Another interest rate hike could be just around the corner, and many Australians are feeling the strain.

With all four major banks expecting the Reserve Bank to lift the cash rate to 4.6% on September 29, and some economists predicting further increases, borrowers are once again facing uncertainty about their finances.

For many, the challenge is not simply higher repayments.

It's also the mental burden that comes with trying to make sense of competing advice, economic forecasts and financial decisions at a time when household budgets are already under pressure.

We hear from a growing number of people who feel overwhelmed by information and paralysed by choice.

As anxiety rises, clear thinking can become harder, increasing the risk of poor decisions at precisely the moment confidence is needed most.

Why money uncertainty drains your mental energy

Paralysed as they attempt to analyse information, they don't feel as if they completely understand, and they're unable to think clearly in the dizzying noise of choice.

Anxiety is on the rise, interrupting sleep and consuming cognitive energy.

The reason we experience anxiety is to heighten awareness of potential danger and ready us for action - to do something.

If we don't know what the best thing "to do" is, our anxiety persists and we become paralysed by fear, particularly the fear of making the wrong choice.

Starting out as concern, it quickly escalates to a state of apprehension and worry.

You learn as much as you can, but if this takes too long, you get exhausted and move into the overwhelmed state, getting lost in the sea of new and complex information.

This leads to the highest level of anxiety - panic, where you tend to lose any rational control over your actions.

Anxiety is an emotion that needs to be released by action, so when you become paralysed by choice and fear your instinctive brain takes over, making all sorts of illogical and counter-productive decisions.

In this state we often take our cues from what other people are doing. They are also often acting from their survival instinct.

The power of the herd is strong when we don't know what to do. Think of a run on the banks, wild stockmarket fluctuations and panic buying during the pandemic.

What anxiety does to your decision-making

Physiologically, when you feel anxious, the stress hormones in your stomach stimulate "butterflies" and can make you feel sick.

It indicates something in the environment is wrong, different or new.

Blood is directed away from your hands and feet, making them clammy and sweaty as your heart works hard to pump blood to arms and leg muscles ready for escape.

Sustained stress often tires your limbs due to over-stimulation, making you feel lethargic and exhausted.

Anxiety does not discriminate between different types of change and uncertainty.

So, when you feel you are starting to become paralysed by analysis and panicking about what to do, remember that uncertainty is uncomfortable, but it is also temporary.

You will be okay.

Take a breath, have a break and keep reminding yourself that the answer will reveal itself eventually with time and focus.

Three ways to stop overthinking and take control

1. Create time and space

I have been in many negotiations where we've requested an overnight break.

Not feeling rushed reduces the sense of immediate threat and allows for more cognitive energy to be spent solving the problem at hand.

2. Rename and reframe the emotion

This is an old trick that comes from sports psychology.

When you feel the butterflies of nervousness and stress, tell yourself that you are actually excited and full of anticipation about the challenge ahead.

Nervousness and anticipation look exactly the same in the brain, so simply reframing what the feeling means can have a huge impact on your performance, energy and attitude.

3. Externalise the subject matter

Think of the issue as someone else's problem that you are advising on.

This allows you to reduce the level of personal threat and better consider new or creative solutions.

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One of the unexpected joys of being a father to two boys in their early twenties is stepping into the role of lead negotiator when a car needs to be purchased. It is enormously entertaining.

The modern car dealership is a living laboratory of behavioural economics.

It is a carefully engineered environment of polished floors, flattering lighting, warm coffee aromas and strategically placed price tags designed to stretch your expectations before you have even opened your wallet.

For someone who has spent a lifetime studying decision-making, it feels less like shopping and more like field research.

The moment I knew we had to be prepared to walk away

After a particularly enthusiastic Queensland hailstorm turned my son's beloved Mazda into something resembling a prop from an action film, we found ourselves in a dealership on a bright Saturday afternoon.

He had already found a near identical replacement, just a few years younger and with far fewer kilometres. He was in love.

From my perspective, this was a liability.

The first rule of negotiation is simple. You must be able to walk away. Salespeople can detect emotional attachment the way sharks detect blood.

The dealership trick that made expensive cars seem normal

Before we even met our opponent, the environment went to work. We were invited to wait in an exceptionally comfortable lounge directly opposite a curated display of their most expensive vehicles.

Prices glowed from digital screens in a way designed to recalibrate your sense of normal. This is anchoring at its finest.

If you first see six-figure numbers, five figures start to feel modest. It is clever, subtle and entirely intentional.

Then our salesman approached. Young. Slightly ill-fitted suit. Fresh from what I imagine was an intensive course titled Advanced Techniques in Persuasion and Complimentary Coffee Distribution.

Perfect. Let the games begin.

My son's biggest negotiation mistake happened before we started

The test drive was designed to trigger attachment.

He wanted us to fall in love with the vehicle.

So we did the opposite. We pointed out every rattle, every scratch, every slightly questionable sound.

Not because we disliked the car, but because we needed to signal detachment. Desire weakens your bargaining position. Visible indifference strengthens it.

The free coffee wasn't really free

Throughout the process he offered us coffee, cake, pens and various small tokens of hospitality.

This was reciprocity bias at work. When someone gives us something, however small, we feel an unconscious pull to return the favour.

We politely declined. Not because we do not enjoy coffee, but because we did not wish to feel even microscopically indebted over several thousand dollars.

The surprisingly powerful trick behind a handwritten price

Then came the ceremonial writing of numbers on paper. It was a fascinating ritual.

His handwriting suggested he had lived most of his life in the presence of a keyboard, yet he persisted because most sales training states that the act of physically writing numbers creates a sense of weight and seriousness.

Why my first offer made the salesperson squirm

We responded with an offer that was uncomfortably low. Not insulting. Not absurd. Just low enough to make him shift in his seat.

I have always told my boys that your first offer should cause mild discomfort. That is how you locate the true negotiating range.

The theatre intensified when he disappeared to speak to his manager.

We knew this meant either a bathroom break or a chocolate biscuit.

Upon his return to let us know our offer was too low, I excused myself to call my wife about whether we should exceed our planned budget.

In reality, that involved a very passionate discussion about dinner plans. Staying visible but out of hearing range, frowning thoughtfully, signalling reluctance. Negotiation is as much performance as mathematics.

After several rounds of this polite choreography and three separate attempts to stand up and leave, he returned with the news that our price had been accepted.

It was significantly below the asking figure.

When we finally left the dealership with the signed contract, there was much joy and high-fiving.

Not because we had won something grand, but because the process had worked exactly as behavioural economics predicts it will.

What every car buyer can learn from this experience

What does this teach us about negotiation?

First, environments matter.

Anchors influence expectations long before numbers are discussed.

Second, emotion is leverage. If you fall in love, you cede power.

Third, reciprocity, scarcity and authority cues are not abstract theories found in textbooks. They are active forces shaping actual decisions in real time.

Finally, the ability to walk away is not just strategic theatre. It is psychological armour.

From a behavioural economist's perspective, negotiating the buy price of a car is less about clever lines and more about understanding impulses. Sales systems are designed to trigger them.

Good negotiators notice them. Great negotiators regulate them. When you can separate desire from decision, pause before reacting and remain detached from the outcome, you move from being steered by the process to steering it yourself.

And that, as it turns out, is a lesson far more valuable than a slightly discounted Mazda.

The risks of switching your super out of a highly regulated super fund were highlighted this year when it became apparent that more than 11,000 people had lost more than $1 billion in retirement savings in two managed investment schemes, Shield and First Guardian, when they collapsed.

Members were persuaded to switch out of their super funds with promises of high returns after responding to social media ads offering free super health checks.

The 'lead generators' then sold their contact details to third parties, such as financial advisers, who convinced them to switch to those schemes.

A recent national survey conducted by Super Consumers Australia shows that while engagement in super is rising, confidence is not: 70% of Australians check their super but only 50% feel confident making decisions about it.

Too many super fund members are left to work things out on their own when it comes to making decisions about their super - and the stakes are high.

A shadow shop undertaken by Super Consumers on super fund call centres came with staggering results. It recently tested customer service across super fund call centres and found them badly wanting.

The consumer organisation is now calling for mandatory customer services standards after its study of 20 major super funds call centres gave the industry a failing grade.

"People don't just need a healthy super balance to have a dignified retirement. They need to know their fund will pick up the phone when they're grieving, need to access their money or ask a simple question, and help them," says Super Consumer's CEO, Xavier O'Halloran.

Our $4.5 trillion super system is widely admired around the world. It has invaluable consumer protection but gaps, that need urgent addressing, remain, especially for those in retirement. 

The benefits of oversight 

Many people fail to choose an investment product when they join a super fund and consequently land up in its default option, known as MySuper.

Thanks to government oversight, it is a simple, low-cost, easy-to-compare option. Its features and investment returns are displayed on each fund's 'dashboard'.

MySuper funds are either a diversified balanced option or a lifecycle option.

Importantly, all MySuper products are subject to an annual performance test conducted by the Australian Prudential Regulation Authority.

Funds that fail the test must inform their members.

If it happens repeatedly, they must close the option to new members.

This has weeded out underperforming funds and forced fees down.

And consumers can easily check to see whether they are in a top performing MySuper product by using the ATO's MySuper comparison tool. It ranks MySuper products by performance and fees.

These measures have provided consumers with solid long-term returns.

"The Australian superannuation system is admired around the world because it is mostly designed to deliver good outcomes regardless of your level of knowledge or engagement with it," says O'Halloran.

"People are defaulted into investment options that are tested to make sure they're delivering good returns.

"People who are working and invested in a MySuper product would have seen their investments grow by 7% to 8% every year on average over the past decade. That is a positive outcome, which will see people more financially secure in retirement."

Retirees left out in the cold 

However, O'Halloran says there are gaps in the safeguards when it comes to people moving into pension phase.

A fund member can move from an accumulation product into an almost identical retirement product and lose the protection of the performance test.

"All these protections to ensure good outcomes disappear when people hit retirement age. There is no independent performance test or comparison tool and no basic products or pathways to help people manage their super in retirement.

"Our analysis found that a typical person could be up $205,000 worse off in retirement if they are stuck in one of the worst performing investments. But right now, there are no protections to drive funds to be better or to even warn people in poorly performing investments."

He says 74% of Australians support extending the performance test to retirement products, and an even larger 84% call for greater transparency so retirees can compare how their fund performs (Securing Australia's Retirement report, 2025). This leaves consumers vulnerable at a critical point.

Social media's role in switching

O'Halloran says social media increases the risk of harm because it lets operators reach huge numbers of people cheaply and quickly.

"This playbook is directly linked to the collapse of the Shield and First Guardian Master Funds.

"Lead generators often use social media ads, usually framed as free super health checks, to harvest personal details.

"They can't legally sell a product themselves, so they hand the 'warmed up' lead to a licensed adviser, sidestepping the anti-hawking rules meant to prevent cold-call selling.

"These pitches routinely promise life-changing returns with no apparent risk, then leave the person facing steep fees for advice that is not suitable for them."

O'Halloran says ASIC's evidence to Parliament in May this year put a number on the scale of the problem: more than $100 million spent by First Guardian and related funds on lead generators.

"This is money ultimately funded by the retirement savings being funnelled through them."

What to do before switching 

Compare products first, he says. "For people who are still working, the YourSuper tool compares investment options by fees and performance.

It's much harder when it comes to retirement investment options.

"People planning to retire should first figure out how much they need to cover living expenses once they retire and then, whether their super and other sources, like the age pension, will provide enough income to cover those expenses."

He also recommends the Moneysmart website to take the hard work out of these calculations.

"Now you can start to optimise by finding a fund with a long track record of good returns and low fees.

"Some super funds also offer products that help deliver you a stable income, so you don't need to worry as much about what is happening on the sharemarket when you're thinking about what you can buy at the supermarket."

Avoid the shonks 

"There are unscrupulous people looking to take advantage of people who are not sure what to do with their super. Here are tips to avoid them:

• Treat any unsolicited call or 'free super check' ad, especially on social media, with scepticism. Genuine advisers don't typically need to fish for clients this way.
• High-pressure, time-limited offers, and promises of guaranteed high returns or 'no downside' are red flags regardless of how professional the pitch sounds.
• Check credentials on the financial advisers register before handing over personal details or signing anything.
• Ask upfront about switching costs.
• If you feel uncomfortable at any point, just hang up!"

Reader question

Hi Paul,

How should I think about superannuation non-concessional contributions?

I'm 55 and my wife is 53. I'm looking to retire in five years' time, but my wife loves her job and will stay in the workforce longer. My knees are wearing out so I can't do that.

I think we're preparing well. I have $800,000 in super and, because of staying home with the kids, my wife has about $200,000. We have binding nominations pointing at each other.

We also have a share portfolio of ETFs worth $400,000 returning about a 4% yield, but no investment property.

My goal has always been to try and save so that we wouldn't be a burden on the taxpayer in retirement.

We're maxing out our concessional contributions, but should I consider shifting some of our share portfolio into super via non-concessional contributions to simplify our pension-phase retirement income?

And if so, whose super do I top up? My wife's balance because it's lower, or mine because I'm going to be retiring earlier?

Or would it be better to leave our ETFs compounding through dividend reinvesting?

Should I factor in the government's proposed minimum CGT tax of 30% and get out of share investing now? Or is that kind of speculation useless because who knows, maybe the government will go after my super next?

It sure is hard to know what to do. - Garry

Paul's response

You'll get no argument from me, Garry.

With the situation in the Middle East and the war in Ukraine, rapid rises and falls in the oil price, and changing tax policies in Australia, investing is not simple.

But we need to battle on and try to control what we can control.

There is no argument that those who save and invest sensibly will benefit. Your pool of savings is impressive. I agree with you, you are preparing well, and your savings pot will continue to grow over your next five years of work.

In a real sense, you've already done most of the hard work.

With a combined $1 million in super and ETFs worth $400,000, you already have a pool of money that should comfortably deliver around $60,000 a year. Based on long-term historical returns, your capital should also continue to grow broadly in line with inflation.

Geopolitics, uncertainty and changing government tax policy are hindrances, but you can't do anything about them. The important thing is that you have built a sizeable capital base.

Personally, I'd be looking to top up your super as much as you can.

You're already maximising concessional contributions, which means around $32,500 each this financial year. What a great start.

As your balances are well below the $2.1 million threshold, you and your wife could each contribute up to $130,000 a year as non-concessional contributions. Depending on eligibility, you may also be able to trigger the bring-forward rule and contribute up to $390,000 each.

You'll need to talk to your super fund, accountant or financial adviser before making any decisions. There is a lot more personal information required before anyone can provide more than general guidance.

That said, I think there is an important general principle here.

Depending on your personal tax rates, the potential capital gains tax implications of selling ETFs, and your broader financial situation, I generally prefer money inside super.

During the accumulation phase, earnings within super are typically taxed at 15%.

Once you move to pension phase, provided you have reached preservation age and satisfied a condition of release, earnings on assets supporting a retirement-phase pension can be tax free, subject to the relevant transfer balance cap rules.

For investors, that can be a very attractive environment.

I would encourage you to speak with your fund's member advice service or seek personal financial advice.

There may be factors specific to your circumstances that make maximising super less suitable than it appears at first glance.

In an increasingly complex world, I tend to favour simplicity. A large, low-cost super fund can often provide exactly that.

Seek advice, work through the numbers, and go from there.

Research over the years from Moneysmart and Finder has put the average amount individual Aussies spend on Christmas each year between $800 and $1360.

This year will likely be no different, with a Finder survey of 1000 people in August finding 16% were already putting money aside for the silly season.

Experts say these thrifty types are on the right track, as making difficult decisions and getting a plan in place early can help keep expenses in check.

Here are the money moves you should be making in the remaining months of 2026 to make sure Christmas doesn't blow your budget.

1. Stress-test traditions

Hoping to spend less on this Christmas than last year?

Finder personal finance expert Sarah Megginson says the three months until December 25 makes now the ideal time to have conversations with friends and family about how you could make savings.

"Stress test [your traditions] a little bit to see if there's any room to do things differently," she suggests.

"You can have these conversations now with a little bit less pressure and just float suggestions of how things could look a little bit different [this year], so that you're doing Christmas in an affordable way".

In other words, if you're hoping to cut back on gifts or trips away, now is the time to set expectations and get everyone you're celebrating with on the same page.

2. Start putting money aside now

Come up with a budget, including things like a gift list of everyone you want to buy for, as well as any other expenses you're anticipating such as food, drink and travel.

Then start putting money aside in small amounts to build up your yuletide war chest.

Stashing funds in a savings account is one way to do this, but Megginson warns this can make it too easy to dip into your budget to cover other costs.

For those wanting to be delivered from such temptation, she recommends converting your Christmas budget into assets slightly less liquid.

"[When you go shopping] just grab a gift card and set it aside in a drawer or cupboard somewhere and keep adding more cards every week or two," she explains.

"It's harder for you to dip in and start using your own gift cards... [so] by the time Christmas rolls around, you're going to have this little collection".

You can then redeem these cards on Christmas groceries or add them to other small items to build a gift pack for a loved one.

3. Think about fuel

Fuel prices have rarely been out of the news this year.

With petrol well over $2 a litre in many areas and diesel more expensive again, this is an extra cost primed to hit just as your Christmas holiday gets underway.

So it pays to get familiar now with how you can spend less at the bowser, before a servo bill puts a sour note on the season.

Caring for your car and being mindful of how you drive are big ones, but so is shopping around.

Even as prices increase, there can be differences as large as 20 cents per litre between competing petrol stations in the same area.

Luckily, there are dozens of free apps and websites you can use to find the cheapest prices near where you are now and where you'll be travelling over Christmas.

4. Take advantage of the Black Friday sales

This relatively new retail tradition falling in late November is a well-timed opportunity to buy Christmas presents at a discount.

"If you're not using Black Friday to shop for Christmas, then you are missing out on a huge opportunity," says Sarah Megginson from Finder.

"Lots of brands and retailers save their best deals for Black Friday."

Black Friday is the last Friday in November - in 2026, that will be the 27th, but many brands start their sales earlier.

Keep an eye on your favourite products and retailers from mid-October to catch the discounts as they drop.

5. Share the load

Planning on hosting family or friends for lunch or dinner this year, but dreading getting stuck with all the work? It's a good idea to reach out and work on a plan to split the load.

Divide up responsibilities for the meal, so that each person or household brings a specified plate or course.

The same concept can work for gift giving - try a Secret Santa arrangement with a set budget.

With this, each guest is allotted one other person they have to buy a gift for and enjoys the savings from not having to buy items for everyone attending your party.

Few stories capture the challenges of long-term investing quite like Homer's The Odyssey.

In Homer's tale, it takes Odysseus 10 years to make it back to his homeland after the Trojan War. Seven of those years are spent in the rather pleasant embrace of the immortal nymph Calypso.

Maybe we could compare those years to investing on the ASX, where time slips by, markets drift sideways, and you wonder whether you've achieved anything at all.

