tipping point – Michmutters
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Business

Investing, tax, super, property: Money mistakes 40-somethings make

Your 40s is an exciting time when it comes to wealth building, as this is the time most people reach the tipping point on their journey to financial independence.

But you have to get it right. If you don’t, you’ll be playing catch-up in future years and likely will need to make sacrifices.

In this piece, I cover the key money areas you should be focused on in your 40s to drive success.

Automate your saving success

Your 40s will be close to your peak earning years, and will likely be your peak borrowing years, so being on top of your savings and cashflow is important.

From a savings perspective, when you’re earning bigger dollars the difference between doing OK and doing great is huge. If you don’t already have a good savings system in place, now is the time to make it happen.

You should be looking to automate your money management, have all your bills and commitments provided for and paid without you having to think about them, and to have your savings building automatically.

Having a good savings system is important so you’re crystal clear on how much money you have available to direct wealth building strategies. Particularly given your 40s are likely to be your peak potential borrowing years, having total clarity on your “free cash” number will give you the confidence to take full advantage of your ability to grow wealth through borrowing.

investment

By the time you get to your 40s, you should already have some good experience with investing and have a foundation of quality investments in place. If not, this should be your first priority.

There are a lot of different opinions (and ways to be right) on the best way to invest, but the statistics show us that passive index funds perform best 95 per cent of the time. My view is that passive investments are an extremely effective way to build wealth while minimizing risk.

If you’re really drawn to interesting investments (read: crypto, start-ups, etc), with higher potential returns and higher risk, it’s important in your 40s you have clear boundaries for how much of your portfolio you want to hold in these sort of riskier investments.

My view is that you probably don’t want to hold more than 10 per cent of your investments in this bucket, and skipping them altogether to focus on the more boring but highly effective investments like index funds will serve you well.

Property

Your 40s are going to be your peak borrowing years, with higher incomes and a long time until retirement age (as defined by the banks and lenders).

Risk management is critical, but in my opinion leverage is a highly effective way to build wealth relatively quickly – and something you should look to go “all in” on in your 40s.

I’m not saying you need to rush out and buy 20 properties, but having a good quality investment property, or properties, behind you in your 40s will do some magic in future years.

It’s important when you’re borrowing at higher levels that your plan around this is rock solid – you don’t want to be caught out by higher interest rates, rental vacancies, or unexpected expenses that can throw a spanner in the works.

If you’re going down this path, take the time to map out your game plan and consider investing in some good quality financial advice so you know all your bases are covered and that you can execute and drive the results you want with confidence.

tax

In your 40s tax planning can mean the difference between success and mediocrity. Your income (and marginal tax rate) will be higher, and you’ll have more investments behind you generating taxable income that needs to be dealt with.

Having a smart tax strategy will pay big dividends.

You’ll want to look at where and how you’re holding your investments, if you’re part of a couple, who should own which investments, how to leverage the concessional tax rates in super, and whether you’ll benefit from using tax structures like trusts and investment companies.

You should also be looking at tax strategies like debt recycling, super contributions, and harnessing the power of franked dividends to cut your tax bill and boost your after-tax investing return.

Every dollar of tax you save is an extra dollar you can direct back to your wealth building, ultimately helping you get ahead faster and easier.

Super

The effort you put into super in your 40s will be a big driver of your success in future years.

With a higher income and (relatively) limited time to retirement, you should be looking to maximize the tax deductible “concessional” contributions to super every year. The current limit for these contributions is $27,500 including money contributed by your employer.

If you haven’t been maximizing your super contributions in previous years, you can also “catch up” on up to five years worth of contributions, generating some serious tax deductions and getting a heap of money into the low tax super environment.

Maximizing your super contributions through your 40s will ensure you go into your 50s with a solid amount of investments behind you that can grow well over the decades to come.

Insurance

In your 40s your income and financial commitments will likely be at their highest levels, and because you still have some time to reach the typical retirement age, it’s likely you’re still heavily reliant on your income to get you to where you want to be .

