Three months after moving in together, Tom discovered his partner had $18,000 in credit card debt. She thought he knew. He assumed everything was fine. The argument that followed wasn’t really about the debt; it was about trust.

Research from eharmony found that 58% of Australian couples cite money as their biggest cause of fights¹, yet one in ten admitted to hiding secret credit cards, bank accounts and debts from their partner. That’s a lot of relationships built on financial landmines.

Here’s the conversation that could save your relationship.

The Money Talk: What you need to discuss

Before you sign that lease or hand over the keys, sit down somewhere comfortable and work through these topics:

Your financial reality check

• Current debts (credit cards, HECS, personal loans, car finance)
• Savings balances and emergency funds
• Income (including irregular income like bonuses or commissions)
• Credit scores and any credit issues
• Regular expenses and financial commitments

Your money values and habits

• How you were raised to think about money
• What does financial security mean to each of you
• Spending priorities (experiences vs. possessions)
• Attitudes toward debt and saving
• Financial goals for the next 1, 5, and 10 years

The uncomfortable stuff

• Any financial support to family members
• Existing child support obligations
• Previous bankruptcies or significant financial mistakes
• Different earning capacities and how that feels

Financial

Creating shared financial goals

You don’t need identical money values, but you do need shared direction. Here’s how you can approach it:

• Start with your individual dreams. Each partner writes down their top three financial goals. Maybe it’s buying a home, travelling Europe, starting a business, or retiring early. Share them without judgment.
• Find your common ground. Where do your goals overlap? Where do they conflict? The goal isn’t to convince your partner your priorities are right; it’s to understand where you want to head and why.
• Build your joint roadmap.
  • Short-term (0-12 months): Emergency fund target, debt reduction, savings goals
  • Medium-term (1-5 years): Major purchases, deposit savings, career changes
  • Long-term (5+ years): Property ownership, retirement planning, family planning
• Review regularly. Money conversations aren’t one-and-done. Schedule quarterly financial check-ins to track progress and adjust goals as life changes.

Managing individual and joint expenses: The practical stuff

There’s no perfect system, only what works for your relationship. Here are the main approaches:

• The 50/50 split. Each person contributes equally to shared expenses. Simple, but doesn’t account for income differences.
• The proportional approach. Contributions match income ratios. If you earn 60% of the combined income, you pay 60% of the shared costs. Fair but requires transparency.
• The “yours, mine, ours” method. Three accounts: individual accounts for personal spending, one joint account for shared expenses. Research shows married or committed Australians save significantly more monthly ($857) than single counterparts ($570)², suggesting combined finances can work if done right.

Key rules regardless of your system:

• Define what counts as “shared” expenses (rent, groceries, utilities vs. gym membership, coffee, clothing).
• Agree on a discretionary spending threshold that requires discussion.
• Maintain some individual financial autonomy.
• Contribute proportionally to emergency savings.
• Be transparent about financial changes (job loss, unexpected expenses).

The bottom line

The financial conversation isn’t romantic. It won’t give you butterflies. But it will give you something better: a foundation of trust, transparency, and shared direction.

Money doesn’t have to be the biggest source of conflict in your relationship. Have the conversation now, before the stakes get higher and the resentments set in. Your relationship deserves that honesty.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 Money the biggest cause of conflict for 58% of couples, says eharmony
2 3.6 million Australians admit to dating for financial security | Finder

Last month, Sarah broke her ankle playing netball on Saturday afternoon. Without the ability to drive or stand for long periods, her job’s impossible right now. Workers’ compensation? Won’t touch it. Why? The injury didn’t happen at work.

She’s one of the lucky ones. She has income protection insurance.

According to Insurance Watch, fewer than one in three working Australians have income protection insurance¹ despite most being able to claim the premiums as a tax deduction.

That’s a lot of Australians one accident away from financial stress.

The workers’ comp reality check

Here’s what catches most people off guard: 75% of injuries in Australia happen outside of work².

Workers’ compensation only covers you if:

• The injury or illness occurred at work.
• You can prove it was work-related.
• You’re an employee (not self-employed or a contractor).

According to the Australian Bureau of Statistics, 47% of Australians who suffered a work-related injury or illness received no financial assistance in 2017/18³. Even when it should apply, workers’ comp doesn’t always deliver.