Everyone wants to talk about the next 10% move on the ASX. Nobody wants to talk about the next 30 years. Yet that's the journey most investors are actually taking. They're trying to get home to Ithaca.

Homer wrote about it nearly 3000 years ago. Not the sharemarket, obviously, but about the long road home, the distractions, the disasters, the lucky escapes and, above all, the importance of simply keeping going.

The Odyssey is investing? Ithaca is retirement?

Then it isn't about beating the market every year. It is about reaching financial independence. It is about arriving.

After all, The Odyssey finishes when Odysseus gets home to his wife, Penelope, his son, his dog, and, finally, his own bed.

Why staying invested beats timing the market

Homer's story begins after the Battle of Troy has been won. Now comes the difficult bit, getting home.

In investment terms, starting is easy. Staying the course for decades is the real challenge.

Poseidon and the sea are the markets. Completely indifferent to your plans.

Markets don't care about your retirement. They don't even know you exist. They simply produce storms from time to time.

Then we reach the Land of the Lotus Eaters, where complacency takes hold.

It is easy to see a modern parallel.

Global markets sit close to record highs despite higher bond yields, sticky inflation, elevated oil prices and AI valuations that are beginning to stretch credibility. It is tempting to believe everything will simply work out.

Who can blame Odysseus for being distracted by the Lotus Eaters?

Never checking your super, leaving too much money sitting in cash, or assuming someone else will take care of your retirement. Comfort is seductive. Years disappear quickly.

Odysseus eventually realises that comfort without progress is simply another form of failure.

The behavioural mistakes that cost investors money

Then come the Sirens.

The Sirens today don't sing from rocky islands, they appear on social media promising "20% annual returns". Bitcoin. Meme stocks. The latest AI darling. Every generation has its Sirens, singing songs of riches.

Everyone hears them. Many investors are tempted.

Odysseus asks his crew to tie him to the mast. He still heard the songs.

Good investors need the same discipline. Asset allocation. Position sizing. Risk management. Systems that stop emotion taking over.

The trick isn't avoiding temptation. It's surviving it.

Then come the sea monster and the whirlpools, Scylla and Charybdis.

Sometimes investing presents no good choices. Do you buy the dip? Raise cash? Hold your nerve?

Sometimes every option carries risk. Sometimes we have to choose the least bad outcome.

Investing can be the same. Sometimes success is simply losing less than you otherwise would have.

Then we meet the Cyclops.

This is hubris. The belief that every investment decision is brilliant and every success is due entirely to your own genius.

Odysseus defeats the Cyclops through guile rather than strength, but even then there is a sting in the tail.

Markets have a habit of humbling the overconfident just when they think they have everything worked out. Every bull market creates a few Cyclopes.

Then there is Circe who turns men into swine.

We have all got those stocks that have turned from a great idea into a dog or a long-term hold.

Our own investing journeys are also buffeted by the winds of behaviour. Selling winners too early. Hanging on to losers in the hope they recover.

Behaviour destroys far more wealth than markets ever do.

Why patience is every investor's superpower

Then we have Penelope.

She is a wonderful metaphor for patience. She quietly waits, weaving her tapestry while the years pass. She isn't distracted by the suitors. She plays the long game. She trusts that eventually the journey will end.

Compounding is rather like Penelope. Quiet. Unexciting. Relentless.

Along the way, Odysseus is guided by Athena, the goddess of wisdom.

Every investor needs an Athena. Not someone who predicts markets, but someone who encourages sensible decisions and filters out the noise.

Good advisers don't eliminate storms. They simply help you sail through them.

At the end of the story comes the final test. Odysseus alone can string his great bow and fire an arrow cleanly through the axe heads.

Investing is much the same. Only you can complete the journey.

Experience matters. Pure strength isn't enough. It takes knowledge, discipline and perspective to reach your destination.

Reaching your own Ithaca

By the time Odysseus reaches Ithaca, he has endured shipwrecks, storms, monsters, mutinies and painfully slow progress.

Yet through it all, he never loses sight of where he is trying to go.

This, perhaps, is the biggest lesson for investors.

Retirement isn't won by finding the next tenbagger. It is achieved by surviving long enough to arrive.

The greatest risk to an investor is rarely the market. It's abandoning the voyage.

That's a lesson Homer understood long before there were stock exchanges.

Planning a trip to Japan?

Travel Money Oz recommends budgeting 600,000 yen (JPY) per person for a multi-week, high-end holiday featuring everything from ski slopes and luxury accommodation to kabuki performances and fine dining.

At today's exchange rate, that works out to about $5355 Australian.

That's a significant saving compared with recent years. The same 600,000 yen budget would have cost Australians almost $6900 in 2023 and more than $8300 in 2019.

The savings are largely due to the Australian dollar's surge against the yen. Last month, $1 bought 114 yen, the strongest AUD/JPY exchange rate since 1990. While the rate has since eased slightly to around 112 yen, Australians still enjoy far greater spending power in Japan than they have for decades.

 

 

 

 

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Why is the yen so cheap?

These helpful exchange rates have been delivered by a significant slide in the value of the yen, but also strong performance from the AUD.

"The Australian dollar is going quite well compared to other global currencies," says Dr Rand Low, associate professor of quantitative finance at Bond University.

"And the yen is particularly weak at the moment and that's due to multiple issues," he adds.

Dr Rand says one of these issues is the Japanese government's large amount of debt - worth 204% of its GDP - but adds deeper societal problems are also to blame:

"There are a lot of concerns about [Japan's] productivity because it's got an ageing demographic," he explains.

Tom Wickenden, investment strategist for trading platform Betashares says Japan's low interest rates - around just 1% - are also driving down its currency.

"[Japan has had] really low interest rates for a very long time," he says. "That tends to see currencies depreciate against its global peers".

A boom for travel

The timing is notable given Japan's booming popularity with Australians.

A record one million Aussies visited the country in 2025, 15% more than the year before, helping push Japan into third place among Australians' favourite overseas destinations.

Anhar Khanbhai, Asia-Pacific spokeswoman for travel money platform Wise, says the low yen has been "giving the Aussie dollar extra muscle on the ground in Japan right now".

"The yen has definitely been one of the most popular currencies on Wise in recent years," she says.

Khanbhai says Wise's Aussie customers are watching the yen exchange rate closely, taking advantage of any upticks that might suddenly help their holiday budget go a bit further.

"As soon as we see the AUD strengthening against the yen, people are quickly converting and adding money, holding it and then booking their flights or accommodation".

How long will the yen stay cheap for?

Experts say Aussies should be able to enjoy a strong dollar in Japan for the next several months at least.

"It's a good time to travel to Japan for the next year, maybe until the end of next year, because basically we don't see any signs from Japan of its policies changing any time soon," says Dr Rand.

But the low value of its currency is causing issues for Japan and countries it trades with.

Tom Wickenden from Betashares says this means we shouldn't expect the yen to drop much further from where it is now.

"We have started to see some intervention, both from Japanese and US politicians, to try and stop the yen weakening too much further," he says.

"[It's] an indication of a potential ceiling on the Aussie dollar to Japanese yen exchange rate".

How is the Aussie dollar going against other currencies?

It's not just the yen: the AUD is currently performing well against many of the currencies Aussies need for overseas holidays.

"We've also seen a strong AUD to US dollar," says Anhar Khanbhai from Wise.

"People can take advantage of that in popular regions like Latin America and Africa, where operators of bucket list experiences predominantly quote in and accept only US dollars".

The AUD is also strong against the Indonesian rupiah and the New Zealand dollar, making trips to Australia's two most popular travel destinations cheaper as well.

But while the change promises savings for cardholders, it could have ripple effects beyond the checkout.

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Adele Eliseo, founder of The Champagne Mile, to explain what's changing, who's likely to benefit and why credit cardholders need to pay close attention.

Episode timestamps

00:00 Introduction

01:34 What happens to card surcharges from October?

03:42 Why are card surcharges being banned?

04:40 How much are consumers likely to save?

05:32 The impact on rewards credit cards

07:03 How banks are already changing rewards programs

08:27 What rewards card holders should do now

10:10 Conclusion

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

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ASIC commissioner Simone Constant says the regulator is now "beyond warnings" and pushed players to assess themselves against its 10 best practice principles.

Constant says ASIC expects everyone in the investment chain - fund managers, deal underwriters and trustees right through to valuers, auditors and ratings agencies - to consistently meet their responsibilities.

Private credit has grown rapidly in recent years as investors have looked for higher returns than traditional fixed-interest investments. Private credit funds typically lend money directly to businesses and property developers rather than through traditional banks.

The recent collapse of property developer Bathla put a spotlight on risks within parts of the private credit market and prompted some investors to pull money from private credit funds.

Constant says funds that allow investors to withdraw money regularly while holding assets that can take years to sell or repay face a fundamental problem that must be resolved.

One of ASIC's key concerns is that some funds allow investors to withdraw money regularly even though the underlying loans and assets may take years to repay.

"Offering regular redemptions to investors while holding illiquid, multi-year property loans creates a fragile product design that breaks down under pressure - especially when coupled with loan "management practices" that rearrange deck chairs while the tide goes out and the boat risks running aground," she says.

She says that when property projects stall and credit vehicles freeze redemptions, the damage falls squarely on the real economy.

"Contractors and trade subcontractors are left unpaid, homebuyers face the distressing prospect of losing their deposits, and superannuation members find their retirement savings locked away. The damage also falls on investors."

The warning is particularly relevant for super fund members because many large super funds have increased their exposure to private credit in pursuit of higher returns.

Constant says ASIC is worried the sector's engagement might be "too little, too late" if participants don't move with urgency towards consistent good practice. She urged the sector to strengthen standards now before problems undermine investor confidence.

"If you are a private credit fund who hasn't assessed yourself against our 10 principles of private credit done well, ask yourselves - why not? Before your investors do," Constant says.

"The clock is ticking. Whether we see broader credit stress or not, certainly the tide is going out on poor private credit practices. The collapse of Bathla reinforces why strong governance, effective oversight, clear disclosure and accurate valuations are critical."

Another concern for ASIC is whether some funds are accurately valuing loans, particularly when borrowers are under financial pressure.

"Fund managers need to review loan portfolios and apply realistic, independent valuations," Constant says.

"Carrying distressed loans at full face value to protect management fees is unacceptable."

Constant says while the Bathla collapse is deeply concerning, for ASIC it has not been surprising.

"We've been talking about private credit for a long time now - specifically about the risks stemming from inconsistent industry standards that haven't kept pace with the growth, significance, complexity and connections of the sector," Constant says.

"What we're seeing now, as some of those weaknesses are tested at scale for the first time by current conditions, are the first significant cracks - the first stress fractures - beginning to emerge."

Constant also called on institutional investors and superannuation trustees to not accept private credit managers at face value.

"Trustees have clear statutory obligations to act in their members' best financial interests. Fulfilling that duty requires genuine, look-through due diligence," she says.

"Trustees must look past headline returns, examine the underlying collateral, verify bad-debt provisioning, and independently test manager assumptions before committing member capital."

This article first appeared on Financial Standard

The Vanguard S&P 500 ETF, better known as VOO, has become the world's largest ETF, with more than US$1 trillion invested in it.

Retail investors love it because it's cheap, simple and gives them exposure to the US's largest companies.

But that doesn't make it safe, especially as the conditions that drove the market higher start to change.

The Federal Reserve has just raised interest rates for the first time since July 2023. Bond yields are pushing towards 5%, oil is trading near US$100 a barrel and borrowing money is becoming more expensive.

The AI boom has flourished on cheap money, enormous spending and expectations of extraordinary future growth.

But higher bond yields reduce the present value of future earnings, while more expensive credit raises the cost of funding the chips, data centres and energy infrastructure needed to keep the boom going.

Some of the biggest names in AI are calling for development to slow. Whether that leads to lower spending is still unclear, but spending doesn't need to collapse for these stocks to fall.

When expectations are already high, even slightly weaker growth can trigger a major reassessment. That's the real risk for VOO investors.

The fund may hold around 500 companies, but a small group of technology giants heavily influences its performance.

If the stocks that drove the index higher begin falling together, owning the entire index may offer far less protection than many investors expect.

After the Fed's rate hike in July 2023, the S&P 500 fell about 11% to its October low. A similar correction would make 7000 points a real possibility, but history tells us the downside can be much greater.

The S&P 500 lost roughly 40% to 50% during the 1973-74 oil crisis, the technology bust and the Global Financial Crisis.

If slowing AI investment becomes the catalyst for another major crash, history suggests the index could fall towards 4000 points.

That would be very painful for retail investors who have piled into ETFs near record highs, leaving them exposed to the entire decline.

While holding through a 50% fall sounds easy in theory, it rarely feels that way when your money is disappearing.

History shows that many investors eventually crack under the pressure and sell when the damage is already done.

However, holding on presents another challenge: how long can you afford to wait?

After peaking in 2000, the S&P 500 didn't break decisively above that level until 2013. Could you afford to wait another 13 years to get your money back?

The S&P 500 doesn't have to crash, but with money becoming more expensive, oil pushing costs higher and AI expectations stretched, blindly buying the index may not be the safe strategy many investors have been led to believe.

Best and worst sectors

Health Care was the best-performing sector this week, rising more than 4% as heavyweight CSL continued its recovery, supported by renewed investor confidence and positive broker sentiment.

Communication Services gained 0.81% as investors rotated into defensive stocks, supporting heavyweight Telstra.

Consumer Discretionary rounded out the top three, up 0.40%, as bargain hunting supported retailers following the market's recent sell-off.

At the other end of the market, Materials was the worst sector, falling more than 1.5% as weaker commodity prices and profit-taking weighed on major miners.

Information Technology was the second-worst sector, also dropping more than 1.5% as rising bond yields and renewed AI concerns pressured highly valued growth stocks.

Real Estate rounded out the worst performers this week, falling more than 0.5% as higher bond yields and expectations of further interest rate rises reduced the appeal of property stocks.

Best and worst stocks

Telix Pharmaceuticals led the ASX Top 100 this week, climbing more than 11% after receiving FDA approval for its brain cancer imaging product, Pixclara.

Dyno Nobel Ltd followed, rising 6.94% as its share buyback and improving explosives earnings outlook attracted buyers.

CSL Limited rounded out the leading performers, gaining 6.26% as broker upgrades strengthened confidence in its earnings outlook.

At the other end, Mineral Resources was the weakest performer, falling more than 8% as another decline in lithium prices weighed on producer sentiment.

IGO Limited followed, also falling more than 8% as falling lithium prices renewed concerns about its earnings outlook.

NEXTDC Limited rounded out the worst performers, falling 8.29% after announcing $1.1 billion in convertible note funding, raising concerns about dilution, debt and heavy spending.

All Ordinaries Index update

The All Ordinaries has finished flat so far this week, slipping just 0.1% as indecision continued to dominate.

The recent decline in oil prices may have eased some pressure, but the index remains caught between key levels.

Support sits around 8800, while 8600 becomes the next major level to watch if sellers regain control.

Healthcare helped offset further weakness in Materials, while Financials finished relatively flat.

Materials has now declined for three consecutive weeks and is approaching its longer-term uptrend, making next week particularly important.

Strong demand linked to renewable energy and electric vehicles could attract buyers, although uncertainty surrounding the AI investment cycle may create some headwinds.

For now, this remains a stock-picker's market rather than one that favours passive investors.

If the All Ordinaries holds above 8600, the broader market can still be viewed as moving sideways.

However, a decisive break below that level could bring 8000 into focus and potentially trigger the deepest correction since the tariff-driven sell-off in April last year.

Markets can change quickly, so investors need to stay informed and watch how prices respond around these critical support levels.

1. Living in an apartment? You might soon be able to join the solar saving spree

Renters and apartment dwellers could soon be allowed to put portable solar panels and batteries on balconies and in gardens.

Federal climate change and energy minister Chris Bowen announced this week that state and territory governments had agreed to work with his department to make plug-in solar legal in Australia.

Large panels and batteries are already popular on detached and semi-detached homes.

They allow Aussies to produce and store their own electricity, reducing the amount they take from the grid and, therefore, their power bills.

"Now we're taking the next step, by looking at how even more Australians can take advantage of free, abundant sunshine - even if they don't have a roof," Bowen said, according to the ABC and Nine Newspapers.

Bowen said the panels and batteries would be small enough that residents could move them on their own from property to property.

Plug-in solar systems are already popular in several European countries, including Germany, where residents often put panels on their balconies to power appliances inside their home.

But Bowen warned the products wouldn't become available in Australia "overnight", adding there was "a lot of work to do" to make sure they were safe and met safety standards.

2. Foreign investors told to contribute to housing supply

Foreigners who buy residential land are being reminded to contribute to Australia's housing supply after one investor was fined for taking too long to start construction.

The tax office issued the warning to "land banking" investors after the individual was ordered to pay $370,000 by the federal court this week for not building a home on the lot within four years.

"This case should serve as a warning to foreign investors and their advisers," said ATO assistant commissioner Jennifer Moltisanti.

"[They] need to understand that buying residential land in Australia comes with clear and enforceable obligations".

"Where foreign investors do not comply, we will take firm action, including court proceedings, to uphold the law and protect Australia's national interests."

Foreign investors who purchase vacant residential land in Australia are generally required to build on it within four years under rules designed to ensure land is put to productive use and contributes to housing supply.

3. "Low blow" migration cuts could raise grocery prices: farmers

Farmers say the federal government's plan to make backpackers wait longer for work visas will push up grocery prices and could lead to shortages on supermarket shelves.

Responding to the government's plan to cut migration announced this week, the National Farmers' Federation (NFF) said new processing times for visas would lead to a labor shortage.

"Working holiday makers fill about one in seven farm jobs, making them central to getting food and fibre produced, harvested, packed and into supermarkets," said NFF President Hamish McIntyre.

"When farms cannot get workers at the right time, crops are left unpicked, livestock care becomes harder... and households ultimately pay the price at the checkout."

One of the migration changes the government announced on Thursday was to "stabilise" processing times for working holiday maker applications at three months.

The NFF says approvals previously took just days.

Federal immigration minister Tony Burke rejected farmers' claims in a comment to The Guardian.

He said the government's changes would allow quicker visa approvals in other vital industries and that growers could still bring in workers on Pacific labour schemes.

4. Major airlines earning billions despite fuel crisis

Australia's two biggest airlines are still raking in billions of dollars, despite having to pay much more for jet fuel, according to the national competition watchdog.

The Australian Competition and Consumer Commission (ACCC) said the earnings show how well the carriers have fared in a "highly concentrated" domestic aviation market.

The ACCC's latest report on the local airline industry reveals Qantas earnt $2.35 billion before interest and tax in the 2025-26 financial year, while Virgin Australia took in $753 million.

The watchdog noted the "strong results" came despite jet fuel costing nearly 50% more in August this year than in February.