I get that most people don’t like and often don’t trust insurance, but in my opinion this is something everyone should have until they’ve reached complete financial security.

Income replacement insurance premiums are tax deductible, and having this cover in place will give you peace of mind that the unexpected isn’t going to sabotage your money success.

Be aware that not all insurance is made the same, and cheapest is definitely not best when it comes to protecting your wealth. Insurance is incredibly complicated and can be confusing, so if you’re considering putting insurance cover into place you’ll benefit from getting some good advice.

The wrap

Your financial potential is still yet to be unleashed in your 40s, and the work you put in here will dictate how far you can go in future years. But it won’t just happen on its own – you need to be firmly in the driver’s seat here.

You should go into your 40s with a solid plan, revisit it regularly, and keep your focus as you move forward achieving your money milestones.

Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth www.pivotwealth.com.au, and Author of the Amazon best-selling book ‘Get Unstuck: Your guide to creating a life not limited by money’.

Ben has just launched a series of free online money education events to help you get on the front financial foot. You can check out all the details and book your place here.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your

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Categories
Sports

Cameron Smith smashed for ‘cowardly’ LIV Golf Series response, world view, reaction, video

Cameron Smith’s imminent defection is being viewed as the biggest “coup” to date for LIV in their quest for legitimacy.

Until now, The PGA Tour and its supporters could argue that the rebel league is merely a competition where washed up pros go to fill their bank accounts. No longer.

While tour veterans Phil Mickelson and Sergio Garcia were the initial names linked to the financially lucrative competition, the domino effect can’t be denied.

Brooks Koepka, Bryson DeChambeau and Dustin Johnson – three of the biggest names on the US PGA – have taken the money and left.

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Cameron Smith's pending defection to LIV Golf has been met with a mixed reception.  Photo: Getty Images
Cameron Smith’s pending defection to LIV Golf has been met with a mixed reception. Photo: Getty ImagesSource: AFP

Smith’s signing however is being seen as a game-changer.

At 28, he is only now coming into the peak of his powers, he is the most recent major winner and he overran Rory McIlroy, the biggest name in world golf since Tiger Woods, to claim the Open Championship.

Nonetheless, Smith’s pending defection, which the Australian remained coy about ahead of the FedEx Cup playoff opener, hasn’t been filled with overwhelming excitement and a popping of corks.

Indeed, there’s an overarching sense of disappointment, inevitability and sadness about Smith’s likely defection; financial security has won over legacy and moral compass.

McIlroy reveals tension with LIV golfers | 01:30

Writing for the UK Telegraph – the same publication that broke Smith’s defection on a deal worth more than $AU140 million – chiefs sports writer Oliver Brown emphasized that Smith’s defection “might” capture an audience that eventually garners a TV deal.

“His signing is arguably the Saudis’ most significant coup to date, and could represent a tipping point for the competition – a moment where a gilded freakshow turned into a sporting event which might demand the world’s attention,” Brown wrote.

At the heart of the appeal of LIV Golf, Brown hit the nail on his head when he revealed the ridiculous sums of money today’s stars were forgoing by resisting a move from the PGA Tour.

“Against this backdrop, you can see why the initial contact from Greg Norman, LIV’s ringmaster, became an offer Smith could not refuse,” he wrote.

“(Henrick) Stenson, a 46-year-old who has failed to reach the weekend in seven of his last nine majors, is the type of player he should be beating for breakfast. And yet the Swede, quickly forgetting his defenestration of him as Ryder Cup captain, earned more for a glorified three-day exhibition at Bedminster than Smith did for winning the 150th Open at the Home of Golf.

“From Smith’s perspective, this is an imbalance that urgently needs correcting. If he takes home the maximum loot of £3.93 million on his LIV debut in Boston next month, he would eclipse even the £2.98 million he earned at the Players Championship in May, in what was then the richest prize ever offered by a single golf tournament. Why should the leading man tolerate making less than some forgotten members of the chorus line?”

Cam Smith and others set to join LIV | 01:30

Brown continued by highlighting the ridiculous Saudi-funded money on offer but said the sheer financial sums couldn’t, at least at this point, match the theatre, drama and excitement on show at the PGA and DP World Tours.

