out of your
Raiz account.

In
the first scenario, the market goes up 20% in the first 6 months and then falls
10% for the remaining. This means you would have invested $220 in the first 6
months while the market was rising – taken $50 out – and invested the remaining
with $120 recurring in a falling market.

In
the second scenario, the market falls 10% in the first 6 months and then
rallies 20% for the last 6 months. This mean you would have invested $220 in a
falling market – taken out $50 – and invested the remaining with $120 recurring
in a very strong rising market.

While
both these markets finished at the end of the year on 10%, the return on your Raiz
account will be completely different and will depend on how the market got
there. In the first example, the comparable rate is 4.75% p.a. While in the
second scenario the comparable rate is 16.4% p.a.

These
two scenarios illustrate how the market gets there is important, hence the need
to do an IRR calculation which takes into account when you made your investment
and when you made your withdrawals to calculate a rate that is comparable to,
for example, a bank account rate.

To
learn more about IRR please visit Investopedia link here

*Please
refer to the product disclosure statement and the additional information
document to understand more about the markets risks that can affect your
portfolio.

For more information on Raiz fees, click here.


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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

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

When
you think of super, it may feel so out of reach that people might be assuming
it will be like a pot of gold awaiting them during retirement. That might not
be the case if you aren’t aware of what is going on. There’s no doubt that most
young people are not engaged with it when they should be. A great article by
Caitlin Fitzsimmons goes into this further here on how important it is to get your super
right or see more on our blog ‘Why your Superannuation is still Important when you’re Young’

It’s
also important to keep up to date with the new rules so you can feel in control
of your decisions and any actions to take.

Below
are the new updates on super contribution from 1 July 2017.

All
employees are now eligible to claim personal tax deductions on contributions

Prior
to 1 July 2017, only established self-employed taxpayers or taxpayers that had
little employment income were eligible to claim personal tax-deductible for
their voluntary superannuation contributions.

This
was due to a rule which prevented you from claiming a tax deduction if 10% or
more of your total assessable income came from employment sources.

This
rule has now been removed, meaning you could be eligible to claim personal tax
deductible on voluntary contributions at any time throughout the financial
year, right up until 30 June (depending on your circumstances). This also means
you don’t need to arrange a salary sacrifice with your employers to contribute
or add more if your circumstances allow.

Raiz
also allows you to make voluntary contributions to your superannuation directly
from the App for a range of Super Fund Providers. If your Super Fund provider
is not listed in the App, please let us know and we will get it listed.

Now
your savings in Raiz may be tax deductible*.

Raiz Super is also now available. Engaging, affordable superannuation. You can now invest in the same 6 Raiz portfolios and view all your investments in one place, on your mobile phone. For more information on Raiz fees, click here.

The
new Concessional Contribution cap

Concessional
contributions are the contributions made to your super before your income tax
is taken out. Moving forward, this cap has been reduced to $25,000 and applies
to all taxpayers, regardless of age. In future years, this cap will be indexed
in increments of $2,500.

This
cap includes compulsory employer contributions (SG 9.5%), pre-tax salary
sacrificed super contributions you have arranged with your employer, and any
voluntary contributions you have made.

Rolling
over unused contribution cap

Off
the back of this cap and the ability now for all employees to do tax-deductible
voluntary contributions, there is also a new super rule that allows for a
‘catch up’ claim of unused concessional contributions for following years.

What
this means is that if you don’t use up the full amount of your concessional
contribution cap of $25,000 in a year, the unused amount will be rolled over
and accumulated over a rolling 5-year period. This may provide opportunities to
make higher voluntary contributions in a future year.

For
all these new rules, there are certain eligibility criteria, which are not
trivial, so you do need to check with a tax advisor before deciding to make
voluntary contributions and claim a deduction.

In
additional to these new announcements, for more info on how to use your super
in the future for your first home deposit (1 July 2018), check out the
news here


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 product.

A Product Disclosure Statement for Raiz Invest and/or Raiz Invest Super are available on the Raiz Invest website and App. A person must 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.

The information may be based on assumptions or market conditions which change without notice. This could 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 Invest or Raiz Invest Super.

Past return performance of the Raiz products should not be relied on for making a decision to invest in a Raiz product 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.

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