In April, Qantas and Virgin announced they would charge customers more for tickets and reduce capacity on some services to deal with the higher fuel overheads.

The ACCC noted that, despite this squeeze, the carriers were still enjoying strong passenger demand.

But it said the dominance the companies enjoy domestically gave consumers few other options.

"These results highlight the financial resilience of the two largest operators in Australia's highly concentrated domestic aviation market."

5. Scamwatchers flag return of summer ticket cons

Aussies desperate to see their favourite acts or sporting teams this summer are being warned to watch out for scammers selling fake tickets.

Western Australia's government ScamNet service expects fake ticket scams to increase as we head into the warmer months and believes cases are already on the rise.

It said Western Australians had already lost more than $1000 to scams in the first few days of this month.

The group said WA could see a repeat of last summer, when more than 80% of scam losses occurred during warmer months as festivals, outdoor concerts and other events ramped up.

ScamNet says people looking for tickets for popular events should avoid online ads for secondhand passes or offers from sellers on social media whose profiles appear new.

It also recommends sticking to an event's official resale platform and, if buying from a private seller, using PayPal rather than bank transfer.

One Australian woman lost $317,000 to a romance fraudster. Pet insurance premiums have surged. Major banks are cutting travel insurance perks. And your boss may be able to make you take annual leave over Christmas.

How closely have you been following the money stories shaping Australians' finances? Take this week's 10-question Money Quiz and see if you can score full marks.

It takes less than five minutes, and you might learn something that saves you money.

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This week's topics

• Pet insurance premium hikes.
• Credit card travel insurance changes.
• Romance scams and financial fraud.
• Annual leave and workplace rights.
• Investing strategies and sharemarket news.

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The exchange-traded funds (ETF) fee war has been good for investors. Providers keep cutting fees as they compete for investor money, and that means more of your money stays invested rather than disappearing in costs.

I've long been a champion of investors keeping their fees as low as possible, but once fees get very low, the difference between one ETF and another can become tiny.

If two ETFs differ in fees by only one or two basis points, there are other things worth looking at before blindly choosing the cheaper one.

Start with what you are actually buying

Two ETFs can sound similar but give you quite different exposure. Take broad Australian share ETFs.

One might track the S&P/ASX 200 and hold around 200 of the largest listed companies. Another might track the S&P/ASX 300 and hold around 300.

International ETFs can very much more.

One could be heavily weighted towards US technology companies, while another is spread more broadly across countries and sectors. Currency exposure can also differ, with some ETFs hedged back to Australian dollars and others left exposed to movements in the currency.

The companies the ETF holds determine where your returns come from and what risks you're taking.

A tiny fee saving is usually much less important than ending up with the wrong exposure.

The management fee is not the whole cost

The annual management fee gets most of the attention because it is easy to compare, but it isn't the only cost.

ETFs also have a bid-ask spread when you buy or sell. For large, heavily traded ETFs, this can be small, while more specialised ETFs can have wider spreads.

Trading costs are another part of the picture, particularly when annual fees are already very small.

Why the index return isn't always your return

An index ETF has a fairly simple job: follow a benchmark such as the S&P/ASX 200 or S&P 500.

But the return from the ETF won't always exactly match the return from the index, this is known as the tracking difference.

How the fund buys and sells investments, handles index changes, manages cash, its tax treatment and the fees it charges can all affect how closely it follows its benchmark.

So, if you're comparing two ETFs tracking the same index, a lower management fee doesn't tell you everything. It's also worth looking at how closely each has actually tracked the index over time.

Look at concentration

An ETF might own hundreds of companies but still have a large chunk of the portfolio sitting in its top 10 holdings.

Another may spread its money much more evenly. That matters when comparing ETFs with similar fees.

One might cost a fraction less but have much more of your money tied to its largest companies, sectors or themes.

Concentration isn't necessarily a problem if that is the exposure you want, but it does increase risk.

If a large share of the ETF is invested in just a few companies or sectors and they fall, that can drag down the ETF's overall return

Look at the largest holdings and their weights, not just the total number of companies.

And, look at how your ETFs work together

When you own several ETFs, look at how they fit together too.

Two ETFs can overlap more than you think, holding many of the same companies or giving you similar exposure and leaving your overall portfolio more concentrated than it looks.

This is something we consider at InvestSMART when building our portfolios. We combine ETFs across different markets and asset classes, with the aim of avoiding unnecessary overlap and building a well-diversified portfolio.

Of course, fees still matter

None of this means investors should stop caring about fees.

Over long periods, high fees can eat into returns. But once costs are already very low, the cheapest ETF isn't automatically the most suitable one.

The man Hall loved called her up to 10 times a day. They talked about their future together. He seemed attentive, successful and trustworthy, an experienced finance executive who wanted to help her become more financially secure.

Hall had occasional doubts, but nothing that prepared her for what came next.

Then she saw his face in a Crime Stoppers video.

The man she knew as Max Tavita was actually Hamish McLaren, a career fraudster who had spent decades moving through false identities and other people's lives.

The relationship Hall believed was real had been carefully engineered to win her trust. The investment accounts she thought were in her name did not exist.

The documents were forged. The $317,000 she believed was being invested for her future, including the superannuation she had spent more than 20 years building, was gone.

Today, Hall, 50, is an author, speaker and advocate for victims of financial crime. After a 26-year career in corporate marketing, she left the executive world following the release of her book The Last Victim, which tells the story of how she became one of McLaren's victims.

The man she loved never existed

The man she knew as Max Tavita was actually Hamish McLaren, a serial fraudster who had spent 30 years moving through false identities and other people's lives.

The relationship Hall had believed was loving and intimate had been engineered to gain her trust.

The investment documents were forged. The $317,000 she believed he was investing in her name, including the superannuation she had built over more than two decades, was gone.

"It decimated everything I believed about myself and my ability to make decisions.

"I was very much in love with him. When he was arrested, I had to get my head around the fact he was gone. It felt like a death. Then I realised that he never actually existed," she says.

McLaren was convicted of defrauding 15 Australian victims of more than $7.6 million. His offending became the subject of journalist Greg Bearup's podcast Who the Hell is Hamish? for The Australian.

McLaren was released on parole in July this year. Hall cannot undo what he did, but she can use the experience to protect the next person.

How she became Hamish McLaren's target

Hall grew up on the Gold Coast, Queensland, with two brothers in a close, hardworking family.

Money was not a regular topic of conversation.

"It was considered an adult issue," she says.

At 18, Hall left Australia to travel through Europe and later lived in India for a year.

She returned to study sports science, but found herself drawn to the business of sport.

That led to sports marketing and a job at Sydney's Olympic Stadium before the 2000 Games.

By the time she met McLaren on a dating app in 2016, Hall was a single mother with a six-year-old daughter, a senior role in corporate marketing and a life running close to capacity.

"I wasn't a naive, sheltered person," she says.

"I was independent, had lived in different countries and had held many different jobs."

McLaren carefully built Hall's trust over nearly a year and a half inside what she believed was a committed relationship.

He presented himself as a finance professional with decades of experience working around the globe.

When he offered to help organise her money, it appeared to be a caring gesture.

"He saw how hard I was trying," she says. "He told me: 'I want you to be financially independent'."

Hall did not believe she was handing him cash to control. She thought the investments and accounts were hers.

"I never gave him money. I thought it was all in my name, but all the documents were forged," she says.

Looking back, one of the biggest lessons is how easily control can be disguised as support.

"Financial abuse never comes in waving a big red flag," she says.

"It comes disguised as care and concern and 'let me help you', which is exactly what he did to me."

Rebuilding after the betrayal

After McLaren's arrest, Hall spent three weeks helping police reconstruct the relationship.

She had to go back through 16 months of messages, emails, conversations, financial documents and memories.

There were also gaps that nobody could fill.

Police could reveal little while the investigation was underway. Financial institutions were constrained by the criminal proceedings.

Hall was left trying to rebuild the story of her own life without all the pieces.

Only a small circle of family and friends knew.

She was protecting her daughter and career while carrying the shame so often placed on victims of financial crime.

Then came the practical reality. She had no savings to fall back on and only her monthly income.

Hall returned to her executive role at eBay and doubled down.

"I was terrified of losing my job. Without it, I knew I'd be completely screwed," she says.

How she rebuilt her finances

Hall was 42 when her money was stolen and 43 when she started rebuilding her finances.

Before meeting McLaren, she understood money well enough. The problem was that she kept postponing the practical jobs.

"I wasn't financially illiterate," she says. "I was financially avoidant."

She knew she needed to sort out her insurance, super, will and retirement plan.

But as a busy single parent with a demanding career, it kept slipping down the list.

After the fraud, she could no longer put it off.

Hall found a financial adviser and together they established a budget, arranged insurance, restarted her superannuation and created a plan to build assets outside it.

With a shorter investment runway, she had to be disciplined.

Money was siphoned from her salary into a portfolio whenever possible.

Eventually, she saved enough to buy the apartment she had been living in.

Her retirement strategy now combines superannuation, investments and her home.

She meets her adviser every six months, reviews her progress and adjusts the plan when her circumstances change.

Being deceived by McLaren changed the way Hall approaches money in relationships, too.

She now asks the uncomfortable questions, reads every document and makes sure she understands exactly what she is signing.

Someone once gave her a piece of advice that stayed with her: don't outsource the education, outsource the execution.

"Take agency," Hall says.

"Don't assume the other person will take care of it. Make sure you are across everything, you understand everything, you go to all the meetings."

Financial vulnerability, she points out, is not limited to fraud.

It can follow a divorce, redundancy, illness, natural disaster or death in the family.

"You don't have to lose your life savings to a conman to be financially vulnerable," she says.

For couples, that means discussing what is mine, yours and ours, and what happens if circumstances change.

From victim to advocate

For years, Hall resisted speaking publicly.

She had a career and daughter to protect, and little appetite for the judgment directed at victims.

The way romance fraud was reported only made it harder.

Victims were often portrayed as lonely, gullible or somehow responsible for what happened, with the grooming and psychological manipulation used against them getting less attention.

"I can understand why people don't come forward," she says.

Meeting Bearup changed her thinking.

Although some of those closest to her advised against going public, Hall had rarely heard an account that reflected the reality of her experience.

"The more we talk about it and share these stories, the more financial crime becomes part of open discussion," she says.

Money itself was already difficult enough to discuss.

Few people talk openly about what they earn, where they invest or what they have lost.

That silence creates the perfect conditions for criminals to isolate their targets, she says.

Hall began writing The Last Victim in 2023, seven years after her relationship with McLaren began.

By then, she had undergone years of therapy, reflection and rebuilding.

When the book launched, Hall left her 26-year corporate career and started her own business.

She now speaks at conferences, corporate events and financial organisations, runs workshops, advocates for victims of financial crime and writes about scams and fraud from the victim's perspective.

The career change has reduced her income, at least for now.

But Hall is building the business deliberately and believes in the work she is doing.

"The world needs people who will stand up and advocate for people who don't yet have a voice," she says.

Why smart people still get scammed

Hall wants people to understand that modern scams are not simply a matter of spotting a clumsy email or suspicious link.

Many are run by professional criminal organisations with data, scripts and technology years ahead of what most of us encounter day to day.

"These are not opportunistic creeps in a basement down the road. This is industrialised crime," she says.

The first line of defence is accepting that intelligence, education and professional success do not make anyone immune.

"We all like to think that we're less vulnerable than we are," she says.

But everyone can have an off moment.

A convincing message may arrive when you are distracted, under pressure or rushing to get things done.

"Being targeted at the wrong moment with the right thing, we are all vulnerable."

Nor does financial crime fit a single demographic.

At Hall's speaking events, women often raise their hands to share their experiences with the room.

Men tend to wait.

"They'll come up and whisper, 'This happened to me'," she says.

And the most common target may not be who you think.

A senior fraud executive at a major Australian bank recently told Hall that men in their sixties were the group most often targeted, perhaps because they may have accumulated savings and feel confident assessing investment risks.

"It's not just women who get scammed," she says. "It's just that men don't say it loudly."

Hall's advocacy ranges from better support services for victims of financial crime to compulsory government-issued identity verification on dating apps.

She is also concerned about the growing use of artificial intelligence, fake profiles and coercive tactics online, including teenage sextortion.

Hall believes society needs to develop what she calls "trust literacy".

"We're taught financial literacy and digital literacy, but rarely how trust is created, transferred, exploited or defended," she says.

"And we're in a world where trust is being eroded more aggressively than ever."

Turning loss into purpose

At 50, Hall has turned the worst experience of her life into a new career.

"I'm excited that this horrible experience has given me an opportunity to reinvent myself," she says.

"I know these conversations are having an impact."

She is also optimistic about the role Australia could play in improving digital safety.

"I'm excited about Australia possibly being a leader to the rest of the world," she says.

The crime may always be part of Hall's story.

But she is determined that it will also help shape what happens next.

"What's done is done, I can't change it," she says.

"What I can do is try and make it better for the next person."

To contact Tracy Hall about a keynote or workshop, visit tracyhall.com.au.

From earning frequent flyer points to accessing perks like airport lounge passes, there are plenty of reasons why Australians have been drawn to premium credit cards, despite their higher cost.

One of the more valuable features has been complimentary travel insurance - cover many jet-setting cardholders will have relied on while travelling abroad.

But with card providers flagging major changes ahead of the upcoming ban on debit and credit card surcharges, cardholders may need to think twice before assuming they're covered.

So, what's changing, and can travellers still rely on their credit cards for travel insurance?

Has your bank cut credit card travel insurance?

Ahead of the October 1 ban on card surcharging, card providers have announced some significant changes, including higher annual fees, lower points earn rates and scaled-back insurance cover.

"Some of the country's biggest banks are winding back or cutting their travel insurance cover benefits, with each adopting a different strategy which adds to the confusion," says Warren Duke, travel insurance expert at Compare the Market.

"In some cases, new criteria have been added to access benefits, such as ANZ's move to three levels of insurance benefits from December 9.

"ANZ says some cards will have reduced cover or will have benefits removed, while other cards will no longer include complimentary travel insurance."

ANZ isn't the only major bank taking action. Travel insurance benefits like baggage cover and interstate flight inconvenience cover will no longer be included on CommBank's Gold and Gold and Platinum Awards cards from September 29.

Westpac is also reducing the scope of the travel insurance across its Black and Platinum card suite from October 1, removing cover for trip cancellation, travel delays and luggage.

NAB, on the other hand, already removed travel insurance from a number of its credit cards back in May.

Given the extent and variety of changes being rolled out, Duke has urged cardholders to dig into the details related to their own cards - especially those with upcoming travel plans.

"Travellers who have relied on complimentary credit card based travel insurance will need to be even more wary due to these changes, and should always double-check the bank's fine print.

The insurance fine print travellers often miss

Beyond keeping an eye out for any future changes, cardholders may also want to ensure that they don't fall into the trap of assuming that they're automatically covered.

"Card-based travel insurance can provide valuable cover, but there are often more conditions attached than travellers realise," says Natalie Smith, travel insurance expert and head of marketing at Comparetravelinsurance.com.au.

"One of the crucial things to check is whether you actually meet the eligibility requirements. In many cases, travellers need to have paid for a minimum amount of their trip using the eligible credit card, and some policies may only cover the cardholder rather than everyone travelling with them."

Travellers should also take a close look at the level of coverage being provided, Smith suggests.

"Card-based policies can have lower limits for certain benefits, higher excesses and restrictions around things like age and pre-existing medical conditions.

"Some credit card policies don't provide cover for pre-existing medical conditions, while others may offer cover subject to specific conditions, so travellers should check the policy carefully.

Are rewards cards still worth it for travel insurance?

Whether it's points or insurance, the recent credit card shake-up will have prompted plenty of customers to ask themselves whether their rewards card still stacks up.

Ultimately, the calculation will depend on whether cardholders still feel that the value the insurance provides outweighs the cost of the card.

"Many customers that travel overseas frequently will feel like they're losing a great perk, but it's worth remembering that insurance included on a credit card that has a high annual fee was never really free to begin with," Duke argues.

"So, unless you were already using the card and taking advantage of the other points benefits, getting a credit card for travel insurance cover alone probably wasn't the best-value option in today's competitive travel insurance market."

When does standalone travel insurance make sense?

While card-based insurance may still be a more convenient option for some cardholders, there are situations when it might not be enough for a traveller's needs. An alternative is a standalone policy from a travel insurer.

"If your card insurance has lower medical or cancellation limits, a high excess, age restrictions or doesn't cover a pre-existing medical condition, a standalone policy is likely a better option," Smith says.

"The same applies if you're travelling with family and the card policy doesn't provide adequate cover for everyone in your travelling party.

"Travellers should also consider the type of trip they're taking. If you're planning activities such as skiing, cruising or trekking, check that your card-based policy covers those activities and any specific conditions that apply."

Reader question

Hi Paul,

We are immigrants and are investing in a landscape that is unfamiliar. We moved here after all our children became Australian citizens.

We are now too, at the age of 74 and 67.

We live in a granny flat and contributed to a house big enough for three generations.

Now we need advice about where to invest and earn a monthly income for our living expenses. We will not receive a pension for about 10 years.

We have $600,000: $100,000 in a high-interest savings account, $250,000 to $300,000 in super, and the remainder in ETFs.

I need to keep fees low with a good return. Can you help with information on super funds and companies with low-cost ETFs?

Am I on the right track? - Elizabeth

Paul Clitheroe's response

We have something in common, Elizabeth, except at very different times in our lives.

My parents moved to Australia as 10-pound Poms way back in 1963 when I was eight and my sister was four. I do remember it took my parents some time to understand the financial environment here, particularly our quite peculiar tax system.

We also live with three generations in our family home. Our middle daughter moved back home with her husband and two children while they build a new house.

For our readers wondering about the 10-year wait for an age pension when you are both at qualifying age, this is not an income or assets issue. It is the newly arrived resident's waiting period.

I'd have to steer you to a financial adviser for specific advice, but in broad terms I don't see a problem generating $30,000 a year, plus Christmas presents for the kids and grandkids, from $600,000.

You only need to generate 5% a year on your $600,000 to do this. If investing in joint names, tax should not be a major issue.

Frankly, I think you have an excellent plan. I'd do something similar.

It is a good idea to keep about $100,000 in a super-safe, high-interest bank account. I imagine you would earn more than 5% on that, so there is about $5000 a year to start with.

But we do need to think about inflation.

Super is a terrific asset for retirees, but I am definitely going to direct you to an adviser, or the advice team offered by major super funds.

Obviously, I'd want you in a large, low-cost super fund and, given your cash reserves of $100,000, I'd suggest you talk to them about a balanced investment option.

I suspect a pension from super may be the way to go, but talk to your chosen fund and seek advice. If a pension is the right option for you, there is another 5% being paid to you on, say, $300,000. That is another $15,000 a year.

Finally, yes, a low-cost ETF is a good way to get global diversification for incredibly low fees. As a starting point, you could look at Betashares, Vanguard and iShares, although there are plenty of providers.