“The numbers are so absurd, the golf itself has been rendered a sideshow. When Stenson holed the decisive putt at Bedminster, for the grandest payday of his career, the moment was greeted by the faintest rustle of polite applause. Even the winner himself did not look unduly bothered,” Brown wrote in The Telegraph.

“Here lies the sadness in Smith’s defection. With his talent in the fullest bloom, he deserves to be playing in front of the largest galleries, for the highest stakes. LIV ultimately offers him neither. It is a realm with all the money but none of the prestige. Smith, you sense, understands what true glory in golf means. As he gave his acceptance speech on the 18th green at St Andrews, the Claret Jug in his hand, the quaver in his voice suggested he was genuinely overwhelmed.

“For Smith to be swapping such moments for hollow, show-me-the-money exercises is a cause for lament. At one level, his departure from him in his prime from him demonstrates the scale of the Saudis’ ambitions. But at another, it is the grimmest possible reflection of the schism they have wrought.”

READ MORE

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Australia’s Cameron Smith’s decision not to answer whether he is joining LIV has been described as “cowardly” and “lame”. Photo: Getty ImagesSource: AFP

At the USATodayAndy Nesbitt, was far more scathing.

In particular, the publication took aim at Smith’s decision to deflect questions around his future and offer no definitive answer on whether he intended to shift allegiances.

“In doing so, (Smith) tarnished a reputation that just a few weeks ago was one of the best in professional golf,” Nesbitt wrote.

“Smith didn’t deny it and he didn’t confirm it, he just said he had “no comment” on that, which is a really lame way of ducking the question while also pretty much confirming the report to be true.”

Nesbitt went as far as saying his responses were “cowardly.”

“But to not come out with a definitive answer when asked about it before the start of the PGA Tour playoffs is a pretty cowardly thing to do.

“Now it’s a little harder to cheer for a guy who just a few weeks ago was the coolest golfer in the world.”

Terse Cam refuses to address LIV rumors | 00:43

Thomas Kershaw from The Timestoo, wrote that Smith’s pending defection was the competition’s “biggest coup”.

“It has been very easy up until now to dismiss the gimmicks of LIV’s format — featuring shotgun starts, 54 holes and no cuts — as a watered-down exhibition lacking the essentials of elite competition. Critics could point to the players who shrugged off missed putts knowing their money was guaranteed beforehand and the rebel series was derived as a refuge for those who had cashed in on the twilight of their careers,” Kershaw wrote.

“The signing of Smith is a significant riposte to that narrative. LIV may already have a horde of relatively recent major champions but Bryson DeChambeau and Brooks Koepka have battled injuries and indifferent form while Phil Mickelson still seems a ghost of his former self. Smith, 28, is the first to defect who is not just at the peak of the game but still entering the prime of his own.

He continued: “Smith remains LIV’s biggest coup to date and also symbolizes another aspect of their revolt that could bring considerable success. Smith had been vocal in urging the PGA Tour to bring a major golf event back to Australia but while those calls fell on deaf ears, LIV — and Norman — have been only too keen to hear them. When LIV expands into a 14-tournament league next year, it is reportedly scheduled to stop in Sydney in April, where Smith is expected to feature in an all-Australian team.”

Australian Cameron Smith is coming under renewed scrutiny ahead of the FedEx St. Jude Championship at TPC Southwind on August 10, 2022 in Memphis. Photo: Getty ImagesSource: AFP

Closer to home, James Erskine, the former manager of the late Shane Warne, who also managed Greg Norman in the past, told The Sydney Morning Herald the emergence of LIV was “destabilizing”, but didn’t accept the argument that players had blood on their hands given the competition is being backed by Saudi Arabia.

“It’s destabilizing the fabric of professional golf. I’m on the board of the PGA of Australia and we have to look after all professionals and professionals coming up. They all start as amateurs somewhere and are nurtured through the pathway so they could play golf, and then they get cards and qualify professionally,” he said. “So many people do business with Saudi Arabia and the Middle East, where they have very different rules and regulations and different respect for women.