Income protection, by contrast, can cover:

• Work-related injuries AND injuries anywhere else.
• Illness (cancer, heart disease, mental health conditions).
• Self-employed individuals and contractors.
• Accidents on holidays, at home, or while playing sports.

Think of workers’ comp as a narrow safety net with holes. Income protection is the safety net underneath that catches what falls through. Income protection can be held within your superannuation account, with the premiums being deducted from the superannuation account OR personally, with premiums being funded by your cashflow.

Who needs income protection?

You’re a prime candidate for income protection if you:

• Are self-employed or a contractor
  You have zero workers’ comp coverage and no sick leave. Income protection can be critically important if you’re self-employed or a small business owner, as you may not have sick or annual leave.
• Have a mortgage or significant debts
  Your income disappears, but your repayments don’t.
• Support a family financially
  School fees, groceries, insurance premiums and medical bills keep coming regardless of your work status.
• Work in higher-risk occupations
  Tradies, healthcare workers, and anyone doing physical work, as you’re statistically more likely to need this.
• Have minimal sick leave
  Two weeks of sick leave won’t stretch to cover a serious illness or injury.

The numbers: What does it actually cost?

Here’s where it gets interesting. According to Finder’s analysis of 11 major Australian insurers, the average monthly premium for a policy with a $3,000 monthly benefit is $48.06⁴.

For a 35-year-old office worker, that’s typically between $30 to $50⁵ per month for basic coverage. However, carpenters pay around 77% more on average than office workers⁶ due to higher injury risk.

Here’s the critical part: Those premiums are generally tax-deductible when held outside of super. For someone on a marginal tax rate of 32% including Medicare Levy, that $50 monthly premium costs you around $34 after tax per month⁷.

The benefit? Income protection insurance can replace up to 90% of your pre-tax income in the first six months⁸, though most modern policies cover up to 70%. You can elect to have a benefit period of up to age 65 or shorter if you have a tighter budget for premiums.

Do the maths: If you earn $80,000 gross annually, that’s roughly $6,666 gross  per month. At 70% replacement, you’d receive about $4,666 gross  monthly. You’re paying $34 (after tax) per month ⁹ to protect an income of $4,666 per month. That’s a 137:1 return if you claim.

The quality factor

Not all income protection is created equal.

Recent industry data shows that the average claims acceptance rate for advised income protection insurance for 2024-2025 is 94.4%¹⁰, meaning policies arranged through financial advisers have high approval rates.

The average time for an income protection claim to be accepted was 1.6 months in 2024¹¹, with some insurers paying in as little as 1.3 months.

The bottom line

Workers’ compensation protects your employer. Income protection protects you.

The harsh reality is that most disabilities and illnesses that stop you from working aren’t covered by workers’ comp. You could be doing everything right, exercising, eating well, being careful, and still get blindsided by cancer, a car accident on your way to the shops, or a skiing injury on holiday.

Your income is probably your greatest asset. For less than the cost of a couple of coffees a week (after tax deductions), you can ensure that assets stay protected even when you can’t work.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 https://www.insurancewatch.com.au/insurance-claims-statistics.html
2 Workers Compensation Insurance versus Income Protection Insurance – Experien Insurance
3 Can I Claim Workers Compensation & Income Protection Insurance? | TAL
4 https://www.finder.com.au/income-protection/monthly-cost-of-income-protection
5 https://morganinsurancebrokers.com.au/what-is-the-average-cost-of-income-protection-insurance-in-australia/
6 https://www.finder.com.au/income-protection/monthly-cost-of-income-protection
7 Assumptions: Gross annual income of $135,000, personal income tax rates and thresholds for the FY 2025/2026.  
8 Income protection insurance – Moneysmart.gov.au
9 Assumptions: Gross annual income of $80,000, personal income tax rates and thresholds for the FY 2025/26.
10 2025 Life Insurance Claims & Disputes Statistics
11 https://www.insurancewatch.com.au/insurance-claims-statistics.html

Margaret’s decision

At 62, Margaret stood in her four-bedroom family home in the northern suburbs, surrounded by decades of memories. With her children settled elsewhere and retirement approaching, the house felt too large. When her financial adviser mentioned the downsizer contribution scheme, Margaret discovered an opportunity to transform her property into a tax-efficient retirement strategy.