About $200,000 will give you excellent global diversification and, at about 3% income, another $6000 or so in annual income.

This would leave you a little short of your $30,000 target, but you could comfortably look at a higher-income ETF, draw a little more from super, or supplement your income from your $100,000 cash reserve.

The key point here is that you are not asking for miracles. A return of 5% a year from a balanced portfolio, plus some inflation protection, is historically a very conservative objective.

I hope you enjoy this beautiful country as much as I have.

What to read next

• What is an ETF? A beginner's guide to exchange traded funds
• Paul Clitheroe: From England to Australia
• Are you beating the average? How much Aussies have in super
• How to live with extended family without drama
• Ask Paul: I grew up poor, now I'm worried my kids are spoilt

We've been taught to think about money in remarkably individual terms. Build your career. Pay off the mortgage. Grow your super. Invest wisely. Retire comfortably. Spend cautiously. Leave whatever is left to the children.

For decades, that has been the blueprint for financial success. But now that we're expecting to live to 100 rather than 64, I wonder if we're asking the wrong question. Instead of asking, "How much money do I need before I die?", perhaps we should be asking, "When can my money do the most good?" Because they're not the same thing.

Imagine two scenarios. In the first, your children inherit a substantial sum when they're in their sixties. The mortgage is almost paid off, the kids have left home, and retirement is just around the corner.

In the second, they receive financial support in their thirties or forties. It helps them buy their first home, navigate the expensive years of raising children, start a business, retrain for a new career or simply breathe a little easier during one of life's inevitable rough patches.

The dollar amount might be identical. The impact almost certainly isn't.

When can your wealth do the most good?

As a behavioural economist, I've become increasingly interested in what I call the timing value of money.

We spend enormous amounts of time trying to maximise the financial return on our investments, but surprisingly little thinking about when those investments create the greatest return for the people we love.

Perhaps that's because this isn't really a financial problem. It's an emotional one.

One of the great paradoxes of retirement is that the older we become, the more uncertain the future feels.

We don't know how long we'll live. We don't know what healthcare will cost. We don't know what governments will change, what markets will do or whether we'll eventually need residential aged care.

Why 'just a little bit more' is never enough

So we do what humans have always done in the face of uncertainty. We accumulate. We keep "just a little bit more" because it feels safer than having "not quite enough".

The irony is that humans are notoriously poor at predicting the future. We routinely overestimate how much certainty we'll need and underestimate our ability to adapt when circumstances change.

We insure against events that may never happen, while often overlooking opportunities that are sitting right in front of us.

Fear is a brilliant survival mechanism. It's not always the best financial planner.

This isn't an argument for recklessly giving your money away or assuming your children will become your retirement strategy. Every family's circumstances are different, and maintaining your own financial independence remains incredibly important.

But there is another way to think about wealth.

Instead of seeing it as something to preserve until the very end, we might see it as something to deploy intentionally across generations.

Helping a child into the housing market. Paying for a grandchild's education. Supporting a family member through illness, career change or parental leave. Creating shared family experiences while everyone is healthy enough to enjoy them.

These decisions may not maximise the size of your estate, but they may maximise something far more valuable.

Stronger families.

What kind of legacy do you want to leave?

Historically, wealth wasn't simply transferred through wills. It flowed through families over decades. Parents helped children establish themselves. Adult children helped ageing parents remain connected and cared for. There was an understanding that resources, responsibilities and relationships moved in both directions throughout life.

Somewhere along the way, many of us began treating financial independence as though it meant complete financial isolation. Perhaps it doesn't have to.

This requires a significant mindset shift because it asks us to move from a scarcity mindset to an opportunity mindset.

Scarcity asks, "What if I need this money one day?"

Opportunity asks, "What could this money achieve today?"

Both are reasonable questions. The challenge is making sure fear doesn't become the only voice in the conversation.

This is where emotional agency becomes surprisingly important.

Emotional agency is the ability to use your emotions deliberately to drive decisions based on your values, rather than simply reacting to fear, excitement, anger or the mindless pursuit of pleasure.

Fear tells us to protect. Anxiety tells us to delay. Uncertainty tells us to wait until we know more.

But values invite a different conversation.

What kind of family are we trying to build? What memories do we want to create? What opportunities do we want to provide? What legacy do we want to leave?

Notice that none of those questions is actually about money. Money is simply the tool. The real investment is in the people.

The greatest financial return you'll ever achieve may not be found in a share portfolio or a superannuation statement. It may be found years from now, around a family dinner table, when your children remember not just what you left them, but how you used your wealth to strengthen the family while you were still there to enjoy it.

After all, wealth was never meant to be an end in itself.

Its greatest value lies not in the things it accumulates, but in the people it enables. And how much is it worth to see your family thrive?

I should make it my aim to come up with a better term. But I'm a finance nerd, not a creative genius, so instead, I'll give a Freddo Frog to anyone who can come up with a better one. Especially because it's a really important idea that will not only help you build long-term wealth, but also ride the waves of volatility.

Here's the idea.

Previously, I've talked about saving money every payday, and investing that money as regularly as you can (keeping costs low as you go).

Let's use a hypothetical example.

You decide to invest every month. In the first month, the shares are $9 each. Next month, $10. The month after, $9.50. Then $11, $10 and $10.50.

At the end of six months, that $10.50 price is higher than some of the prices you paid, but lower than others. But what if you'd bought only once? Maybe you'd have paid $9. At the end of that six-month period, you'd have made a nice gain and probably feel pretty good.

And if you'd only bought once, say, in month four? You'd have paid $11, and be nursing a small but disappointing loss.

Smooth sailing

Now, in an investing lifetime, one company, bought once isn't going to make or break you. Even buying a few companies a few times won't.

But if you're making only very occasional, large purchases, you're putting a lot of store in your ability, or luck, to buy for the right price at the right time.

Dollar-cost averaging, by comparison, suggests that buying small amounts regularly smooths, or 'averages', your cost. Hence the (clunky) name.

It removes the need to try to time the market, by giving you an average(-ish) price.

Let's say you invest $200 per month for a year. Sometimes the price is up. Sometimes it's down. It'd be nice for the share price to just go up after you bought, of course, but there's something else at play here. Just look at how your purchasing power expands when the price falls (see table, opposite).

No-one likes a smaller portfolio. But because you keep buying, in the 'down' months you get more shares for your money!

You own more of the company now than if the share price had simply only gone up.

On the straight and narrow

Here's the other way to look at it through a behavioural psychology lens: if you buy today at $10, and the share price drops to $9, you get to buy the next lot at a cheaper price. And if you buy today at $10 and the share price rises to $11, you've made money.

Now, that's selective use of data and arguments, of course, but the point is that it helps keep us on the investing straight and narrow, and keeps us buying.

See, I've heard plenty of people take one of two opposing views based on how they feel about share price movements.

When a share price falls, some people will say, 'Great, it's cheap. I should buy more', while others will say, 'Nah, it's falling... I'm not buying'.

On the other hand, when prices rise, some worry that 'I've missed it', while others say, 'It's going up... I'll buy'.

I'll level with you: None of those approaches is right, based only on share price movements.

Maybe the stock that's gone up is now too expensive. Maybe the one that fell is down because the business is tanking. Or maybe the shares are up because the business is growing strongly, or down because of sentiment, not business reality.

In other words, there is nothing to learn from past share price movements!

But dollar-cost averaging, when committed to as a strategy, allows you to put those psychological demons to rest. It allows you to make your investing more mechanical, adding regularly as long as the company is worth investing in at the current price.

It won't give you the lowest price ever, but then nothing other than luck will ever do that.

And you could be more involved if you wanted, picking which company's shares you buy when, if that's your preference.

But for many, perhaps most, people, dollar-cost averaging is a form of the 'pre-commitment'. And it can be a serious help when it comes to getting invested, remaining invested and adding to your investment snowball as it rolls steadily downhill, picking up more snow as it goes.

Now, let's unpack one of the most powerful acronyms in investing.

The Pareto Principle

You might have heard of a bloke called Pareto, after whom the Pareto Principle is named. You've almost certainly heard his idea expressed more simply as the 80/20 rule.

The idea is that 80% of a result comes from 20% of the effort. Maybe 20% of a company's customers deliver 80% of the revenue. Maybe 20% of a company's customers are responsible for 80% of complaints, too!

(Apparently, or apocryphally, Pareto discovered that 80% of the peas he got from his garden came from 20% of the plants!)

You get the drift. It's commonsense, and a concept that you probably have personal experience with, even if you didn't consciously think about it as the 80/20 rule.

It won't surprise you to learn that the same thing applies, directionally at least, Pareto is essentially a rule of thumb, in investing.

Except it might be closer to 90/10 or 95/5.

The vast bulk of your return will be driven by your savings rate and investing horizon. A little extra (the 5%, 10% or 20%) might come from the time, effort and energy you put into trying to outsmart the market.

Maybe.

The Pareto Principle isn't an iron law, but it is an observation that getting a few big things right is generally the key to success in most endeavours.

In investing, that's probably your savings rate, your investment horizon, diversification, dollar-cost averaging and patience.

By all means, chase the extra return if you have the opportunity... just make sure it doesn't backfire on you, instead.

What really matters

Complex strategies rarely outperform simple, disciplined approaches.

Diversification and consistency matter far more than cleverness.

Simplicity makes investing easier to stick with when markets become volatile.

This is an edited extract from Chapter 9 of The One-Page Investing Plan: start simple, stay patient, build serious wealth by Scott Phillips (Wiley, $34.95). Enter now to win one of five free copies.

As vet bills continue to climb, some households are sticking with insurance for peace of mind, while others are choosing to build their own emergency fund instead.

Almost half of Australians would struggle to cover an unexpected $3000 vet bill, according to research from Canstar, while Finder found one in four pet owners have delayed taking their animal to the vet because they're worried about the cost.

It's a dilemma affecting millions of households.

Australia is home to 31.6 million pets, with 73% of households owning at least one animal companion, according to Animal Medicines Australia.

Many of those pets joined the family during the pandemic boom, but as they get older, the cost of caring for them is starting to bite.

Australians spent a staggering $21.3 billion on their pets in the year to March 2025, including $1.9 billion on veterinary care.

With treatment costs rising and pet insurance premiums following suit, owners are increasingly being forced to choose between paying more each year for cover or taking the risk that their savings will be enough if their pet needs expensive treatment.

Pet insurance costs on the up

Taking out pet insurance is one way to deal with these costs, but the premiums on these policies have undergone their own inflation -- in some cases, significantly.

Canstar's research found average annual premiums for accident and illness cover increased by 26% for dogs and 27% for cats over the last year. Average premiums for large dogs went up by 29%.

With annual insurance bills averaging over $1700 for dogs and almost $1000 for cats, it's hardly surprising Aussies are believed to have spent $1 billion on pet insurance in the 12 months to March 2025.

Experts say the increasing sophistication of animal care and veterinary procedures is a key reason for the increase.

But Canstar data insights director Sally Tindall says increasing demand on vet services is also to blame.

"There's been a rise in pet ownership since Covid," she says. "A lot of people decided that was the time to get a pet and so that is increasing demand, which is putting pressure on cost".

So is pet insurance still worth it?

Even before the latest premium hikes, many of Australia's pet owners had already decided insuring their pet was too much of a financial burden to be worthwhile.

Last year's Animal Medicines survey found 86% of cat owners and 76% of dog owners hadn't insured their pets, with most saying they thought the policies on offer were too expensive.

Of course, not having cover for your pet means you'll have to dip into your savings to cover any vet bills.

Experts say building up an emergency fund in a high-interest savings or mortgage offset account is a smart way to prepare for going down this self-insurance route.

Relying on your savings can be useful if you're only expecting to deal with minor or routine procedures or if you have an older animal with pre-existing medical conditions insurers may not agree to cover.

But experts warn vet bills for serious ailments can quickly swallow your savings.

"Pets can actually be quite expensive in the first couple of years... costs can come completely out of the blue and easily rise into the thousands, sometimes tens of thousands of dollars".

"Even if you are putting that money away every single month [into savings] for your pet, it only takes one major surgery or incident to completely drain that account," says Finder's insurance expert Ceyda Erem, who notes pet insurance can be useful if your animal has long-running health issues.

"With an insurance policy, you get an annual limit which refreshes every year, so you do have a bit more of a buffer to play with when it comes to getting treatment for your pet".

What to compare to make sure you're getting the right pet insurance policy

If you've decided to take out pet insurance, Finder and Canstar recommend checking these aspects of each policy to get the best deal.

1. Level of cover

Most policies will require you to cover a portion of the vet bill, called an excess or copayment. This can vary by policy, with Canstar finding some policies require you to pay for as much as 40% yourself.

2. Limits

These are caps on the amount you can claim every year. According to Finder, these can vary from $2000 to an unlimited amount. A lower limit usually means a cheaper policy, but note that serious vet procedures like surgeries can exceed $20,000.

3. Better deals

Canstar found you could save up to 42% over a year by choosing a cheaper provider over a more expensive one, so shop around and see if different insurers will provide you with a similar policy for less.

If Australia's August reporting season has a key message to deliver, it's that the market's patience is wearing thin.

At a headline level, the reporting season looked healthy enough. Earnings growth was the strongest in four years, dividends rose, and several sectors produced standout results.

But scratch beneath the surface and a different story emerges.

This was a reporting season defined by sharp reactions, widening performance gaps and a market increasingly focused on execution rather than optimism.

The days of a rising tide lifting all boats appear to be fading and every company is now being tested on its own fundamentals.

That was reflected in the volatility. Almost half of ASX 200 companies experienced a single-day share price move of at least 5% in either direction during August.

Combined with February's reporting season, 2026 was one of the most volatile reporting years in recent memory.

Investors rewarded results and punished excuses

Investors should note that this volatility was not random. Companies that delivered strong results and credible guidance were rewarded.

Those that missed expectations, however narrowly, were often punished immediately and sometimes brutally. In many cases, it was not the result itself that mattered most, but what management teams said about the road ahead.

That is where the more concerning signals emerged. While earnings growth was strong, much of that strength came from the resources sector.

Strip mining out of the equation and earnings growth drops back into a far from inspiring single digit growth.

The rear-view mirror looks better than the road ahead. Company guidance broadly disappointed relative to consensus expectations and forward ASX 200 earnings forecasts have continued to drift lower.

Markets are ultimately forward-looking. Investors care far more about where profits are heading than where they have been.

And on that measure, enthusiasm is becoming harder to find.

The real test wasn't earnings, it was guidance

Mining was the clear standout winner of reporting season. Materials rose 12% during August as earnings upgrades flowed through the sector.

BHP reclaimed its position as Australia's most valuable company, with investors increasingly focused on its long-term copper growth pipeline and the role critical minerals are likely to play in global electrification and AI infrastructure buildouts.

Healthcare was another notable winner, surging almost 19% for its strongest monthly gain in more than a quarter of a century.

After a prolonged period of valuation pressure and lacklustre performance, investors were willing to revisit the sector as earnings momentum improved and cost-control measures began to gain traction.

CSL was the obvious headline, rising 17% on reporting day despite describing FY27 as something of a reset year.

The market looked through the near term and focused on the longer-term earnings trajectory.

Mining and healthcare emerged as the clear winners

At the other end of the market, consumer discretionary, property and the major banks struggled.

Retail results from companies such as JB Hi-Fi and Harvey Norman reinforced concerns about the consumer.

Elevated interest rates, softer housing conditions and ongoing pressure on household budgets are creating a clearer divide between businesses exposed to discretionary spending and those with more defensive earnings profiles.

The major banks faced their own challenges.

Commonwealth Bank's 10% decline in August highlighted weakening earnings momentum and increasingly difficult comparisons after years of strong performance. Investors are beginning to question how much growth remains available when margins are under pressure and competition for deposits remains elevated.

For those seeking exposure to financials, the risk-reward balance is shifting.

In this environment, we'd rather be the bank's lender than the bank's owner, favouring the income and credit stack over equity risk.

Why investors turned on some market favourites

Perhaps the most important lesson from reporting season was what it revealed about stock picking.

Nearly half of Australia's largest listed companies underperformed a simple broad-market exposure such as the Global X Australia 300 ETF (A300) during the month. That should give investors pause.

Identifying tomorrow's winners is becoming harder. Long-term global research tells a similar story.

Most individual stocks fail to outperform the broader market over time, and many ultimately generate negative shareholder returns altogether.

What this means for investors now

Broad diversification will never be the most exciting strategy in the market, but what it can do is provide exposure to the winners without requiring investors to know who they will be in advance.

When every company is being tested on its fundamentals, owning the whole garden can be a far more reliable approach than trying to predict which seeds will grow tallest.

Millions of Australians will soon be planning Christmas holidays, but many workers may not realise their employer can direct them to take annual leave during a festive season shutdown.

Workplace experts say employers can require staff to take leave in some circumstances, reject leave requests and even direct employees with excessive leave balances to take time off.

Here's what Australian workers need to know before booking their summer break.

Do you have to take annual leave during a shutdown?

Closures over the summer are common in government agencies and private businesses, but whether a worker will need to dip into their annual leave during that shutdown depends on the organisation.

If they're not covered by any award or enterprise, the Fair Work Ombudsman notes that an employee can be required to take paid annual leave - if that requirement is reasonable.

What if someone's leave balance isn't large enough to cover the shutdown though?

"If an employee does not have enough leave accrued, an employer cannot force an employee to take leave without pay," says Madeline Hill, general manager, talent strategy and advisory at Randstad.

"Instead, the employee and employer can mutually agree in writing to consider options like utilising accrued time off, annual leave in advance, or unpaid leave.

"If no agreement is reached, the employer must generally pay an employee's ordinary wages for the duration of the shutdown period."

Can your employer force you to take annual leave if you have too much saved up?

Beyond shutdown periods, there's a second situation in which an employee can be directed to take time off: when they've accrued an excessive amount of leave.

What counts as an excessive annual leave balance though?

The Fair Work Ombudsman lays it out as more than eight weeks of paid leave, or more than ten weeks for shift workers.

"The direction to take leave must be reasonable, provided in writing and usually requires the employer to give you at least eight weeks' notice," Hill explains.

"The goal is to ensure employees actually take a break to rest and recharge rather than treating leave simply as a financial payout."

When can an employer refuse annual leave?

Many employees will assume that they are free to take annual leave whenever they choose. That's not necessarily the case though.

As Hill explains, in addition to being able to require employees to take leave in some cases, employers can also reject leave requests in some situations which are considered reasonable.

"This typically includes requesting leave during an industry's peak demand period (like retail during the festive season or accountants during end of financial year), if multiple team members have already booked leave for the exact same dates, or if you do not have enough leave accrued.

"Employers will generally communicate why they have refused your leave request quickly and work with you to find an alternative window that suits both parties."