“But you can name just about any company and they will probably have a link to Saudi Arabia, Rolex, Range Rover, Rolls Royce, Ferrari. Everyone’s doing business with them, so I think it’s very unfair to turn around and say because you’re a professional golfer, you shouldn’t deal with Saudi Arabia.”

Meanwhile, Erskine said Smith would be welcomed to play in Australia even if he joins LIV Golf.

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Categories
Sports

Newcastle Knights, Adam O’Brien, squad, roster, management, players, David Klemmer

The Newcastle Knights and their coach Adam O’Brien are at a crossroads after a horror season that could see them go from the finals to the wooden spoon in one year.

The Knights have the worst defensive record in the NRL and their attack is not much better with the pressure ramping up on O’Brien to keep his job amid turmoil and player unrest at the club.

Paul Kent believes the recent changes to the club’s football department is evidence that the Knights desperately need to change the way they operate in time for next season.

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“This is a touchstone moment for Adam O’Brien,” Kent said on NRL 360.

“His career now is at a tipping point. After the season they have had where they have shown no improvement on the two previous seasons. In fact they have gone backwards.

“You have got player unrest. You have got a club that is trying to turn things around.

“Phil Gardner has moved himself away from much of the football operation, which he needed to do because he was inexperienced and after putting his toe in the water for 18 months he failed to come up with what they need.

“They have got a rookie football manager in Danny Buderus, who has suddenly been pushed sideways to bring in Peter Parr. They are trying to start the turnaround.

“Adam O’Brien has realized that he is either part of the solution or part of the problem and it starts now.”

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Knights coach Adam O’Brien.Source: Supplied

Phil Rothfield revealed O’Brien admitted he has eight weeks next season to turn things around, but Kent believes that might be generous, given their current predicament.

“Buzz said he has six to eight weeks next year,” Kent said.

“I don’t think he has got that because if the Knights find out eight weeks into next season that they have made a blue, then next season has gone as well.

“Adam O’Brien touched on in that press conference that their summer training was not up to speed this year as it should have been.

“He said, that is the one thing he would like to get in order going into next season. That’s where it starts for them next season. It begins for him now.”

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Klemmer sanctioned for abusing trainer | 02:55

Kent accused the Knights of being too soft on their players in the wake of the decision to reprimand David Klemmer.

“It began it appears today with David Klemmer and let’s talk about player discipline and how players buy into what is going on at teams,” Kent said.

“David Klemmer is known for not wanting to go off the field. Let’s cop that. It happened at Canterbury. It has happened before.

“But we talk about Brandon Smith and what Melbourne have done to him since he got sin-binned and suspended a couple of weeks back and how they drive their discipline, which Adam O’Brien has been aware of.

“I think for too long up there he has been running a soft ship and they basically have been taking the mickey out of him, so I think that is where it starts.”

Is O’Brien under pressure at Knights? | 05:59

The Daily Telegraph’s Dave Riccio agreed O’Brien’s future is on thin ice, given they are unlikely to win another game in 2022, with the wooden spoon a real possibility.

“I think Adam’s coaching career is right on the precipice,” Riccio said.

“Don’t forget this Newcastle Knights side can still get the wooden spoon. They play the Tigers this weekend.

“If they lose to the Tigers you can bet your bottom dollar the heat will be turned up.

“They then play the Broncos away. They play the Raiders at home. The Titans away and they finish with the Sharks at home.

“I haven’t got the Knights winning any of those games.”

Kent believes the introduction of Parr as the club’s director of football means that Phil Gardner will no longer have the final say on O’Brien’s future.

Inside Klemmer’s failed move to the Eels | 02:08

“Gardner has no longer got the say,” Kent said.

“Parr will have the say. Parr will sit there over summer and if he decides things aren’t looking the way they need to look, he can still find himself a coach.

“He has got trainers and strength and conditioning coaches in from the Roosters and the Panthers and everywhere else. They are in good hands there.”

