May Newsletter
In this edition:
Words of wisdom
That’s a Wrap - the value of a platform
Zoom process
Data overload
Education versus learning
Words of Wisdom
I wanted to share with you an email that recently came across my desk from Seth Godin.
If you don’t know who Seth Godin is, Seth is sometimes known as 'the ultimate entrepreneur for the information age'. He is an American writer and has authored around 17 books, addressing various aspects of marketing, advertising, business venturing and leadership.
I often think about how appropriate his comments are to our business here.
People often come in wanting to build wealth, without realising that building wealth will not occur by winning lotto. Wealth comes from the hard day-to-day decisions around where you spend your money and using it wisely.
I recall when I was around 25 years old, realising that you can only spend $1.00 once. Once spent, it is gone. The decision on what to spend it on is critical.
I do think that maybe here I am preaching to the converted – as clients, you have already made that decision to save and invest wisely.
But let’s spread the message to those we see who have not yet learned that lesson!
“Get what you want without compromise!” That’s the call of our times. Lose weight without dieting. Get ahead without working hard. Earn big money without risk… when you expose it this clearly, it’s obviously nonsense. Compromise is precisely what’s called for.
You can’t have everything you want. But, if you care enough and sacrifice enough and work hard enough, you might be able to get some things that matter.
The real question might not be, “What do you want?”
It might be, “What do you care enough to compromise for?”
Vicki
That's a Wrap - The Value of A Platform
We sometimes get queries about the platforms we use, how they work and why we recommend them. There are a variety of platforms available, and we use a range such as BT Wrap, BT Panorama, CFS FirstWrap, Asgard and HUB24. We are not owned by or aligned with any provider and we assess the appropriate solution for our clients on a case-by-case basis.
What is a Platform?
A platform or a 'wrap' account combines all of your listed securities, managed funds, shares, insurances and superannuation into one account, eliminating some of the administrative burden and paperwork that usually comes with managing a number of individual investments separately.
We take a number of factors into consideration when selecting the right platform for our clients, including but not limited to:
Cost
Features
Investment list
Client access
Reporting functionality
Customer service
A wrap account offers the ability to hold direct investments, managed funds, term deposits and cash all in one place. Sales, purchases, income and expenses are processed through the attached cash account.
Wrap accounts can offer benefits such as access to wholesale funds, discounted brokerage and transaction fees as well as the convenience of being able to view and manage all your holdings in one place. You receive one combined tax summary report each year rather than separate documents from every company and managed fund.
Some platforms also include a choice of either a Custodial or Sponsored holding option. The majority of our clients are on the Custodial option which means you don’t get bombarded with paperwork - the platform provider deals with it on your behalf and we can participate in corporate actions such as share purchase plans for you. If you choose the Sponsored option you continue to receive all the paperwork and the onus is on you to update details and participate in corporate actions.
Another advantage of a platform is that often we have a single point of contact to help us if anything goes wrong, instead of trying to navigate the convoluted contact channels of individual issuers.
At Hell Yes! we prefer platforms for one simple reason: it’s easier for us. Yep, you heard it right! We simply do not have the manpower to manage off-platform holdings. By sticking with platforms, we are able to provide better service to you by focusing on the advice rather than the administration (even a simple redemption and purchase of a managed fund becomes a nightmare when off platform).
Managing off-platform investments requires spending hours and hours to ensure balances, client details and bank details are updated and correct, which of course means increased costs to us and to you, and an increased risk of human error.
Utilising platforms means we can easily see your position, maintain your details, transact on your behalf when required and keep tabs on where requests and trades are up.
Dividends and Distributions
Regarding dividends and distributions, you receive the same amount and the same frequency that you would off-platform. The bulk payment is made to the platform provider then it is divided up among the eligible investment holders. This is the reason that the money may not always hit your cash account on the expected date, although it will always be backdated for interest calculations.
Furthermore, not all investments pay dividends or distributions depending on their earnings and management decisions at that time, which is at the discretion of the individual fund or company. This is outside the control of Hell Yes! or your platform provider.
Zoom Process
We are continuing to meet with clients via Zoom and we have been pleased with how well it has been working. As you may already be aware, Zoom has released regular updates including security improvements.
When you book a Zoom meeting with us, you will receive a confirmation email, followed by an email with your password. You will then receive a text message reminder the day before your meeting.
Vicki and Corey see a number of clients each week (about 10 scheduled meetings per week plus ad hoc interactions). Some of our clients would be regarded as high risk for COVID-19 and there could be an infectious period before any symptoms show. We have a great relationship with our clients - and we do not want to put you at risk of infection.
Therefore, at this stage our plan is to continue conducting all meetings by phone, FaceTime or Zoom until at least 30 June 2020. At this time, we will re-assess based on the current social distancing guidelines and threat of a ‘second wave’.
Data Overload: What does the data tell us?
I recently had to ring Telstra about my data usage and why it kept creeping up. Perhaps you have noticed this over the isolation period as you’ve spent more time at home, and possibly more time on your devices, for example communicating by FaceTime or Zoom instead of face to face.
Telstra’s recommendation of course was to increase my data package – which is fine for them but of course costs me more! So I did some online research around this to try and identify the culprits, and perhaps reduce my usage instead of increasing my consumption.
Please note the tips below are targeted at iPhones but similar features are available on other devices.
Restrict iTunes and App Store downloads
Disable background app refresh
See which apps are using the most data
Disable Wi-Fi Assist
Download music, don't stream
Fetch email less frequently
Use your browser’s Reading List
For more detailed instructions, read the full article here.
The Difference Between Education and Learning
Seth Godin writes in his blog post How much is that piece of paper in the window? about the difference between structured education and self-directed learning.
Learning isn’t about changing our grade, it’s about changing the way we see the world. Learning is voluntary. Learning is always available, and it compounds, because once we’ve acquired it, we can use it again and again.
This of course doesn’t mean that there is no value in formal qualifications - but lifelong learning is a mindset rather than a means to an end.
If you’ve found yourself with some extra time on your hands and would like to challenge yourself, TAFE NSW (among other providers) has a host of free courses available at the moment across a range of subject areas. U3A is also offering some online resources at this time.