That's why it can be useful for workers to get their leave requests in early and to have them confirmed before booking flights for an overseas holiday.

Can you use a stat dec instead of a medical certificate for sick leave?

It's a common dilemma: how do you get a medical certificate when you're too sick to leave home and doctors' appointments are hard to come by?

As it turns out, a medical certificate isn't the only option workers can use as proof of illness when lodging a sick leave request.

"Under the Fair Work Act, a statutory declaration is generally recognised as valid, reasonable evidence of your illness or injury, especially when securing a doctor's appointment on short notice is difficult," Hill says.

"While employers are legally allowed to request evidence for even a single day of sick leave, a properly completed and witnessed statutory declaration satisfies the legal requirement in most Australian workplaces."

With Christmas shutdowns approaching, workplace experts say employees should check their leave balance and understand their workplace rules before finalising holiday plans.

Doing so could help avoid unexpected leave disputes and costly travel bookings.

Should employers be allowed to direct staff to take annual leave during Christmas shutdowns? Let us know what you think.

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Jamie Hannah, deputy head of investments and capital markets at VanEck.

They discuss the risks and rewards offered with small caps and mid caps.

Episode timestamps

00:00 Introduction

01:17 What are small caps and mid caps?

03:33 Behavioural differences

05:07 The mid cap sweet spot

06:18 How have small and mid caps performed?

08:36 The investment case for smaller companies

11:21 How much should investors allocate to small and mid caps?

13:19 The key risks of investing in smaller companies

15:30 Options for gaining exposure to small and mid caps

16:31 Local and international ETF opportunities

19:25 Conclusion

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

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You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

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Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

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Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

Does any of this sound familiar? You're earning more than ever yet still wonder where the money goes.

For many Gen X Australians, their 40s and 50s are expensive years.

There may be a mortgage, children at school or university, adult kids hoping for help with a home deposit and ageing parents who need support. You may also be at the busiest point of your career.

Retirement suddenly feels much closer, but you still want time and money to enjoy life now.

Our 2026 Value of an Adviser research found Gen X was the least confident generation about achieving their long-term financial goals.

Only 15% said they were extremely confident, compared with 24% of Baby Boomers, 28% of Millennials and 43% of Gen Z.

Similarly, among Gen X Australians with a financial adviser, feeling less overwhelmed when planning for the future was the least strongly endorsed emotional benefit of advice, with 16% strongly agreeing, compared with 31% of advised Australians overall. Many are doing well on paper.

Almost 40% of Gen X respondents earn more than $200,000 a year, but the data shows us that a good income can still feel stretched when several generations are drawing on it at once.

As one adviser told us: "A lot of our clients are in that sandwich generation. They're trying to get themselves to retirement, helping kids into property and at the same time dealing with ageing parents. The conversation becomes: 'How do we look after everyone?'"

There may be no perfect answer, but there are ways to make the decisions easier.

1. Decide what matters most

For many Gen X households, peak earning years are also peak spending years. That makes prioritising essential.

Write down the big things competing for your money: mortgage, retirement, children, parents, savings and the things you want to enjoy yourself. Then put them in order.

This will help ensure you are covering your essential spending.

You may want to help your children and parents, but you also need to protect your own future.

Decide what you definitely want to fund, where you have flexibility and what could wait. Mapping out these priorities will outline your capacity to help both sides of the "sandwich" and what that looks like in tangible terms.

2. Sort out the family money conversations early

A lot of family financial stress comes from things nobody has quite talked about and the problems those unspoken assumptions can create within your family.

Parents may assume their children will help. Adult children may assume Mum and Dad will contribute to a home deposit. Siblings may assume someone else will step in.

Those assumptions can quickly become financial commitments that you have not budgeted for.

Ask your parents whether their wills and powers of attorney are up to date, where they keep important financial information and what they would want if they needed more care.

You should also talk to siblings about who could help with what and what role you can play.

Do the same with your children. If you plan to contribute to university costs, a wedding or a home deposit, decide what you can realistically afford and when. It is always better to be upfront than wait for a difficult conversation to arise.

These conversations are much harder in emotional times when illness, a care decision or a property deadline forces everyone to act quickly, so it helps to be prepared.

3. Get help joining the dots

Helping a child with a deposit may be affordable. So might cutting back work to help a parent.

The problem comes when several reasonable decisions land on the same financial plan in quick succession.

A financial adviser can model different scenarios and show how one choice affects the rest of your finances before you commit.

This modelling is one of the key ways an adviser can support your financial journey.

As one adviser put it: "Most of our clients are paying for peace of mind and clarity."

Good advice should help you understand the choices and trade-offs, so you can make decisions with your eyes open.

You may still be the person everyone turns to, but knowing what you can afford to give, what you need to protect and where your limits are can make that role easier to carry.

Rising seas levels could cost Australia $855 billion in damage to land and property by the end of this century, according to a new report from the Climate Council.

The climate advocacy group says as many as 267,000 coastal properties and two million hectares of land could be hit by flooding and erosion under the scenario, which it says is conservative.

Its Rising Seas, Rising Bills report notes sea levels have already risen and that Australians can expect them to rise at least another 14 centimetres by 2050.

With further increases likely beyond this, water levels could then be as much as 54 centimetres above where they are today by 2100.

Most properties deemed at risk are in Queensland, New South Wales and Western Australia.

The Gold Coast alone faces $84.4 billion in projected economic losses - the most of any urban area in the nation.

Report co-author Professor Tom Kompas from Melbourne University says many properties in the firing line would be homes.

"It's mostly residential. So in most cases, in Brisbane and the Gold Coast and so on, it's basically residential properties to a large extent," he says.

Professor Kompas says homeowners would see damage mostly in the form of coastal erosion, mould, landslides and localised flooding, as higher seas levels carry storm surges to into wider areas.

Residents already seeing impacts

The Climate Council says emissions from the burning of fossil fuels is heating the planet and driving the rise of sea levels, which it says have increased already.

Aileen Vening lives near the Victorian coastal town of Inverloch.

She prides herself on monitoring the local coastline closely and has seen significant erosion events hit local beaches regularly over the last 15 years.

"Everyone started noticing it from about 2012," she says. "From then on it may not be every year, but it's only one serious weather event away from a lot of erosion".

Vening says a 2024 storm washed away 18 metres of beach, while the local surf club has had to deploy sand bags to protect its facilities from erosion.

Yet coastal properties remain popular

Kym O'Connell is a real estate agent in Currumbin Valley near the Gold Coast - the city the Climate Council warns will suffer more damage than any other.

She is cautious about flooding in her region, but says rising seas levels are "low on the radar" of people moving into properties near beaches or waterways.

"Migration [to the Gold Coast] is massive and won't cease," she says. "Beachfront properties really haven't been damaged enough to steer people away... those downsizing go straight to the beach to live".

She believes the lifestyle and climate will keep people coming to the area, but is concerned about how they'll deal with the escalating costs borne out of a growing risk of floods.

"When your insurance premiums become just completely unaffordable, it does make you wonder where that will end".

Homeowners facing costs on their own

Property owners will have to pay for much of the damage caused by tidal inundation and storm surges out of their own pocket because these events aren't covered by most insurance policies.

"Actions of the sea are generally excluded or limited because coastal erosion and inundation are high and increasingly predictable risks that are difficult to insure sustainably," a spokesperson for the Insurance Council of Australia (ICA) told Money.

What can be done?

The ICA spokesperson adds: "What's needed is greater investment in coastal protection and adaptation, and better risk-informed land planning so development is kept out of high-risk locations".

The Climate Council agrees, saying Australians should stop building properties in at-risk areas, invest in coastal protection measures and even "manage a retreat" from properties in highly-exposed locations.

Professor Kompas, who worked on the economic modelling of the damage rising seas levels would do, admits these mitigation measures would also be "very expensive".

In the meantime, he says, people should be careful about buying property near the coast.

"Check where the land is situated. What's it's elevation? Are there any barriers that are going to protect you? Is there a possibility of a landslide behind you?"

Aileen Vening from near Inverloch, agrees: "Do your homework, pay attention and just realise that this is not a hypothetical, this is not going to get better."

1. Kogan CEO willing to work for free in bid for $50 million payday

The founder and CEO of online retailer Kogan is proposing to cut his own salary by almost $800,000, forego any bonuses and give any money he receives to charity in exchange for potentially earning millions in the future.

Announcing the proposal to the ASX this week, the company's chair said Ruslan Kogan's "unconventional" remuneration plan would drive his ambition, innovation and long-term thinking.

Under the proposal, Kogan's annual salary would be reduced from $847,838 to a legally required minimum wage of $50,000.

Kogan would then give this away to charity and forego any short-term incentive bonuses in a bid to make the company's share price reach $7.44 within five years, more than double what it is now.

If he achieves this, Kogan will receive 6,740,331 shares of his own, which would be worth over $50 million.

The proposal must first be approved by Kogan shareholders.

Australian Shareholders' Association CEO Rachel Waterhouse says the proposal is "highly unusual," but could please investors.

"It fits what shareholders are looking for, they are looking to really see that value is being created," she says.

"The biggest risk here is that there's only one measure of success... we'd also expect some non-financial metrics, so they could be things around customer or staff satisfaction".

2. Aussies warned to watch out for 'disaster chasers'

A major insurance company is warning homeowners to beware of dodgy tradies who could come knocking if their home is damaged this storm season.

Ahead of summer, IAG says Aussies should watch out for "disaster chasers" - scammers posing as tradespeople who promise cheap repairs to communities hit by storms, floods or bushfires.

Disaster chasers have been known to offer free property inspections, before deploying high-pressure sales tactics to get homeowners to pay upfront for repairs.

These repairs are often never completed.

IAG says one of its brands, NRMA Insurance, has recorded a 65% increase in disaster-chaser related claims since 2023 and says more than 1700 customers have been targeted in the last five years.

These scammers may claim to work for your insurer, but NRMA says it will never send a builder or tradesperson without arranging it with you first and will never ask for upfront payment on-the-spot.

3. Household names kicked off S&P 100

Nike and Colgate-Palmolive will lose their spots in the list of America's 100 largest and most established companies later this month, as consumer goods falter and tech companies surge.

S&P Global last week announced the companies, whose products have been a familiar sight in homes for decades, would be among four businesses removed from its S&P 100 index.

The companies are being taken off because their market capitalisation has fallen below other businesses, namely tech brands like Dell and Sandisk, who'll replace them on the index.

Nike's removal comes after its share price fell 80% from a peak five years ago.

CMC market analyst Henry Fisher says being dropped from the S&P 100 is an "embarrassing milestone" for the famous footwear brand.

"Nike has a real company problem, with revenue flatlining and net income halving since 2022," he says.

Fisher argues the company's push into direct-to-consumer sales led to it losing market share, but notes it's also been affected by issues hitting the broader fashion industry.

"Higher borrowing costs and cost-of-living pressures have squeezed households [and] discretionary spending," he says.

4. Fewer ways to pay rent and strata fees

Aussies paying rent or strata fees using the popular DEFT system will no longer be able to use credit or debit cards to cover these costs.

System operator Macquarie Bank has blamed the incoming card surcharge ban for the change, which will come into effect on October 1.

The bank says it's making the decision in order to focus on "fast, fee-free payment methods".

DEFT handles 1.2 million rental payments per month and is used by over 1200 real estate agencies and strata firms, according to realestate.com.au

Australia's Reserve Bank announced in March it would ban surcharges on debit and credit card payments on the EFTPOS, Mastercard and Visa networks from October.

The central bank said this would make payments simpler, but Macquarie is just the latest lender to use the rule change as an excuse for winding back services.

Major banks have already announced they will hike fees, make it harder to earn rewards points and cut perks on their credit cards because of the surcharge ban.

5. Apple releases most expensive iPhone ever

Once treated with wonder and amazement, smartphones to many of us now just feel like a tool needed to get through life.

But Apple is trying to revive the novelty of yesteryear with its new iPhone, the first to have a foldable screen.

The iPhone Duo will go on sale later this year and while its dexterity has grabbed headlines, the proposed price is also having an impact.

Anyone wanting to buy one of the devices in Australia will have to stump up at least $3499, more than for any other iPhone before.

Whether it will cause people to once again line up outside Apple stores remains to be seen.

Samsung has been selling smartphones that fold into different shapes in Australia for several years without any great fanfare, but maybe Apple's popularity locally will get people excited about the new design.

Everyone has a different idea of what a good investment looks like.

To some, it's pouring their life's savings into starting a small business. Others might purchase an investment property or auto-invest a portion of their monthly wage via a trading platform or app.

If you're anything like me, your idea of a great investment might be buying a run-down Ford Falcon at auction and hoping to flip it for a profit after a little elbow grease.

I'll be honest: I'm not a great investor. This may come as a surprise given I have several investments, but my knowledge on the topic is staggeringly limited and, if you're reading this, maybe you're in the same boat.

But I'm eager to get a better grasp on investing and challenge some of the limiting beliefs I have around personal finance.

So, to start tearing down my own walls, Money has kindly agreed to give me $100,000. Don't worry, I haven't been entrusted with actual moolah - it's virtual money in a demo account on the eToro investing platform.

Over the course of this series, I'll be sharing my journey of investing in exchange traded funds (ETFs) for the first time, plus some direct shares as well.

Obviously, I'd like to end up in the green, but more than that, I want to become a confident investor and understand what actually moves the market.

What investing experience do I have?

To be fair, I'm not a complete beginner, even though my feeble attempts to understand shares and ETFs over the years mostly exist in the form of dusty, unread books on a shelf.

These were classics handed down by my mum, who I suspect never read them either.

I'm talking popular titles like Rich Dad, Poor Dad and The Warren Buffett Way. If it's any consolation, I have actually read The Barefoot Investor... almost to the end.

Our late grandparents also left my brother and I around $3000 in IAG shares, which have seen about as much growth as my failed Ford Falcon drift car project investment.

Even my bricks and mortar investment wasn't a fantastic one. Granted, I wasn't expecting a two-bedroom unit in Western Sydney to increase in value exponentially.

How I invested my first $15,000

But let's move past this self-inflicted humiliation ritual and get started.

Modern investing apps and websites like eToro are surprisingly easy to navigate once you spend five minutes setting up an account.

Within 15 minutes, I'd already set up my first two buy orders following some helpful tips from eToro's lead analyst Josh Gilbert.

The first was about $5000 into State Street's SPDR S&P 500 (SPY), a broad option Gilbert says has a solid track record with steady growth.

Why I chose an ETF

I chose an ETF for the diversity it offers - instead of buying shares in just one company, an ETF combines multiple companies.

I landed on State Street's SPY because it comprises the best performers - Nvidia, Meta, Microsoft, Amazon, and Tesla - and smooths out the more dramatic ups and downs of direct shares.

Why I bought Apple shares

To compare the experience and performance of an ETF, I also bought direct shares, namely about $10,000 in tech giant Apple (AAPL), which is undergoing a period of significant change and has just released its first foldable smartphone.

As someone with minimal investment know-how and a chunky HECS debt, it's a decent start but there's plenty more to learn.

I'm sure I'll be spending plenty of time in the State Street ETF Education space and also the eToro Academy, which offer free resources to learn about financial markets, trading strategies and asset classes.

If all else fails, at the very least, I'd like to be able to hold a conversation with a finance guru without having to constantly ask what they're talking about. Stay tuned to see if I succeed or find a car to invest in instead!

Next in Diary of an ETF Beginner: My first investments are in. On September 25, I'll reveal how my ETF and Apple shares performed, what surprised me most, and the lessons I've learned after my first few weeks in the market.

Could the next financial crisis already be sitting inside your superannuation account?

It sounds alarmist, but regulators are increasingly asking the question as Australia's private credit market has grown to around $250 billion.

What was once a niche corner of finance has become one of the country's fastest-growing sources of funding.

Most Australians have probably never heard of private credit. Yet many could already have exposure through their superannuation. ASIC has repeatedly highlighted the growing connection between private credit and the super sector, warning investors to better understand the risks involved.

The recent collapse of Bathla Group, which entered administration owing approximately $3.4 billion to creditors, has thrust those risks into the spotlight, but Bathla is not the real story.

The real issue is that many of the conditions that could place pressure on private credit are already emerging.

Interest rates remain elevated, inflation has proven more persistent than many expected, construction costs remain significantly higher than before the pandemic and parts of the property market are beginning to soften.

At the same time, developers who borrowed heavily during years of ultra-low interest rates are being forced to refinance at much higher borrowing costs.

That matters because more than half of Australia's private credit lending is tied to property development and construction.

In a rising property market, those risks can remain hidden. However, when borrowing costs stay high, property values soften and developers struggle to access fresh funding, pressure begins to build across the entire system, and that is where the risk to superannuation begins.

Australia's $250 billion private credit market has never been tested by a severe downturn at anything close to its current size. If several major developers fail within a short period, fund managers may be forced to write down the value of their loans.

Those write-downs could then trigger redemption requests from investors seeking to reduce their exposure.

The problem is that many private credit assets cannot be sold quickly or easily. What appears liquid in good times can become extremely illiquid in bad times.

When investors want their money back, someone has to buy the underlying assets. If there are few buyers, prices can fall rapidly, forcing further write-downs and creating a self-feeding cycle.

Sound familiar?

The Global Financial Crisis in 2008 was not simply about falling property prices. It became a crisis when investors realised much of the property-linked debt they owned was worth far less than expected and there were very few buyers when everyone wanted to sell.

Today, ASIC is warning of the sector's "first significant cracks", while the Reserve Bank has raised concerns about transparency, leverage and visibility of risk within private credit markets.

So, the big question is: are the same ingredients that fuelled the GFC beginning to emerge again?

Higher interest rates, refinancing stress, weakening property markets and growing private debt are already putting pressure on borrowers. If those trends continue, the real risk is that Bathla won't be remembered as an isolated collapse, but as the first domino to fall.

Best and worst sectors

Energy was the best-performing sector this week, rising more than 3% as escalating Middle East conflict pushed Brent crude above US$100 a barrel.

Supply disruptions supported oil prices, providing a tailwind for Australian oil producers.

Utilities gained 0.27% as investors sought more defensive businesses while the broader market sold off.

Materials rounded out the top three, down 0.29%, as the broader sell-off caught major miners amid inflation and interest rate concerns. However, record copper prices supported miners earlier in the week, helping cushion the sector's decline.

At the other end of the market, Information Technology was the weakest sector, falling more than 6% as rising oil prices fuelled inflation and interest rate fears, weighing on sector heavyweights such as Xero and WiseTech.

Consumer Discretionary was the second-worst sector, dropping more than 4% as higher fuel costs and interest rate fears threatened household spending.

Consumer sentiment also dropped 5.2%, adding to concerns that Australians would cut back on non-essential purchases.

Consumer Staples rounded out the worst performers this week, falling more than 3% as it was caught in the broader sell-off, with oil-driven inflation and interest rate fears weighing on shares.