Riccio agreed the board will decide who the long-term coach will be based on a recommendation from Parr.

“I think it will come down to the board,” Riccio said.

“I think Peter Parr has been put there for a reason. Not only for his experience and know how, but I believe he can make a tough call.

“And Gardner can remove himself from what has been a car crash since he got there.”

In light of O’Brien’s comments that he has seen what success looks like at the Storm and the Roosters, Kent believes it is time for less talk and more action at the Knights.

“At some point you have got to start living the standard and not talking the standard,” Kent said.

“I think for too long at Newcastle they talk about what they want to do.

“It has been going on for too long where they just basically pull the shades down over everybody’s eyes and say, don’t worry about us we are going OK, when in fact they are not doing what Newcastle are known for, which is playing tough, hard football and being constantly competitive.”

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Categories
Entertainment

Meghan Markle is the victim of bullying, Trisha Goddard says

Meghan Markle has made headlines recently for her alleged acts of “bullying”, and in the process has copped a substantial amount of vitriol.

But now the tables have been turned in a Channel 9 60 minutes segment that dug deep into the latest royal scandal involving the claims that the Duchess of Sussex intimidated and belittled her staffers.

When the allegations first emerged, Buckingham Palace announced it was conducting an inquiry, but it has since said it won’t release the findings. It’s a curious move that’s left many puzzled. What did they discover, that they don’t want us to know about?

And could it be that the facts actually reveal instead of being the bully, Meghan is the one who’s been bullied?

In the segment, 60 minutess reporter Tom Steinfort asked British television host Trisha Goddard, a rare and staunch supporter of the Duchess of Sussex: “Who do you think is the victim of bullying?”

“Meghan Markle,” replied Trisha Goddard, who was also a former Australian TV star featuring on such shows as Play School.

“They can’t go too all out on Prince Harry, so let’s go for the evil scheming woman, that whole thing about women taking men away and driving them somewhere and destroying them. I mean how misogynistic is that?

“I think what’s she done wrong is not to be of the correct stock. I think what she’s done wrong is to be an American, to be an outsider… also she she’s a strong woman.

“I’m not saying she’s perfect, but I’m sorry but Prince Andrew doesn’t get as much consistent vitriol.”

Steinfort then asked: “So what do you think is at play here – is it sexism, racism, or a heady combo of both?”

To which Goddard replied: “It’s all those and above. We know through the polling that the Sussex’s poll highest among youngsters, under 25s.

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“It’s the dinosaurs screaming when it comes to an outsider, and a female, and a female of color, then that is something that you are going to come down on because it shouldn’t be allowed,” she said on 60 minutes.

When asked if she noticed a pattern in the kind of people that attack Meghan, Goddard said: “Yeah. White, male, pale and stale”.

“Can we just stop messing around and call this for what it is – it’s bullying.”

She said it’s quite baffling why Prince Harry and Meghan are loved in America, but there’s so much controversy around them from the Brits.

“In the US people really like them they – they can’t understand what’s going on in Britain other than snobbishness, and I’m sure there’s a lot of that going on.

“You can’t blame them if they want to stay in the States can you?”

However, the bullying claims continue to swirl around Markle.

Also featured on the 60 minutes segment was Valentine Low, the royal correspondent for UK newspaper The Times. He said it was Meghan’s explosive Oprah interview that was the tipping point for several palace staffers who decided to reveal their claims of bullying to the world.

“What I was told was that in late 2018, Jason Knauf, who was Harry and Meghan’s communications secretary – so one of their very closest advisers – sent an email to his boss saying that Meghan had been bullying staff,” Mr Low said.

“He said that a couple of members of staff had been driven out by Meghan’s behaviour. and

he was also concerned for how much pressure was being put on their private secretary, their

very closest adviser, an Australian woman called Samantha Cohen.

“Now this was an explosive allegation, but the point is, nothing happened,” he said.

He said the palace simply didn’t know what to do.

“They didn’t know how to cope with such an unusual situation, and they didn’t know how to cope with Meghan.”

Read related topics:Meghan Markle

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