The opportunity

Australians aged 55 and over can contribute up to $300,000 per person from the proceeds of a home sale into superannuation, creating a powerful wealth transfer opportunity. For couples, this represents a potential $600,000 boost to retirement savings.

Three key benefits

1. Tax advantages: Downsizer contributions are tax-free and don’t count towards annual contribution caps. When you move super into the retirement pension phase, the transfer balance cap applies (currently capped at $2 million), giving you greater capacity to convert accumulated super, including downsizer contributions, into tax-free pension income.
2. No age ceiling: Downsizer contributions provide a rare opportunity to top up retirement savings regardless of your work status or existing super balance. You need to be aged 55 and above at the time of making the contribution, but there is no upper age limit unlike personal contributions.
3. Eligibility requirements: The property must have been owned by you or your spouse for at least 10 years and qualify for a full or partial capital gains tax exemption under the main residence rules. Contributions must be made within 90 days of settlement, requiring careful planning and coordination with your super fund. An ATO election form must be completed to ensure the contribution is being reported as a Downsizer contribution.

Four potential downsides

1. Transfer Balance Cap and Age Pension Impact: Downsizer contributions count towards your transfer balance cap if you decide to commence an income stream. These contributions are also assessed under Centrelink’s assets and income tests, potentially reducing Age Pension eligibility. An exemption may be applied if you are under age 67 at the time, and receiving other payments or benefits, and the contribution is being retained in the accumulation phase of super account.
2. Hidden Costs: Sales commissions, legal fees, moving expenses, and stamp duty on new properties can substantially reduce the amount available to contribute. In capital cities particularly, downsizing to a smaller property may not release significant equity.
3. One-time only: You can only make a downsizer contribution once in your lifetime, making timing crucial.
4. No tax deduction: Unlike concessional contributions, you cannot claim a tax deduction for downsizer contributions.

Margaret’s outcome

Margaret sold her home for $950,000 and purchased a two-bedroom apartment for $580,000. After costs, she contributed $300,000 to her super, where her money would grow tax-efficiently. While her future Age Pension entitlement decreased slightly, the long-term benefits, including tax-free investment earnings, made the strategy worthwhile for her circumstances.

The bottom line: The downsizer contribution offers significant opportunities, but requires careful consideration of your personal circumstances, Age Pension eligibility, and long-term financial goals.

Professional financial advice is essential before proceeding.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

Managing your money doesn’t have to feel overwhelming. Suppose you’re in the accumulation phase of life. In that case, whether you’re building your first emergency fund, saving for a home deposit, or growing your super, the 50/30/20 rule offers a straightforward framework that can work with any income level.

Understanding the framework

The 50/30/20 rule divides your after-tax income into three clear categories: 50% for ‘needs’, 30% for ‘wants’, and 20% for savings and debt repayment. Your needs include essentials like rent or mortgage payments, groceries, utilities, insurance, and minimum debt repayments. Your wants cover everything that enhances your lifestyle—dining out, entertainment, holidays, and streaming subscriptions. The final 20% goes toward building your financial future through savings, investments, or paying down debt faster.

Adapting to your income

The beauty of this framework lies in its flexibility. Whether you’re earning $50,000 or $150,000 annually, the percentages scale with your income. Start by calculating your monthly after-tax income, then multiply by 0.5, 0.3, and 0.2 to find your targets for each category.

If you’re early in your career or living in an expensive city like Sydney or Melbourne, you might find that necessities consume more than 50% of your income. That’s perfectly normal. The 50/30/20 rule is a guideline, not a rigid requirement. Consider it a goal to work toward as your income grows or circumstances change.

Making smart adjustments

Life rarely fits perfectly, and that’s okay. If your essentials exceed 50%, look for opportunities to trim costs without sacrificing quality of life. Could you reduce energy bills, find better insurance rates, or embrace meal planning? Small changes compound over time.

Similarly, if you’re carrying high-interest debt, you might temporarily shift some “wants” money into the savings category to accelerate debt repayment. Once you’re debt-free, you can rebalance and enjoy guilt-free spending within your 30% allocation.