Best and worst stocks

Whitehaven Coal led the ASX Top 100 this week, climbing more than 5% as Middle East energy disruptions supported the outlook for coal demand.

The IEA now forecasts record global coal consumption in 2026, reinforcing that backdrop.

Downer EDI followed, rising 3.92% as ongoing share buybacks may have helped support its rise this week, with the company reporting further purchases of its own shares.

Santos rounded out the leading performers, gaining 3.9% as escalating Middle East tensions pushed oil prices higher and supported its earnings outlook.

At the other end, Xero was the weakest performer, falling more than 13% as oil-driven inflation and interest rate fears weighed on technology stocks.

Higher rates reduce the value investors place on future earnings, pressuring growth companies such as Xero.

Westgold Resources followed, falling more than 10% despite a strong week for gold stocks.

Having outpaced the gold price in recent weeks, its pullback could reflect short-term profit-taking rather than a more serious change in trend.

WiseTech Global rounded out the worst performers, falling 9.87% and getting caught in this week's retreat from growth stocks as rising oil prices reignited fears of further rate hikes.

All Ordinaries Index update

The All Ordinaries Index sold off again this week, falling more than 2% by Thursday's close as escalating conflict in the Middle East and rising oil prices weighed on sentiment.

The index is now sitting near the critical 9000 level, making this a genuine make-or-break point for the market.

The significance of 9000 goes beyond it being a major psychological support level. It also aligns with the longer-term uptrend established from the March 2026 low, which the market has respected ever since.

If buyers step in and drive a strong rebound, this decline may ultimately prove to be another healthy correction within the broader uptrend.

However, a decisive break below both 9000 and the uptrend would send a far more concerning signal.

Unsurprisingly, Information Technology led the market lower, falling more than 6%.

Technology is one of the market's more risk-sensitive sectors, making it particularly vulnerable when oil prices rise, uncertainty increases and investors become less willing to hold higher-growth stocks.

Next week should provide greater clarity.

The market will either find support and rebound or break lower, with the outcome potentially determined by events unfolding thousands of kilometres away. For Australian investors, 9000 is now the level that matters most.

In a matter of weeks, the Australian credit card landscape has undergone what is arguably its biggest shake-up in years.

Card providers, including all four major banks, have made significant changes to their credit card offerings - largely in the rewards space.

The reason? Some banks have pointed to the upcoming card surcharge ban, which will see both debit card and credit card surcharging outlawed from October 1.

Why some rewards cards no longer stack up

While providers haven't taken a uniform approach with their changes, Richard Whitten, money expert at Finder, suggests that there's been a substantial downgrade across rewards cards.

"Generally speaking, you're looking at higher annual fees, higher interest rates, lower earn rates and a winding back of complimentary insurances.

"In some cases, the value of redeeming rewards points has also been lowered.

"So far, one-off bonus point offers for new customers are still relatively high, but we may start to see those change too."

Given the extent of the changes, it's only natural that many people will be left wondering if their rewards card is still going to deliver enough value to justify its cost.

Here's how to work out if your current card still makes sense or whether an alternative option is worth considering.

Option 1: Keep a rewards credit card

While the changes that have already been announced are significant, Whitten says that it doesn't necessary mean that rewards cards are no longer valuable.

"You may find that your current card is getting a downgrade, but it may still be worth holding on to."

Cardholders may want to be proactive though. To start, Whitten suggests taking the time to review your current card to assess whether the benefits outweigh the costs.

That may involve looking at the points earn rate, bonus points and any additional perks (like travel insurance) attached to the card, then weighing those up against the annual fee and other potential costs like the purchase rate.

Whitten also recommends heading to the online shop linked to the rewards or frequent flyer loyalty program you're in order to ensure that the points themselves are worth the effort.

"Obviously different things have different values, but you'll want to work out how many points a flight upgrade or a $100 gift card will cost you.

"From there you'll need to think about how many points you are going to be able to earn with the card in a year and how the real value of those points compares to the annual fee.

"If the value you can get from your points is more or similar to the annual fee, then it might be worth it - especially when you factor in other benefits like airport longue passes or travel insurance."

Ultimately, if the numbers don't stack up, then it may be time to consider another reward card, or a different type of credit card altogether.

Option 2: Switch to a no annual fee credit card

Recent research conducted by Finder on the upcoming card surcharge ban found that one in three Australians would cancel their credit card if their provider increased their annual fee.

The good news for cardholders who aren't keen on the idea of higher annual fees - or annual fees at all - is that there are a number of fee-free options on the market.

While these cards don't typically come with rewards or premium perks, they may be a good fit for those who like the convenience of a credit card without the ongoing cost.

"A no annual fee card is the cheapest possible option for someone who pays their balance off each statement period," Whitten says.

"So, if you're just using your card to cover everyday expenses and you manage it properly, there's no difference to a debit card in terms of cost, but a credit card obviously has that extra flexibility."

Option 3: Choose a low rate credit card

Another option is to prioritise finding a card with a comparatively low purchase rate.

"A low rate card may be useful for someone who doesn't always pay off their balance from statement to statement - who might carry a balance and pay some interest," Whitten explains.

"These cards tend to have interest rates around 8% p.a. to 13% p.a., but that's much better than the more expensive cards which can be as high as 24% p.a."

Whitten says that while most of these cards do tend to have annual fees under the $100 mark, there are also a handful of options that feature both a low rate and zero annual fee.

Option 4: Choose a balance transfer credit card

For cardholders wanting to banish any card debt they're carrying for good, a credit card with a balance transfer offer may be another option worth considering.

A balance transfer allows debt to be shifted from an existing card (usually one with a high interest rate) to a new card offering a low or zero-interest offer for a set period (generally six to 24 months).

In theory, these offers can be useful in helping cardholders pay off their debt sooner without accruing additional interest.

However, they aren't risk-free. Some providers charge an upfront fee to facilitate the transfer, and once the offer period ends the interest rate will typically jump much higher.

The promotional rate also usually only applies to the transferred debt, not new purchases.

That's why it's often recommended to treat a balance transfer card as a debt repayment tool rather than as a card for everyday spending.

Before switching, consider the features that will benefit you the most.

You've come across an investment fund online with impressive historic returns. Or perhaps it's a financial advisor on social media whose content resonates with you.

In a world where investment scams, cloned websites and online impersonators are common, it pays to proceed with caution - to be able to separate legitimate financial providers from fraudsters.

The question is, where can you start? One piece of information can help.

It's not the rate of return on an investment or someone's Instagram follower count - it's an Australian Financial Services Licence (AFSL).

What is an AFSL?

Issued by the Australian Securities and Investments Commission (ASIC), an ASFL is a mandatory requirement for individuals or businesses wanting to conduct financial services in Australia.

That includes everything from providing financial advice to managing investments and offering services related to superannuation.

Before granting a licence, ASIC will assess whether a business has the financial resources and competency needed to provide services in a particular area.

However, it's important to note that it's not a seal of approval from the regulator, nor is it a guarantee of the quality of the advice or products being offered.

The rules financial providers must follow

Obtaining an AFSL isn't a one-off exercise. Once licensed, businesses have a number of ongoing responsibilities that differ based on the specific services or products they offer.

The list of obligations is extensive, but it includes maintaining risk management systems, holding appropriate insurances, being in good financial standing and ensuring that staff and representatives are adequately trained and monitored.

Most licensees also need to become members of the Australian Financial Complaints Authority (the ombudsman that deals with consumer and small business complaints), in addition to having any required internal dispute resolution systems in place.

Ultimately, ASIC says that ASF licence holders have a general obligation to provide efficient, honest and fair financial services.

How to check if your provider has an AFSL

Fortunately, ASIC's Professional Registers Search makes it easy to find out whether or not a business holds an AFSL, as well as the kind of services they are licenced to provide.

To conduct a search, you'll need the name of the business, licence number, registration number, Australian Company Number (CAN) or their Australian Business Number (ABN).

You can even search the register by AFSL number in order to confirm that the AFSL that a business is advertising is still active or actually linked to them.

ASIC has also recently started publishing website addresses of AFSL holders in the register in order to help Australians differentiate between genuine and imposter websites.

How an AFSL check can help you avoid scams

At the end of the day, consumers may still be unhappy with a service or product they are provided by a business holding an AFSL. A licence alone isn't a guarantee of quality in that respect.

Nor does the presence of an AFSL eliminate risk. For instance, some of the advice businesses that allegedly encouraged clients to invest into the First Guardian and Shield funds held licences.

What using ASIC's register to confirm that a business has a legitimate AFSL can do is help Australians identify potential scams or impersonations before it's too late.

Thirty-five per cent of Australians are aiming to retire with over $1.25 million in superannuation, according to new data from MLC.

But experts are urging Aussies to think about whether they really need to save this much, as most will get financial help from the government in retirement and won't have to rely solely on their super.

MLC admits the $1.25 million target is "highly ambitious" and would translate into an income of $83,000 per year in retirement.

The super fund says that's enough for a "champagne" lifestyle with lots of travel overseas and in Australia.

"They are quite aspirational targets," notes Jenneke Mills, head of technical services at MLC.

"They are quite a bit higher than what ASFA (Association of Superannuation Funds of Australia) has suggested in the past".

Not all of the 2500 people who responded to MLC's survey had set targets as high as those of their peers.

Thirty-one per cent said they would be happy with a super balance between $751,000 and $1.25 million.

Meanwhile, 34% were confident a nest egg of less than $750,000 would be enough for their retirement.

Do you actually need $1.25 million in super?

Super industry groups like ASFA and consumer advocate Super Consumers Australia (SCA) say Australians shouldn't feel pressured to try and build a super balance of over one million dollars.

"You don't need anything like those levels in order to live a happy, comfortable retirement," says SCA CEO Xavier O'Halloran.

Both SCA and ASFA say a super balance of only a few hundred thousand dollars is enough for a single person to enjoy an at least modest, if not comfortable, retirement.

Mills says Australians do tend to overestimate how much super they'll need and says this might be because many don't realise they'll also be able to draw on the age pension once they retire.

"Some Australians who don't necessarily understand that interaction can be planning for retirement by just looking at superannuation, without really understanding what other benefits they could become entitled to," she says.

Around 62% of Australians over the age of 65 receive a part or full age pension from the federal government, according to AustralianSuper.

For those living modestly with a relatively small nest egg, SCA analysis shows the age pension can pay for as much as 91% of retirement spending.

"It's actually a pay rise for a lot of people in retirement, compared to their working lives," O'Halloran says of the age pension.

"Retirement can actually cost a lot less than working life," adds James Koval, chief policy and advocacy officer at ASFA.

"[For example], when people are in retirement and accessing their super, they're not paying tax on that super pension income... tax is a cost that actually disappears".

In addition to a lower tax burden, retirees also enjoy discounts on a broad range of daily expenses, such as energy, medicine and transport.

So how much super do you actually need?

Mills says it's useful to think about how much you'll spend regularly in retirement and let that estimate dictate what size nest egg to aim for.

"We want people to understand what that lump sum translates to in terms of an income," she explains.

"Otherwise people... might be foregoing as much flexibility in retirement as they'd like and working longer when they don't necessarily need to".

ASFA updates its advice on how much you need for a "comfortable" or "modest" retirement every quarter.

To help consumers see where they might fit, it also gives an indication of how much you'd likely be spending per year living each way, while drawing on your super and a full or part age pension.

Put your age, income, current super balance and other details into Moneysmart's superannuation calculator to see how much you'll have saved by the time you retire.

See how your current balance compares by checking how much other people your age have in super.

Renting changes the game

But these recommended targets assume you'll own your home outright by the time you finish working.

ASFA and SCA warn you'll need significantly more super if you'll be renting or juggling housing costs in retirement.

In fact, ASFA says someone living up to its modest lifestyle benchmark while renting privately would need $340,000 in super - more than double what would be required for the same quality of life if they'd owned their own home outright.

When Qantas shareholders gathered in Melbourne in early November 2023 for the airline's annual general meeting (AGM), it was clear that it wasn't going to be a run-of-the-mill event.

After months of negative headlines surrounding flight delays, COVID credits and the multi-million dollar payout received by former chief executive Alan Joyce, shareholders were clearly fed up.

In a major backlash, nearly 83% of shareholder votes were cast against the company's remuneration report outlining how much the top executives and directors were paid.

The airline ultimately avoided a second strike in 2024, which could have resulted in a board spill, after major changes to its leadership team and a cut to the exit payout received by Joyce.

While the Qantas case is among the more high-profile examples because of the backlash it received, it's just one of the thousands of resolutions put to shareholders of Australian companies at AGMs each year.

From executive pay and board appointments to climate-related proposals, these votes can have significant consequences for companies and investors alike.

Boards and investors are only part of the story, though. Behind the scenes, proxy advisers and shareholder advocacy groups are also busy shaping the direction of Australia's largest businesses.

Welcome to proxy season.

What is proxy season and when does it happen?

In Australia, AGMs for listed companies tend to cluster in October and November.

This period, as well as the months leading up to it, is often referred to as proxy season.

Under the Corporations Act, public companies are legally required to hold an AGM within five months of the end of the financial year, which for many firms is June 30.

Increasingly, companies give shareholders the opportunity to participate in AGMs by attending in person or joining online.

But for those who can't, or don't want to, attend an AGM and vote on resolutions themselves, there's an alternative: proxy voting.

"A proxy allows a shareholder to appoint another person or organisation to attend and vote at a company meeting on their behalf," Rachel Waterhouse, chief executive of the Australian Shareholders Association (ASA), explains.

"The shareholder remains the owner of the shares and can either direct how the proxy must vote on each resolution or leave the vote open for the proxy to decide."

Proxy votes can be used by regular shareholders, but also by large institutional investors, such as superannuation funds and fund managers, with extensive holdings across companies.

Because of the scale of their holdings and the number of resolutions they have the chance to vote on, institutional shareholders often rely on third parties known as proxy advisers to research resolutions, evaluate issues and provide recommendations on how to vote.

What do shareholders vote on at AGMs?

AGMs provide shareholders with one of the main opportunities to have a say on resolutions put forward by companies, as well as proposals successfully placed on the agenda by shareholders themselves.

Common issues that come up for voting range from director elections to mergers, capital raisings and changes to a company's constitution.

But the topic that typically attracts the most attention, and often the most controversy, is executive remuneration.

This is partly because executive pay, bonuses and share options tend to be a relatable and attractive target for criticism among disgruntled shareholders.

But as Paul Murphy, head of governance advisory APAC at Georgeson, explains, it's also because of Australia's 'two strikes' mechanism.

"If a company gets more than 25% of the vote against the disclosure of how they do their executive remuneration, that's called a strike.

"If that happens at two AGMs in a row, a second strike, then the entire board could be spilled and have to go for re-election.

"It's become a bit of a generic protest vote for investors to push back on things that they don't like about companies."

While a first strike has no immediate consequences, even the prospect of a second strike is often enough to get a board's attention and precipitate change, as was the case following the Qantas AGM in 2023.

"You'll find that most companies are very keen to avoid getting a strike, or getting a second one if they've already had the first, because they attract a lot of media attention, so it's really a reputation management thing for them," Murphy says.

Another prominent voting issue for shareholders is the re-election of existing directors or election of new nominees.

Murphy notes that it's typical for board-nominated directors to receive about 95% approval, so anything significantly below that level can indicate shareholder dissent.

"It's a bit of a signal if a company is putting four directors up and three of them get 95% support and one gets, say, 75%, that there is something going on there.

"We'll typically attribute that kind of outcome to shareholders, especially institutional shareholders, holding an individual director accountable for something they're not happy with.

"That might be the diversity profile of the company, not having enough gender diversity on the board.

"Or it might be because they're the chair of, say, the remuneration committee, and investors are not happy with the remuneration structure."

How shareholder activists influence company decisions

Executive pay and board elections may attract the most attention during proxy season, but they're not the only issues that come before shareholders.

In some cases, investors themselves attempt to shape the agenda with their own resolutions.

"More broadly, shareholder proposals are something that we've seen a little bit of over the years in Australia," says Murphy.

"Often they've been put up by environmental activists or NGOs, most commonly around climate disclosure issues."

Pressure on companies to address issues such as climate change, environmental risk and other social concerns has come from both retail and institutional investors.

But much of the coordination and campaigning has been led by shareholder advocacy and activist groups.

One of the organisations at the forefront of efforts to push issues like these into the spotlight is the Australasian Centre for Corporate Responsibility (ACCR), which does everything from conducting research and analysis to filing shareholder resolutions.

But as ACCR co-chief executive Brynn O'Brien explains, shareholder activism isn't limited to focusing on high-profile AGM votes.

A significant part of the work involves engaging directly with companies throughout the year.

"ACCR has been a shareholder in some major Australian listed companies for over a decade: BHP, Rio Tinto, Woodside and AGL, to name a few.

"We meet fairly regularly with these companies, speaking to thematic experts, executives and board members. We share our views, we hear theirs.

"This is called engagement. Sometimes this influences how they're operating or making decisions, sometimes it doesn't. Many institutional shareholders engage in this way."

One notable example of shareholder influence that O'Brien points to is pressure that ACCR, along with a group of local and international institutional investors, applied to companies regarding their memberships of industry associations.

"Many people will remember the political instability of the 2010s when climate policy was repeatedly derailed and successive prime ministers lost their positions amid intense lobbying by fossil fuel interests.

"Some of the most influential industry groups, including the Minerals Council of Australia, were funded by companies such as BHP and Rio Tinto, even as those same companies were presenting themselves to investors as climate leaders.

"We were able to draw attention to that disconnect.

"Shareholder pressure drove companies to apply much greater scrutiny to the positions taken by those industry groups and, in some cases, to impose consequences when those positions diverged from the companies' own stated commitments."

What do proxy advisers do?

At the heart of proxy season is another set of influential players: proxy advisers.

Global firms like ISS STOXX, the parent company behind Money magazine, and Glass Lewis, as well as Australian firms such as Ownership Matters, all provide these services.

"Fundamentally, proxy advisers serve institutional investors by doing the background research to support voting recommendations at company meetings, not just AGMs, but also things like merger transactions where there's going to be a shareholder vote," Murphy explains.

This doesn't mean institutional investors such as super funds and fund managers are handing over their voting decisions.

Rather, they're outsourcing the research that informs those decisions.

"If you were to ask the really big investors, they would say that they're using the proxy advice as a research input," Murphy says.

"It's not efficient for all of them to duplicate that research.

"There's just a lot of underlying data. So, it makes sense to neutralise that factual research element and have a proxy adviser do it, rather than each investor having to duplicate that effort themselves."

So how do proxy advisers arrive at the recommendations they make?

According to Murphy, each adviser has clear guidelines that set out how issues should be assessed.

"There would be statements of principle about how they define when a director is independent, or around director capacity and overboarding risk, or around the practices companies should follow in their remuneration disclosure.

"These kinds of issues tend to be codified into policies, which then drive the way proxy advisers issue research recommendations."

