On the Money

We need to modernise how we measure national wealth

I recently tried an experiment. I changed several light bulbs, and since one required a little rewiring, I sent my wife (also known as the majority shareholder) a bill for $110.50 (plus GST). In return, she sent me a bill…

A crisis of underinsurance threatens to scar rural Australia permanently

Australia is in the midst of a bushfire crisis that will affect local communities for years, if not permanently, due to a national crisis of underinsurance. Already more than 1,500 homes have been destroyed – with months still to go…

The price of staying at home

Regardless of where they live, investors have a significant opportunity to diversify their equity portfolio outside of their home market. Despite the opportunity, investors typically maintain a significant home bias – higher allocations to their home country than the market…

Limiting cash payments to $10,000 is more dangerous than you might think

We are used to being able to pay for things with legal tender. Other than in special circumstances, refusing to accept cash can have legal consequences. The Currency (Restrictions on the Use of Cash) Bill 2019 , at present before…

The great wealth transfer: the risks and opportunities for advice firms

Australia, like the rest of the developed world, is on the verge of the largest intergenerational wealth transfer in history. It’s estimated more than $3 trillion will change hands over the next 10 to 20 years as the Baby Boomer…

We’re delaying major life events and our retirement income system hasn’t caught up

Asked to conduct an independent review of Australia’s retirement income system, the panel appointed by treasurer Josh Frydenberg reported on Friday that it was all tied up with the family home. At every age range, Australians have more money saved…

The robbery of the century

It has been called “the robbery of the century”. Martin Shields and Nicholas Diable, two British investment bankers, are on trial in Germany for helping structure a massive tax evasion scheme, known as cum-ex trading, that has siphoned up to…

Does monetary policy work any more?

In its latest quarterly statement on monetary policy, the Reserve Bank of Australia declared its preparedness to “ease monetary policy further if needed”. This suggests the bank still thinks monetary policy – in this case lowering interest rates to stimulate…

Six positive catalysts that could surprise investors

Over the last year, 10-year German Bund yields have gradually declined. Investor sentiment deteriorated over the course of this period as the US-China trade dispute dragged on, taking global growth down with it. Policymakers failed to adequately address the consequences…

The rise and fall and rise again of businesses serving more than just their shareholders

What’s the purpose of a business? For a long time, the textbook answer to that question has been purely “to make as much money as possible for its shareholders”. But business leaders – who often themselves get huge payouts from…