The most common pitfall? Miscategorising wants as needs. That premium gym membership or daily coffee might feel essential, but honestly assessing your spending helps you make intentional choices rather than wondering where your money went.

Remember, building wealth is a marathon, not a sprint. The 50/30/20 rule isn’t about perfection; it’s about creating a sustainable approach that moves you steadily toward your financial goals while enabling you to enjoy life today.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

Retirement is the time to enjoy the fruits of decades of work, whilst ensuring your garden continues to provide for years to come. The art lies not in hoarding every bit of produce, nor in consuming it all at once, but in finding the right balance between present enjoyment and future security.

The gardener’s wisdom

Think of managing your retirement finances like tending a productive garden. A skilled gardener knows when to harvest, what to leave growing, and how to ensure the garden remains healthy season after season. You take what you need for today’s meals whilst preserving enough to keep the garden flourishing. Some seasons are abundant; others require more careful management. Your retirement nest egg works the same way. It’s about sustainable harvesting, not deprivation or excess.

Harvesting with intention

The foundation of a balanced retirement is aligning your spending with what truly matters to you in this stage of life. When you’re intentional about where your money goes—whether that’s creating memories with grandchildren, ticking off travel dreams whilst you’re able, supporting causes close to your heart, or simply enjoying daily comforts, every dollar spent feels purposeful rather than worrisome.

Finding your harvest rhythm means being honest about what brings you genuine satisfaction. Extreme frugality might leave the garden overflowing but rob you of the retirement you’ve earned. Conversely, harvesting too freely might bring short-term pleasure but long-term anxiety. The art is in the balance, building space for experiences and comforts that matter whilst preserving your financial security.

Creating sustainable systems

Research consistently shows that regular, thoughtful actions create the best long-term outcomes. Automation helps enormously here. When income streams from your super, age pension, or investments flow automatically, you create a steady harvest rhythm without constant decision-making. Your financial garden tends to itself whilst you focus on enjoying retirement.

Consider setting aside specific “baskets” for different purposes, regular living expenses, special experiences, unexpected needs, and long-term preservation. This structure helps you harvest confidently, knowing you’re taking care of both today and tomorrow.

Through changing seasons

Somedays you’ll feel energised to review your strategy and adjust your approach. Other times, you’ll want to trust your systems and simply enjoy life. Both are natural. A sustainable approach honours these seasons rather than demanding constant vigilance. Here’s where having a financial planner as your gardening companion can be invaluable, to help monitor your harvest strategy and keep your garden healthy.

Celebrating the abundance

Take time to appreciate what you’ve cultivated – whether that’s seeing your nest egg sustaining you comfortably, successfully funding meaningful experiences, or simply feeling secure about your financial future. Acknowledging your successful harvest, however modest, reinforces confidence in the balance you’ve created.

Your retirement harvest is uniquely yours. It will look different from that of your neighbours, your family’s expectations, or what you read about online. That’s not just acceptable – it’s essential. The garden that flourishes is one tended according to its own conditions, not someone else’s plan.

When you find your own balance between enjoyment and security, retirement transforms from a source of worry into the rewarding season you’ve spent a lifetime cultivating.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

Building an emergency fund is one of the most empowering financial decisions you can make. It’s your safety net, your peace of mind, and your buffer against life’s unexpected moments. If you’ve heard conflicting advice about how much to save, you’re not alone. Let’s take a few minutes to explore what makes sense for your situation.

The traditional 3-6 month guideline

You’ve likely encountered the standard advice: save three to six months’ worth of essential expenses. This range exists because everyone’s circumstances differ, and that’s actually helpful. Three months might cover your rent, groceries, utilities, insurance, and minimum debt payments during a job transition. Six months provides extra breathing room if you work in a volatile industry or have dependents relying on your income.

The key word here is essential expenses, not your entire income. Your emergency fund doesn’t need to maintain your current lifestyle; it needs to cover necessities while you navigate challenging times.

Personalising your target

Several factors should influence where you land on this spectrum. If you’re a sole income earner, work in a specialised field where new roles take longer to secure, or are self-employed, leaning toward six months (or even more) makes sense. Contractors and gig workers can benefit from larger buffers, given their income variability.