Proxy advisers have courted controversy in recent years, particularly in the United States, with critics suggesting they wield too much influence over how investors vote.

But Murphy says it's important to remember that proxy advisers don't operate in a vacuum because the frameworks they use are developed alongside their clients.

"The policies they operate under are developed in consultation with their subscribers, the institutional investors.

"So you wouldn't be surprised to see a fair bit of coincidence between proxy adviser recommendations and voting decisions.

"I think that's a bit different from saying that proxy advisers are unaccountable people who sit on the side and determine the way institutions are going to vote."

Why proxy season matters for everyday investors

Proxy season and the AGMs that dominate the calendar in October and November provide investors, even those with relatively small shareholdings, with an opportunity to engage with the companies they own.

"It's not just about voting, but turning up and listening to the people that are leading your company and making sure that you're comfortable, as an investor, with the strategy and the way ahead," Waterhouse says.

"It's not to everyone's interest, but we are very passionate about this because we think retail investors should care and should vote."

What many shareholders may not appreciate is that, in addition to voting, they have a number of rights they can choose to exercise during AGM season.

"Some rights can be used individually, like voting, nominating directors or asking questions. Some are collective rights, like filing shareholder resolutions and members' statements," explains O'Brien.

"These rights and the expression of shareholder voice that goes along with their use contribute to a healthy corporate governance environment and a well-functioning market.

"If companies or governments try to erode these rights, AGM season is often where that becomes most visible."

As the Qantas case demonstrated, when there's enough shareholder engagement and passion directed towards a particular issue, it can force a company to listen and act.

While direct shareholders may be the only people able to vote on resolutions, they're by no means the only ones impacted by decisions made at AGMs and other shareholder meetings.

Australians with money invested through exchange traded funds or superannuation often have a stake in the same companies, meaning the outcomes can also affect their portfolios and returns.

How to vote and participate in AGMs

The reality is that many Australians who own direct shares simply aren't engaged or interested in the companies they're invested in, beyond the returns they provide.

According to Waterhouse, the proportion of people who take part in AGMs or vote on resolutions is very low.

"You can probably understand that. AGMs are quite long and they're often held on weekdays.

"I went to the Woolworths AGM last year and it went for five hours, so anyone working that day wouldn't have been able to attend."

As the 2026 proxy and AGM season draws closer, Waterhouse has some recommendations for everyday shareholders interested in learning more about the companies they own and engaging more actively with them.

As a first step, she suggests reading company communications.

Annual reports, which provide shareholders with a snapshot of how a company has performed and where it's headed, are typically released during the August reporting season.

It's also worth keeping an eye out for AGM notices that contain information about the timing, location and agenda.

When it comes to the AGM itself, attending in person can be beneficial, but companies are increasingly offering online participation options.

Finally, Waterhouse strongly urges shareholders to consider voting on company resolutions, whether at an AGM or at meetings throughout the year.

Shareholders can also appoint a proxy to vote on their behalf.

That could be an individual they provide directions to, or an organisation such as the ASA, which researches companies and publicly discloses how it intends to vote ahead of time.

"We have a group of somewhere between 100 and 120 volunteers who read annual reports, meet with company chairs and then turn up at the AGM and ask questions," Waterhouse says.

"We also put together a voting intentions report that we make public, whether you're an ASA member or not. This way you can see the way we want to vote.

"So, if you choose to give your proxy to us, your vote will reflect how we see a company, and that's led by the members and investors reviewing it."

Whether it's actively participating in an AGM or simply skimming through the latest annual report, Waterhouse believes becoming more engaged will ultimately benefit many investors.

"By finding a little bit of time to engage with the companies you own, you will only become a better investor.

"And if you're not comfortable with where the company is heading, then you can always move away from it."

For decades, family trusts have been a favourite structure for Australian investors, business owners and wealthier families.

There are good reasons for that. A discretionary trust can provide asset protection, assist with succession planning and, crucially, give the trustee flexibility over which family members receive income from year to year.

But the Federal Government's proposed new 30% minimum tax on discretionary trusts threatens to significantly reduce one of their biggest attractions: the ability to distribute income to family members on lower tax rates.

So, are family trusts still worth it?

In many cases, I think the answer will still be yes. But the calculation is becoming much more complicated - and a major change contained in draft legislation released in September means trust owners shouldn't rush into restructuring just yet.

What's changing for family trusts?

Under reforms announced in the 2026 Federal Budget, a 30% minimum tax is proposed to apply to income earned through discretionary trusts from July 1, 2028.

The Government's target is income splitting.

At present, the trustee of a typical family discretionary trust can decide which beneficiaries receive the trust's income each year.

Consider a family where one spouse earns $200,000 and the other earns $30,000.

If the family has investment or business income sitting in a discretionary trust, the trustee may currently be able to distribute more of that income to the lower-income spouse.

Similarly, distributions might be made to adult children at university or in the early stages of their careers, when their marginal tax rates are relatively low.

That flexibility can produce significant tax savings.

It is precisely what the Government is trying to curtail.

The proposed rules effectively create a 30% floor on the tax applying to affected trust income, although the mechanics are considerably more complicated than simply taxing every trust distribution at 30%.

Importantly, this is still draft legislation. The final rules may change before they become law.

A major new option for family trusts

The most interesting development came on September 3, when the Government released the first tranche of exposure draft legislation.

It contains an option that wasn't in the original Budget announcement and could make a big difference to thousands of existing family trusts.

Rather than paying the minimum tax or restructuring, an existing discretionary trust could potentially elect to become what the draft legislation calls an "excluded election trust".

In effect, the family gets to keep its existing trust but agrees in advance who will receive the trust's income and capital, and in what proportions.

Those proportions have to add up to 100%, and the nominated beneficiaries' proportions of income and capital must be the same.

Most importantly, the arrangement isn't intended to be something families rewrite each year according to who has the lowest tax rate.

The distribution policy is effectively set in stone.

In return, the trust can remain outside the proposed minimum-tax regime.

That's potentially a very valuable concession. But families need to understand what they're giving up to get it.

The price is flexibility

Imagine parents with three adult children.

Today, their family trust might distribute income differently every year according to the circumstances of each child.

One child might be studying and earning very little. Another might be earning $150,000. The third might be overseas.

Five years later, their circumstances could be completely different.

That's exactly where a discretionary trust comes into its own.

Under the proposed election, the family might instead decide that Mum receives 20%, Dad receives 20% and each of their three children receives 20%.

That could allow the trust to avoid the minimum-tax regime.

But those proportions would effectively be locked in indefinitely.

This creates a question that is bigger than tax: how confident are you that today's family circumstances will still make sense in 10, 20 or 30 years?

Families change. Children marry and divorce. Relationships break down. People become bankrupt. Beneficiaries move overseas. A child expected to take over the family business might choose an entirely different career.

The tax saving from fixing distributions could look attractive in 2028 but prove restrictive decades later.

Should you just accept the 30% tax?

Possibly.

That's one of the things I think will surprise some trust owners.

Paying the minimum tax won't necessarily make a family trust pointless.

If trust income is already being distributed predominantly to beneficiaries paying tax at 30% or more, the difference may be much smaller than expected.

For families that don't use their trust aggressively for income splitting, retaining complete discretion and accepting the new tax treatment might actually be the most sensible option.

By contrast, families that routinely distribute significant amounts to adult beneficiaries on low marginal tax rates are likely to feel the reforms much more sharply.

Every trust will need to be modelled individually.

What about moving everything into a company?

This will inevitably be suggested as the simple solution, but I'd be wary of assuming a company is automatically better.

Companies can be very effective structures, particularly for businesses that retain profits to fund future growth.

But companies have disadvantages too.

Companies don't receive the general 50% CGT discount available to individuals and trusts. And while company tax may initially be paid at 25% or 30%, getting those profits into the hands of shareholders can produce additional personal tax through the dividend system.

A trust can also provide asset-protection and succession-planning advantages that a company may not replicate in quite the same way.

In other words, comparing "30% trust tax" with "25% company tax" and choosing the lower number is not sensible tax planning.

You have to consider what happens to the money eventually, not simply the tax rate paid by the entity in year one.

The Government is offering a way out

Trust owners who decide the new regime no longer works for them may also get an opportunity to restructure.

The draft legislation provides expanded CGT rollover relief for three years from 1 July 2027.

That could allow some families to move assets out of a discretionary trust and into another structure without triggering the immediate federal tax bill that might otherwise make restructuring prohibitively expensive.

But CGT isn't the only consideration.

State stamp duty could still be an issue, as could finance arrangements, licences, contracts and other regulatory requirements for businesses.

That's particularly important where the trust owns property.

The Federal Government says the new fixed-distribution election itself won't require a restructure and isn't expected to trigger state and territory stamp duty.

However, questions have already been raised about how state revenue authorities will treat changes to beneficiaries' economic entitlements, and some states have not ruled out duty consequences.

So I wouldn't recommend making an irrevocable decision affecting a valuable trust until the state tax position is much clearer.

Not every trust will be caught

Another misconception worth clearing up is that every trust in Australia is suddenly going to pay at least 30% tax.

That's not what is proposed.

The Government has confirmed exclusions for a range of structures and circumstances, including charitable trusts, special disability trusts, superannuation funds, deceased estates and genuine discretionary testamentary trusts.

Primary production income is also intended to be excluded.

The exposure draft also introduces a new definition of a fixed trust so that various commercial trusts without material discretionary elements aren't inadvertently dragged into the regime.

This makes it important to establish exactly what type of trust you have before contemplating major changes.

Three choices are emerging

For many families with an existing discretionary trust, I think the decision will eventually boil down to three broad choices.

Keep the discretion and accept the tax

This preserves the flexibility to change distributions as family circumstances change, but affected income faces the new minimum-tax regime.

Keep the trust but fix the distributions

The proposed election could keep an eligible existing trust outside the minimum tax, but the beneficiaries and their respective shares would effectively be locked in.

Restructure

The three-year rollover window could provide an opportunity to move into another structure, but CGT rollover relief doesn't necessarily eliminate stamp duty, legal costs or other commercial consequences.

There won't be one answer that's right for everybody.

So, are trusts still worth it?

Yes - for many Australians they will be.

What is changing is the assumption that a discretionary trust is automatically the best structure for anybody building significant wealth.

The tax advantages of trusts have always attracted attention, but tax isn't their only purpose.

A well-structured trust can protect assets, facilitate the transfer of wealth between generations and allow a family to adapt as its circumstances change.

Those benefits still have value.

The question from 2028 will be how much you're prepared to pay for them.

For some families, accepting a 30% minimum tax in return for retaining complete discretion could be worthwhile. Others may be comfortable nominating beneficiaries and locking in their entitlements. And some will conclude that the trust has served its purpose and use the proposed rollover relief to restructure.

The most important thing right now is not to panic.

The legislation remains in draft form, consultation is continuing and further legislation covering administration and integrity measures is still to come.

But I wouldn't ignore the changes either.

Anyone with significant investments or a business inside a discretionary trust should use the period between now and 2028 to understand why the trust exists, who actually benefits from it and how important its flexibility really is.

The family trust isn't dead.

But the days when "set up a family trust" was almost a default piece of tax planning advice may well be coming to an end.

Australians are an entrepreneurial bunch.

More than 2.7 million businesses are in operation around the country and of these a whopping 97%, that's 2.6 million enterprises, are small, classified as having fewer than 20 employees.

It makes small businesses the beating heart of our economy. They are found in every postcode and every sector, from farms and factories to cafes, clinics and consultancies.

They are especially prevalent in industries such as construction, professional services, real estate and transport.

But small businesses are now under growing pressure from regulatory changes, including recent capital gains tax (CGT) reforms and the introduction of Payday Super.

Why small businesses matter more than you think

More broadly, small businesses are highly active across franchising, a sector that covers about 73,000 small businesses.

According to the Franchise Council of Australia, these enterprises are, for the most part, made up of small family units. Yet they play a valuable role helping many young Australians find a pathway to their first job.

The upshot is that while big business may attract the limelight, it is small business that does a lot of the heavy lifting for Australia, contributing $590 billion to the economy annually, and employing about 5.4 million people, close to 42% of the private sector workforce.

In regional areas, small businesses tend to play an especially valuable role, often providing products, services and employment in areas where low populations make it less attractive for big businesses to set up shop.

But the contribution goes way beyond economics. These businesses typically provide considerable support for local communities, often sponsoring sporting teams, local schools and volunteering at community events.

Why small business owners are under pressure

Despite the upsides, the small business sector is facing serious challenges across a number of fronts.

Where have all the young business owners gone?

Take a closer look at who's running the small businesses in your area, and chances are you'll notice a common thread: few, if any, owners are in their 20s or 30s.

The Council of Small Business Organisations Australia (COSBOA) says more than two-thirds of small business owners in Australia are between 45 and 64 years of age.

Half are 55-plus, with many remaining active in their business well beyond traditional retirement age. Very few business owners are younger than 25.

This, of course, reflects the experience needed to start and sustain a business. And older workers are also more likely to be able to access the capital and credit needed to start or buy a business.

But that doesn't tell the full story.

Why young Australians are choosing secure jobs over starting a business

Research commissioned by Future of Work expert Dr Jo Winchester shows that cost-of-living pressures are seeing one in two young Australians choose career paths they believe are financially safer, such as pay-as-you-go jobs, over roles they feel genuinely passionate about.

Winchester says, "Young Australians are growing up in a world where stability feels harder to achieve than ever before, so it makes sense that many are approaching career decisions cautiously."

Winchester's findings match those of the Centre for Independent Studies (CIS). It found Millennials (Gen Y, aged 30-45) see high financial risks as the main barrier to starting a business and are more likely to prioritise job security, especially when faced with high student debts.

The upshot is dsecreased entrepreneurial activity.

Australia's start-up pipeline is drying up

Melinda Cilento, CEO of the Committee for Economic Development of Australia (CEDA), says more than one in 10 (13%) working-age Australians wants to work for themselves or start a business.

But that ambition is not translating into a pipeline of new businesses that can grow, hire and contribute to the economy.

CEDA research shows that the proportion of business owners as a share of the workforce has declined steadily over the past two decades, hitting a record low in 2025.

As Cilento points out, "New businesses are a launching pad for future innovation, competition and jobs. Their dynamism comes from their novelty, adaptability, risk appetite and energy.

"If we want a more productive, competitive and resilient economy, we need to make it easier for people to turn a good idea into a growing enterprise."

As we'll see, this is becoming harder, not easier.

Anne Nalder, founder and CEO of the Small Business Association of Australia (SBAA), says, "A modest decline in small business numbers may have limited macroeconomic effects. But a sustained and widespread decline would likely lead to weaker job creation, reduced competition, less innovation and growing economic disparities between regions and major cities."

Nalder cautions that "regional Australia would generally experience the most significant social and economic consequences because small businesses often form the backbone of local economies".

Beyond these issues, there is another factor making life harder for small business owners. And that's the sheer weight of costs, regulations, compliance measures and taxes that small operators face.

Starting a business is easy - staying afloat is not

The World Bank ranks Australia in seventh place globally for ease of starting a business (New Zealand comes in at number one).

That's no surprise. It costs nothing to sign up for an ABN (Australian Business Number), and it can be done online in a few minutes at the Australian Business Register portal.

That's where the easy bit often ends.

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) says that running a small business has become harder than it needs to be, with many owners "worn down" by costs, complexity and unfair practices that they have no control over.

The workplace changes hitting small business hardest

Recent workplace changes may enhance the wellbeing of employees, but they often add to the burden for small businesses.

Can small businesses absorb another wage increase?

COSBOA chief executive Skye Cappuccio says many small businesses will need to make difficult decisions about how to absorb this increase in labour costs.

"Small business owners want to pay their people fairly, and they know their workers are feeling cost-of-living pressures," Cappuccio says.

"But this decision lands at a time when many small businesses are already under intense pressure from rising inputs, energy and fuel costs, rent, insurance, interest rates, increasing insurance premiums and ongoing regulatory change.

"For businesses operating on already thin margins, a 4.75% wage increase is not just a headline figure. It flows through overtime, penalty rates, allowances, payroll tax, superannuation and other employment costs."

Cappuccio believes many small businesses will look closely at prices, rosters, hours and hiring plans. Others will absorb the cost through owners working longer unpaid hours.

Why Payday Super is causing cashflow headaches

At the same time, small businesses are grappling with the introduction of Payday Super, introduced on July 1 this year.

It calls on employers to pay employee super contributions each payday, as opposed to quarterly. This is undoubtedly a plus for workers.

The problem is that unlike employees, who may be paid weekly, it can take weeks, even months, for businesses to collect revenue.

Accounting platform Xero found 87% of small businesses say paying super more frequently will put pressure on cashflow.

And the strain is personal. Almost one-third (31%) of small business owners expect to dip into personal savings to meet Payday Super obligations, while 31% anticipate needing to borrow money.

Close to two in five (38%) business owners plan to delay paying themselves to relieve the pressure on cashflow.

Why sole traders are putting off their own super

The irony is that while workers are benefiting from Payday Super, many self-employed Australians are scrimping on their own retirement nest egg.

Research by Hnry, an app and tax service designed to help sole traders, found two in five of the nation's 1.7 million sole traders plan to delay super contributions, nearly double the proportion who said the same in 2023.

Hnry Australia managing director Karan Anand says that Australia's superannuation system was built around traditional employment, leaving many sole traders to navigate retirement savings without the same support available to employees.

He explains, "For sole traders, there's no employer making compulsory payments in most circumstances, so super becomes another financial decision competing against rent, fuel, groceries and business costs."

As Anand notes, when cashflow is tight, super is often one of the first things self-employed workers put on the back burner.

A $7 coffee, a 14-cent profit

Each sector, industry and individual business will face its own costs, but as a quick guide, let's focus on hospitality and, in particular, cafes.

After all, at close to seven bucks for a large flat white, there's got to be money in running a cafe, right?

Not always.

According to cafe industry platform Clever Cafe, the current industry average net profit margin for an independent cafe in Australia is 2%-5%.

On a coffee priced at, say, $7, that would see a cafe earn a profit of 14 to 35 cents.

Clearly, you need to sell a lot of lattes to make big bucks.

This doesn't even consider the costs involved in opening a cafe, which payments platform Square says can be between $100,000 and $500,000, depending on size and location.

Square offers a breakdown of how much it costs to open (and run) a coffee shop in Australia, as shown in the table below.

This doesn't include the plethora of taxes that small businesses may face, ranging from income tax, goods and services tax (GST), payroll tax, fringe benefits tax, excise on imported goods, and potentially capital gains tax if the business is sold.

What replaces a small business when it closes?

Andrew Griffiths, business strategist and author of Someone Has to Be the Most Expensive: Why Not Make It You?, says, "When a small business disappears, it tends to be replaced by one of four things: a national chain, a franchise, an online alternative or an empty, abandoned-looking space."

None of these options is optimal for consumers or local economies.

