Pittwater Life December 2018 Issue

Business Life: Money
Business Life
Good 5 reasons reason ‘Middle for going Oz’
‘nuts’ is in the this sights festive of season Labor
When With a writing federal about election
financial only six months innovation away one
of let’s the look perspectives at how the I
can middle share class with are you firmly is from in the
inside sights of a Labor fintech leader company Bill
which Shorten… in my case has been
rolling Our politicians out the fast-growing are an
Acorns interesting app. lot, Since regardless launching of
in their Australia persuasion. in early Take 2016 Barnaby the
app Joyce now for resides example; on the recently smart
phones faced preselection of around 350,000 for his seat
Australians, and the moment that’s that roughly process 1.5%
of was the over population. the hubris went into
the If back you’re pocket in the and dark about came
what the humility I’m talking – “it’s about, an incredible
a micro honour investment to be able platform to serve
Acorns
is
or this what’s nation.” sometimes He said, called over and a
‘round-up’ over in the app, media. the (I first presume one
of he its meant kind that in Australia. it’s an incredible
honour along with to be our able partners to serve
Our
firm
brought the nation it out from from the the chairman’s US
in lounge 2015 of where the Qantas it had been terminal?)
established Bill Shorten for will a few say years. very
similar The app words works on election in a couple night
of six ways: months by taking from now. a data But as he
feed offers from you, your the voter, spending his warm
accounts embrace and promises rounding up to govern
for all Australians you make to (especial-
the
the
purchases
nearest ly those dollar upstanding investing members
these of accumulated CFMEU), rest balances assured his
into other a hand mix of is exchange reaching around traded
funds for your listed wallet. on the ASX, or,
by Regardless you debiting of an our amount politicians’ or
regular political payment leanings, from they your all share
bank the remarkable account to ability your Acorns to be unrelatable
to Most the users middle enjoy class the of
account.
Australia while simultaneously
draining it of cash.
When the belt needs tightening
it’s the middle that feels
the squeeze – think back to
round up feature of Acorns as
it allows them to save while
they spend. As a parent of
teenagers I think I’ve come
to the conclusion that apps
such as Acorns using a blend
of psychology and technology
may be the only effective way
to get modern kids to save
because they sure do know
how to spend.
Acorns works because the
principles underlying its design
Labor’s health insurance rebate
changes in 2012 or the Liberal’s
changes to age pension thresholds
in 2017. The interesting
thing with Shorten is that he is
approaching the next election
with a series of policies
that are little more than barely
disguised attacks on middle
are Australia. firmly rooted in behavioural
finance: I have briefly investing mentioned small
amounts these Labor on a election regular basis promises
in be previous missed combined articles; there with
that
won’t
investing are five main over an ones: extended
period 1. Restrict of time negative to average gearing to
into new the homes markets only; smoothing
out 2. Remove peaks and dividend troughs. franking Of
course cash it refunds; doesn’t hurt that it
does 3. Tax all all of discretionary these things trust within
the distributions framework of at a 30 highly per cent;
4. Repeal the company tax cut
for businesses with revenue
of up to $50 million; and
5. Halve the capital gains tax
discount from 50 per cent to
attractive and functional user
interface – fancy words for the
app looks and feels very cool.
While these principles have
proven to be sound over time
Acorns goes on to provide an
indirect benefit to its users
in the form of education and
improved financial literacy.
Get two or more people in the
room who have an account and
you’ll find out what I mean –
when did you start? What are
25 per cent.
With the space available
we’ll only consider the first
two items. Items 3 and 4
are straight out attacks on
thousands of small businesses,
the changes foreshadowed
for trusts means that many
operating through a discretionary
saving family for? trust What for returns asset
you
have protection you had? will It’s need inherently to consider
competitive restructuring but their when affairs it’s going
combined forward. The with final the item, tools changes
to the capital that gains the app tax
and
information
provides discount, it’s will also make extremely the effects
informative of negative gearing – as a regular changes user on
you dwelling can’t prices help but even become worse.
more informed about the
behaviour Restrictions of markets to whether
you negative are looking gearing to or not – the
Negative gearing is not so much
a tax policy in Australia as it is
a form of religion practised by
more than 1.2 million of us. The
last person that tried to tinker
with Brian Hrnjak
balance with the of policy your was Acorns Paul account Keating
rises and that and pretty falls in much line with ended the
movements in tears. Labor’s in markets proposal during is to
the allow course negative of the gearing trading only day. on
new One properties, of the challenges existing investors
finance will have app their would current have situa-
any
encouraging tions grandfathered. young people The Labor to
save policy and will invest also affect is to remain the ability
relevant to negative in their gear eyes. shares Over which
the may past impact year on a number about 80,000 of
enhancements more people. have taken place
following The rationale user feedback, for the policy the
headline according ones to Labor being: treasury
Found spokesman Money Chris partners Bowen – is users to
can “put shop first home online buyers with brands on a level
playing as Bonds, field Dan with Murphy’s, investors”
such
BCF, and “bringing Uber etc. and the dream these of
partners owning a usually home back deposit in to bonus reach
amounts of many ordinary extra round Australians”. ups
into All good the users motherhood account; stuff;
My however, Finance he’s feature going – to uses achieve
artificial this goal intelligence by dropping to the track price
and of homes, categorise all of spending them. and
calculate Removing free a cash layer flow; of buyers,
Super in this fund case investors, linkages – from allows the
users property to make market deposits will adversely to a
range affect of prices industry and it and will public affect
offer the price superannuation of both new funds; and
Emerald second-hand Portfolio dwellings. – a socially
responsible Something portfolio like 70% option of the
introduced 1.2 million taxpayers following member who
feedback; negative gear only do so with a
Little single Acorns property. – sub This accounts statistic is
designed relevant to understanding allow investment the
on impact behalf of of the children Labor policy or other on
dependants the majority under of property the age investors.
The wealthiest, presum-
of 18.
ably those with multiple dwellings,
will be able to offset their
gearing losses with any income
gains on their other properties
56 60 DECEMBER 2017 2018
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