Conversely, if you’re in a dual-income household where both partners have stable employment, have minimal fixed expenses, or possess highly sought-after skills, three months might suffice. Those with reliable family support networks or multiple income streams can also feel confident with smaller reserves.

Health considerations matter too. If you have ongoing medical needs or dependents with special requirements, building a more substantial fund protects you from having to choose between health and finances.

The best home for your emergency fund

Your emergency savings should be immediately accessible but separate from your everyday accounts. Out of sight helps prevent temptation. High-interest savings accounts may be  ideal, offering both liquidity and competitive returns that help your money keep pace with inflation. Many Australian banks offer bonus interest rates when you meet monthly deposit conditions, making your emergency fund work harder.

Avoid investing emergency funds in shares or property. When emergencies strike, markets might be down, forcing you to sell at a loss exactly when you need that money most. In addition, there may be a delay in selling the shares or the property, limiting your access to capital.

Remember, building your emergency fund is a progressive journey. Start with $1,000, then aim for one month, two, then three. Each milestone deserves celebration, as you’re building genuine financial resilience.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

As we welcome 2026, it’s the perfect moment to reflect on the financial journey that was 2025, a year that tested our resilience and rewarded our patience. For Australian investors, 2025 brought its share of challenges and opportunities – from falling interest rates to market volatility and evolving superannuation rules. Taking stock of these experiences can help set stronger financial intentions for the year ahead.

The power of consistency over timing

One of the most valuable lessons from the past year is that consistent investing beats trying to time the market. Many investors who stayed the course through market fluctuations benefited from dollar-cost averaging, whereas those who waited for the “perfect moment” often missed opportunities. Whether contributing to your super or investing in shares or managed funds, regular contributions can smooth out volatility and build wealth over time.

Emergency funds aren’t optional

Every household needs a solid emergency buffer. Unexpected expenses, from car repairs to medical bills, can derail even the best-laid financial plans. Aim for three to six months of living expenses in an easily accessible high-interest savings account. With competition among Australian banks heating up, compare rates regularly to ensure your emergency fund is working as hard as possible.

Diversification remains your best friend

Investors who spread their risk across different asset classes, sectors, and geographies generally weathered market turbulence better than those heavily concentrated in single investments. The lesson remains clear: a well-diversified portfolio can provide crucial stability when specific sectors or regions face headwinds.

Review your portfolio allocation – does it still align with your risk tolerance, investment time frame and life stage? Consider whether your mix of Australian and international shares, property, bonds, and cash still makes sense for your circumstances.

Super deserves active attention

Your superannuation is likely your largest asset after your home, yet many Australians remain in default funds with higher fees and underperforming returns. The rate of Super Guarantee contributions increased to its final scheduled rate of 12% from 1 July 2025, marking the completion of a multi-year boost to retirement savings. Additionally, superannuation on Paid Parental Leave commenced from 1 July 2025, addressing long-standing gender inequities in retirement savings. These changes highlighted the importance of regularly reviewing your super as small increases compound significantly over decades.

Your financial goals need regular review

Life changes, and so should your financial plan. Perhaps you’ve changed jobs, started a family, or adjusted your retirement timeline. Set aside time this month to reassess your goals, update your budget, and adjust your investment strategy accordingly.

Starting the year with financial clarity creates momentum. Review what worked, learn from what didn’t, and approach the year ahead with informed confidence. Your future self will thank you for the intention you set today.

The experiences of 2025 reminded us that markets reward patience, discipline trumps timing, and preparation creates opportunity. Start 2026 with clarity about your financial objectives and the confidence that comes from learning through experience.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

Australia’s retirement landscape is changing. According to the Australian Bureau of Statistics, by 2032, there will be more Australians over 65 than under 18, marking a significant demographic shift. While we’ve built a world-class superannuation system worth over $4.1 trillion1, many retirees still struggle with a crucial question: how do I turn my savings into confidence?

The gap between saving and spending

The Superannuation Guarantee is now 12%, meaning retirees who have recently left the workforce are wealthier than any previous generation, but the transition to retirement often brings anxiety rather than excitement. According to Challenger’s recent Retirement Happiness Index, two in five Australians aged over 60 rank running out of money as one of their top retirement concerns, second only to maintaining good physical health.

The confidence gap: Advised vs Unadvised

The difference professional financial advice makes is striking.

Unadvised Australians are twice as likely to be extremely or very worried about outliving their retirement savings compared to those who have sought advice, 35% versus 19%.2 The research also shows that Australians with professional financial advice report higher happiness levels (73.9%) compared to those without (64.4%).

The benefits of advice extend beyond financial peace of mind:

• Mental wellbeing: 82% of advised Australians report good mental health, compared to 72% of those without advice.
• Knowledge confidence: 72% of advised retirees feel confident about their retirement financial knowledge, versus just 46% of the unadvised.

Pre-Retirees need support

Those approaching retirement face unique anxieties. Pre-retirees are significantly more worried about financial issues than current retirees:

• 46% worry about not having enough money to do what they want (compared to 34% of retirees)
• 44% fear running out of money in retirement (compared to 33% of retirees)

This is where financial advice proves most valuable, in navigating the critical transition from accumulation to drawing down their savings with confidence.

What retirees really want

The research is clear: Australians crave income certainty. With 78% aged over 60 saying they’d be happier with a guaranteed income for life. This isn’t just wishful thinking; it’s driving real behaviour. Recent CoreData research shows that product adoption has surged 150% since 2023.

Your Retirement, Your Confidence

Retirement should be a time of opportunity, not anxiety. While building wealth is important, converting that wealth into a reliable income and genuine confidence requires guidance and planning.

Professional financial advice isn’t just about managing money. It’s about creating the certainty and confidence you need to truly enjoy the retirement you’ve worked so hard to achieve.

We can help build a plan that turns your superannuation into the retirement lifestyle you envision, with the peace of mind that comes from knowing your money will last.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

1 https://www.apra.gov.au/news-and-publications/apra-releases-superannuation-statistics-for-march-2025

2 https://www.challenger.com.au/individual/Campaigns/Happiness-Index

We remain positive on markets but recommend active management to reduce increasing risk in portfolios

Key points

The major themes dominating markets are:

• Strong returns driven by optimism on Artificial Intelligence (AI) prospects, lower US interest rates, strong corporate profit results and a truce in China-US trade tensions
• Global market share indexes are expected to reflect increased earnings from stocks other than the Magnificent 7 (a cohort of the biggest US technology businesses) in late 2025 and 2026.
• Opportunities continue outside the US share market and in other asset classes including emerging markets, global listed infrastructure and global listed property.

Returns of major asset classes to 31 October 2025

The rally in all asset classes since May has continued with solid calendar year to date (CYTD) returns for both shares and bonds. The returns on growth assets have been exceptional over the last 3 years.

Global shares CYTD have delivered very strong returns. US large cap share prices have made new historic highs with the Magnificent 7 representing 69% of the increase in profits over the past year according to FactSet. The high Australian dollar reduced returns in AUD.

Emerging markets delivered impressive returns for the quarter and CYTD led by strong returns from Asian share markets.

Australian shares generated good returns with the Resources sector a key driver. Small cap stocks provided impressive returns for the quarter and year to date. Listed property also performed well. Both sectors benefitted from the RBA interest rate cut in August.

Australian and global bonds (hedged) delivered solid returns CYTD and outperformed the cash rate.

Source: FE Analytics

Outlook for economies and markets

Our base case for the next 6 months is that the share market will sustain its optimism with the odds of recession quite low. For the US, this is supported by an accommodative Federal Reserve, strong AI capex, a pro-growth policy agenda and high liquidity levels.

The key issue for investors is that while most large cap equity (and credit) markets are expensive, the indexes for US and Australia, which dominate portfolios, are at extreme levels; highly concentrated and with growth above earnings expectations.

This means that over the next few years we expect market returns to be lower.

We are positive on growth assets but focussed on active management and in sub asset classes where we see value and are better positioned for this stage of the cycle.

Australia’s prospects are vulnerable to tensions between China and the US, and the reduced likelihood of further RBA rate cuts going forward.

Conclusion

Our preferred approach in times of uncertainty remains:

• Continue to be diversified by asset classes.
• Remain flexible and incorporate active management.
• Bonds and high-quality credit for income and stability.
• Regular rebalancing to maintain target allocations.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

When it comes to managing money, many Australians fall into the trap of thinking that saving means spending as little as possible on everything. But there’s a crucial distinction between being frugal and being cheap. Understanding the difference can transform both your financial situation and your overall quality of life.

Being cheap means cutting costs indiscriminately, regardless of the long-term consequences. It’s buying the bargain-basement work shoes that fall apart in six months, skipping the dentist to save a few dollars, or choosing the cheapest option even when it compromises safety or wellbeing. While it might feel like smart money management in the moment, this approach often costs more in the long run through replacements, repairs, and missed opportunities.

Frugality, on the other hand, is about spending intentionally on what truly matters whilst cutting costs where they don’t. It’s a strategic approach that recognises not all purchases are created equal. A quality mattress may cost more upfront; however, considering you spend a third of your life sleeping, it’s an investment in daily wellbeing. Similarly, investing in a reliable coffee machine you’ll use every morning for years represents better value than repeatedly buying cheap appliances that break down.

The key difference lies in value-based spending. Frugal people identify what genuinely enhances their lives and allocate resources accordingly, whilst being ruthless about cutting expenses that don’t align with their priorities. This might mean spending generously on gym equipment if fitness is important, whilst happily wearing a limited wardrobe of versatile, quality basics that last for years.

Building a frugal lifestyle doesn’t require deprivation. It’s about finding affordable routines that bring genuine satisfaction, whether that’s cooking at home, exploring local walking tracks, or having friends over for coffee rather than expensive dinners out. These choices aren’t about being tight-fisted; they’re about recognising that connection, experience, and enjoyment don’t always require hefty price tags.

The trap many fall into is treating money management like a restrictive diet and discovering too much focus on what you can’t have leads to unsustainable habits and eventual burnout. Instead, aim for a balanced approach: track your spending to stay aware, invest in quality where it counts, and don’t beat yourself up over occasional splurges.

Regular expense reviews help maintain this balance without becoming obsessive. When you actively acknowledge each purchase, you develop clearer awareness of your spending patterns and can make better-informed decisions.

Remember, the goal is progress, not perfection. Provided you’re covering essentials and living within your means, strategic spending on what truly matters to you isn’t wasteful. It’s wise.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.

Starting your career with a healthy salary is exciting, but many young Australian professionals stumble into preventable financial traps that can delay their long-term goals by years. Here are five common pitfalls to be aware of.

Buy-Now-Pay-Later debt spirals

Services like Afterpay and Zip make spending feel painless, but multiple Buy Now Pay Later (BNPL) commitments can quickly spiral out of control. What starts as “just four easy payments” becomes a juggling act of overlapping debts that eat into every pay. Unlike credit cards, BNPL isn’t always captured in credit reporting, making it easy to lose track of how much you truly owe. Before you know it, you’re living pay to pay despite earning well.

The new car money pit

Few financial decisions destroy wealth faster than buying an expensive new car early in your career. A $50,000 vehicle depreciates $10,000 the moment you drive it off the lot, plus you’re paying interest, insurance, registration, and fuel. That same money invested in your super or an index fund over 10 years could grow to $80,000 or more. Evaluate whether you even need a car, given your work and lifestyle circumstances, and consider a reliable used car instead.

Over-committing to property too soon

The pressure to “get into the market” leads many young professionals to stretch themselves dangerously thin. Borrowing at maximum capacity leaves no buffer for interest rate rises, repairs, or life changes. Being house-poor in your twenties means sacrificing experiences, career mobility, and investment diversification. Take time to build a solid deposit and ensure the property aligns with your lifestyle, not just FOMO.

Lifestyle creep with every pay rise

Each promotion brings a bigger pay, but also a nicer apartment, better car, and overseas holidays. Before long, you’re earning double your starting salary but saving the same amount or less. Combat lifestyle creep by automatically increasing your super contributions and investments with each pay rise, locking in savings before you can spend them.

Following social media financial “gurus”

Instagram and TikTok are filled with self-proclaimed experts promoting day trading, crypto schemes, and property “secrets.” These influencers often earn more from course sales than their actual investment strategies. Real wealth-building is boring: consistent super contributions, diversified index funds, and patient compound growth. If someone’s selling a financial shortcut, they’re probably profiting from you, not with you.

Avoiding these traps won’t make you rich overnight, but it will set you years ahead of your peers.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.  We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.