Griffiths adds, "The wonderful local restaurant, owned and operated by people who know their customers, is replaced by another franchise selling exactly the same food in exactly the same way as hundreds of other outlets.

"The family-run hardware store or garden centre, built on decades of knowledge and personal service, loses out to a national operator. Or the shopfront simply stays empty because the cost, complexity and risk of starting a small business feels too risky for most."

As Griffiths points out, all consumers appreciate convenience, consistency and lower prices. But unless we support local businesses, we could end up with generic high streets, fewer genuinely distinctive businesses, and less choice.

"It doesn't matter whether we are shopping in Hobart, Cairns, Sydney or Melbourne," says Griffiths. "We increasingly encounter the same brands, the same products and the same carefully scripted customer experience."

Moreover, when a business closes, suppliers further afield feel the pinch, creating a ripple effect across other communities.

Conversely, when we buy from a major corporation or an international online platform, much of our money can leave the community, and often the country.

As it is, some of Australia's favourite retailers are quite open about being foreign owned, including IKEA (Sweden), Apple (US), Aldi (Germany) and Uniqlo (Japan).

But there are other popular brands whose foreign ownership may be less obvious:

• Costco, US owned
• Sephora, owned by French luxury group LVMH
• Bonds, owned by Canadian apparel business Gildan Activewear
• Zara, owned by Spanish retail giant Inditex
• H&M, Swedish owned
• T2, owned by Luxembourg-based CVC Capital Partners

These, and other, multinationals have scale and buying power that eclipses small, local businesses, which, of course, means they have the potential to reward shoppers with lower prices.

But as Andrew Griffiths points out, if price and convenience become our only considerations, we shouldn't be surprised when local choice eventually disappears.

"We cannot say we want vibrant high streets, thriving communities and more Australian-owned businesses, then automatically buy everything from the cheapest national or international operator," warns Griffiths.

"In a world that is becoming increasingly homogenised, when a small business disappears, we lose far more than we realise."

The hidden compliance burden facing operators

"Depending on the venue, operators may need to manage food safety compliance, liquor licensing requirements, workplace health and safety obligations, payroll compliance, responsible service of alcohol training and a range of local council requirements," says Nathan Merriman, general manager of GoTab Australia, a point-of-sale (POS) platform tailored for the hospitality industry.

He notes, "Each requirement may seem manageable on its own. But collectively they create a significant administrative workload, particularly for independent operators and small business owners who are often wearing multiple hats."

Across the hospitality sector, Merriman says the five biggest costs business operators grapple with are labour, rent, food and beverage inputs, utilities and technology.

"Most operators can't simply cut their way to profitability. The focus tends to be on improving efficiency, reducing complexity and getting more value from every dollar they spend.

"The past few years have been characterised by rising costs across almost every part of the business. Labour, ingredients, utilities and insurance have all increased at different points, creating significant pressure on margins."

As he points out, consumers are feeling cost-of-living pressures too, making it harder for hospitality venues to pass rising costs onto their customers through higher prices.

How tax changes could add to the strain

Federal Budget proposals to scrap the 50% CGT discount for small business and replace it with indexation tax at a minimum rate of 30% were abandoned, but COSBOA's Skye Cappuccio remains concerned that broader CGT changes could impact investment, entrepreneurship and productivity.

"Australia needs a tax system that gives business owners confidence to invest, employ local people and continue contributing to the communities they serve."

Cappuccio also believes one of the Budget's key tax reforms, taxing discretionary trust distributions at a new minimum rate of 30%, rather than beneficiaries paying tax at their marginal rate, has been "largely overlooked".

She explains, "There has been very little attention on the 350,000 to 400,000 small businesses operating through trust structures, many of whom now expect a significant hike in their tax bill and a direct impact on their business and their livelihood.

"These are small businesses using trusts for legitimate commercial reasons. Most have annual turnover below $2 million and include trades, retailers, hospitality venues, professional services firms and family-run enterprises in communities right across Australia.

"The proposed changes risk putting additional pressure on small businesses at a time when many are already facing rising costs, workforce challenges and difficult trading conditions," Cappuccio says.

Why Australians still dream of being their own boss

A survey by the Council of Small Businesses of Australia (COSBOA) identified four main drivers that motivate Australians to start a business of their own:

1. Flexibility and work-life balance: Having more control over their time, and being able to choose when and how they work.
2. Financial opportunity: Many current business owners saw self-employment as a way to improve their income, gain financial security, or build something more profitable than working for someone else.
3. Independence and autonomy: A strong desire to be their own boss and make their own decisions was a major motivator.
4. Passion and personal fulfilment: Some owners were driven by a passion for their craft or industry, or a desire to do meaningful work they cared about.

So what does modern retirement look like, and how much money do you really need to be comfortable?

On this episode of the Friends With Money podcast, Money's Vanessa Walker is joined by journalist and author Nina Hendy to discuss the new retirement landscape, the rise of FORO (fear of running out), and the practical steps Australians can take to build financial confidence in later life.

Episode timestamps

00:00 Introduction to the retirement revolution

00:41 Why retirement is becoming more flexible

02:15 Why Australians worry about retirement but don't take action

04:00 How much money do you really need to retire?

06:12 Understanding the fear of running out (FORO)

07:42 New retirement income products and lifetime income solutions

09:30 Longevity and the challenge of longer retirements

10:07 How cost-of-living pressures are affecting retirement planning

11:15 The most important retirement lessons for Australians

13:21 Final takeaways and practical retirement tips

14:30 Conclusion

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Reader question

Hi Paul,

I have been an avid reader of Money and have been following you since you launched your TV show many years ago.

I have a problem and I hope you can help, as I have run out of options.

I have a cheque dated 1979 but misplaced it as I have moved three times over the years. Colonial State Bank does not exist anymore. I tried ASIC unclaimed monies but did not get anywhere. I tried the bank that took over Colonial State Bank to no avail.

I do not know what to do with this cheque. I have heard cheques will be obsolete later.

I would very much appreciate your advice on this matter, please. - Jeanette

Paul Clitheroe's response

This is an interesting one, Jeanette.

I had absolutely no idea what to do either, so I 'phoned a friend' who works in the banking sector at a very senior level.

Colonial State Bank, I am told, was taken over by the Commonwealth Bank of Australia in 2000. Apparently, they will not issue a new cheque, nor would they honour a 47-year-old cheque even if you had it.

None of this is a big surprise to either of us. But one thing banks are good at is record keeping.

To say you are way outside the 'typically 15 months' before a cheque goes stale is an understatement. I took a look at the Cheques Act 1986, but that was not very helpful.

Your cheque being made out in 1979 did not help your cause.

You've tried ASIC's unclaimed monies, so your next step is to go to your state registry. In NSW, that would be Revenue NSW Unclaimed Money.

I wish you all the best, but having lost a cheque made out in 1979, you really will be pushing your luck to sort this one.

Can any Money readers help Jeanette? Drop us an email at money@moneymag.com.au if you can.

Read this next

• How to find lost superannuation in Australia
• Where to lodge a financial complaint
• Are cheques being phased out in Australia?
• Do Australian businesses have to accept cash?
• Is it safe to share your BSB and bank account number?

Three in four Australians are experiencing financial stress, according to Finder's Consumer Sentiment Tracker, while almost half of renters are struggling to pay their rent and 38% of homeowners are finding it difficult to meet mortgage repayments.

The pressure is particularly pronounced among women, with 82% reporting some level of financial stress in July, compared with 69% of men.

Financial therapist Jane Monica-Jones says the figures highlight the strong link between financial wellbeing and mental health.

"There is a huge connection between money and mental health," she says.

Money worries don't disappear when R U OK? Day ends. Monica-Jones shares five practical strategies to reduce financial stress, build resilience and protect your mental wellbeing year-round.

1. Why financial stress and mental health are closely linked

First, Monica-Jones says it's important to recognise the strong relationship between financial wellbeing and mental health.

"There is a huge link between the two. Money and our finances are one of the most stressful aspects of our life, because they hit on our basic needs.

"Money is a device to get our food, our shelter and our clothing. And if that feels under threat - whether that threat is real or not - it can make us feel vulnerable and it's going to impact our mental health."

2. How doomscrolling can make money stress worse

While staying informed can be useful, doomscrolling through news stories about property prices or checking in on a bank balance too often may not only prove detrimental, it can also become compulsive.

"Doing things like doomscrolling or engaging in distressing news articles can actually have an impact on our resilience, our sense of wellbeing and our mental health," Monica-Jones says.

"When we're stressed, we often seek out those things that continue to stress us - we're compelled to seek out the source of our distress. We think that if we can work it out, we can overcome it. But often, that keeps us sucked in and it doesn't necessarily support us."

Monica-Jones suggests tackling these types of behaviours with the same strategies that can be used for any type of stress, such as exercise, meditation, getting outdoors or connecting with other people.

"What might feel supportive is getting more rest, some exercise, some meditation - anything that makes us feel more resilient.

"If we can support our physical and mental health first, we feel more resilient, then we are more able to come up with creative ideas and potential solutions."

3. Why social media comparison can hurt financial wellbeing

Beyond limiting behaviours like excessive news consumption or account checking, Monica-Jones says that it's worth being mindful about the negative impacts of comparison.

"The role of social comparison is really important here. Social media exacerbates it, but advertising companies are also really great at bombarding us and prompting ideas like 'Why can't I afford that expensive car?' or 'Why am I not having those expensive holidays?'"

Instead of becoming lost in comparison, Monica-Jones suggests homing in on what success looks outside of the financial sphere.

"It could be that contribution that we make to our family and to our kids, or our friends, or our parents, or our community.

"It's also about focusing on our personal values. What do I actually find is valuable to me? Is it exclusively to do with the trappings of financial wealth, or are there other values that I could maybe place some deeper focus on?'"

4. How to stay resilient during financial uncertainty

In the midst of periods of greater uncertainty, it can be difficult to imagine a time when things improve. This is where finding perspective can prove helpful, Monica-Jones notes.

"If we're thinking about perspective, we can look at the idea that there is growth and there is contraction. That there is always winter and that there is always spring."

Of course, that doesn't mean that people should stop being proactive about managing their bills or sticking to their budget in the short-term, nor does it mean that the larger issues in the financial world will immediately go away.

Monica-Jones also suggests looking for perspective at an individual level, especially for those who are experiencing financial setbacks.

"Getting perspective, or thinking a little bit wider about our life as a whole, gives us that sense of resilience because we're actually seeing the bigger picture.

"That could be a bigger picture which shows that we're more resilient or capable than we thought we were, because there's plenty of evidence of the hurdles that we've overcome in the past."

5. Where to get help with debt, money stress and mental health

Perhaps the most crucial point of all for those who are in a precarious financial situation or struggling with their mental health is that there are people out there who can help.

"The important thing to know if you're truly struggling, if you've got debt issues, or even if you have small business issues, that you can go and see a financial counsellor. That's part of a free service that's offered to all Australians," Monica-Jones says.

A financial counsellor will be able assess the situation and help with managing debt, developing a budget, negotiating with government agencies or creditors, and accessing any grants, concessions or legal support (if required it) that some may be eligible for.

"There's also other types of professional help. That could be someone like a financial therapist who deals with your challenges with money, but it can also be a financial advisor or a therapist," says Monica-Jones.

If you're trying to get your insurer to repair an issue with your home, your claim might be one of the 63% resulting in the offer of a quick cash settlement. Taking the money might seem easier than waiting for the insurer to arrange the fix themselves, but should you?

The latest research from ASIC recommends carefully considering such offers before accepting them, with the corporate regulator warning home owners taking cash from their insurers could be shortchanged.

In a recent review of the practices of five major home insurers, ASIC found 63% of claims involved providers offering customers cash to arrange their own repairs, instead of the insurer doing this themselves.

While cash settlements can allow consumers to get repairs done more quickly, ASIC found many of these offers didn't reflect the total cost customers would face when arranging a fix themselves.

Key to the issue was the fact that 52% were based on a single quote, often from the insurer's preferred supplier, who might be offering them a discounted rate.

ASIC says individuals could struggle to get the same price when negotiating with suppliers on their own and might also have to deal with unexpected costs that can arise during the repair process.

"The easy option for insurers can be the expensive one for homeowners," says ASIC commissioner Alan Kirkland.

"If the amount falls short, consumers can be left shouldering the cost of repairs and paying the difference out of their own pocket".

Why home insurance cash settlements can fall short

Financial counsellors aren't surprised by ASIC's findings because they often see cash insurance settlements after natural disasters leave customers worse off.

"A cash settlement can look like the quickest pathway forward, but it can also transfer significant financial and practical risk from the insurer to the person who has just experienced the disaster," says Louise Hayes, disaster recovery coordinator at Financial Counselling Australia.

"Many people don't realise that once they accept the payment, they may be responsible for any additional repair costs," adds Julia Davis, external relations and advocacy principal at the Financial Rights Legal Centre.

"We have seen lots of examples of cash settlement offers that were inadequate to repair all of the claimable damage".

Advocates say offers aren't coming with enough information to allow consumers to know if they should take them or not. ASIC says insurers should do better.

"Insurers need to ensure cash settlement offers are realistic, transparent and properly explained," says Kirkland.

"Consumers need enough information to know if a cash payout will genuinely cover the cost of repairs, and if it is the right outcome for them".

What insurers say about cash settlements

The Insurance Council of Australia says cash settlements can offer flexibility - something ASIC agrees with - and allow homeowners to get repairs done quickly, prioritise certain jobs and not be restricted to their insurer's choice of builder.

But it also admits settlements sometimes aren't big enough to cover the full cost of repairs and that work done by a builder of your choice may not be covered by your insurer.

Should you accept a home insurance cash settlement?

How to protect yourself before accepting a payout

Get the details: Ask your insurer to explain what's included and excluded from the settlement, including any repairs already done, as well as costs for temporary accommodation, debris removal, storage or other policy benefits.

Make sure it's enough: Check your cash settlement fact sheet to make sure your insurer has included all the repairs that need to be done. You could be left out of pocket if work ends up costing more than the settlement amount.

Get your own quotes: Your insurer's settlement figure might be based off a discount deal with their preferred builder that you won't be able to access. Try and get your own quotes to see if the amount being offered is realistic.

Know your rights

1. You can decline a cash offer if you'd prefer your insurer manage the repairs themselves. 
2. If the amount offered is too low, ask your insurer to review it, although the review timeframe can vary by insurer and event.
3. If your claim is related to a natural disaster and was finalised within one month of the event, you have 12 months to request a review of the settlement amount 
4. If you find further damage while doing the repairs yourself, stop work if it's safe to do so and contact your insurer for support.

Australia's gross domestic product (GDP) growth reached 0.4% in the June quarter, slightly above expectations, although annual growth slowed from 2.5% to 2.1%.

That's the number everyone is talking about, but I'm not convinced Australians should be celebrating just yet.

Look beneath the headline, and a concerning theme emerges about what is driving that growth.

Government consumption rose 0.6%, while public demand accounted for around one-quarter of the economy's quarterly growth.

In other words, government spending helped drive the economy, and that's not necessarily a sign of a strong or healthy economy.

Households also spent more, but much of that increase came from a jump in vehicle purchases, particularly electric and hybrid cars.

At the same time, private business investment fell 0.5%. While investment remained higher than a year earlier, the quarterly result hardly points to a broad lift in business expansion.

This is where I think we need to be careful. Government spending can keep the economy moving, but it doesn't necessarily make the economy more productive or create lasting wealth.

GDP per person was flat during the quarter, while labour productivity fell 0.2% over the past year. So, while the economy is technically growing, the average Australian isn't necessarily getting ahead.

And guess who ultimately pays for all this?

We do.

In the June quarter, government taxation revenue reached $241.3 billion, while total expenses reached $291.5 billion.

Despite collecting an enormous amount of revenue, the general government sector still recorded a $2.8 billion net operating deficit.

The more governments spend without generating enough additional economic growth, the greater the pressure on future taxes, government debt and the cost of servicing that debt.

Then there's the planned Pacific climate meeting, which has faced criticism over more than $19 million in taxpayer-funded event and broadcast costs.

At the time of writing, only five non-Pacific leaders had confirmed they would attend. Whether you believe the event is worthwhile or not, Australians are entitled to ask whether every dollar of government spending is producing sufficient value.

This also creates a headache for the RBA.

Stronger GDP growth can increase the risk that interest rates remain higher for longer or rise again. The RBA is already concerned about inflation and says spending across the economy needs to slow while capacity constraints remain.

For households, this means budgeting carefully for interest rate relief that may not arrive soon.

For investors and traders, it means looking beyond the GDP headline and considering whether company earnings, debt levels and price trends support the positive economic story.

So, I wouldn't get too excited by a 0.4% GDP number.

The real question isn't whether Australia is growing. It's who is doing the growing, how productive that growth is, and how much of the bill is being sent to taxpayers.

Best and worst sectors

Financials were the best-performing sector this week, rising more than 2% as stronger GDP increased expectations of another interest rate rise. This should support bank margins, while investors returned to the major banks after their sharp falls in August.

Healthcare gained under 0.5%, led by CSL after its agreement with the Trump administration reduced uncertainty surrounding US drug prices and potential pharmaceutical tariffs.

Energy also rose under 0.5%, as escalating tensions between the United States and Iran pushed oil above US$90 a barrel.

At the other end of the market, Information Technology was the weakest sector, falling more than 5% as stronger-than-expected economic growth raised expectations of another interest rate rise.

Materials was the second-worst sector, dropping just under 4% as weaker gold prices dragged down the major miners and gold producers.

Consumer Discretionary rounded out the worst performers this week, falling more than 2% as rising oil prices and renewed interest rate concerns threatened to put even more pressure on household budgets.

Investors are becoming increasingly cautious about the retail spending outlook.

Best and worst stocks

Challenger Limited led the ASX Top 100 this week, climbing more than 5% as rising bond yields improved the outlook for returns on the assets supporting its annuities.

Insurance Australia Group (ASX: IAG) followed, rising more than 4% as higher bond yields improved the outlook for investment income earned on the premiums it holds before paying claims.

Suncorp Group (ASX: SUN) rounded out the leading performers, also gaining more than 4% as higher bond yields improved the earnings outlook for its large investment portfolio.

Both IAG and SUN remain supported by reports that Japanese insurer Tokio Marine considers these preferred Australian takeover targets. That said, discussions remain uncertain, and no deal has been confirmed.

At the other end, Greatland Resources was the weakest performer, falling more than 9%.

This occurred as rising global bond yields pushed gold prices lower and triggered a broad sell-off across Australian gold producers.

With no major negative company announcements, the decline was driven mainly by weaker sentiment towards the gold sector.

NEXTDC Limited followed, also falling more than 9% despite reporting higher revenue and a return to profit. Rising bond yields also weighed heavily on highly valued growth stocks.

Investors also remained cautious about the enormous capital required to expand its data centre network and the company's increasing energy and water usage.

SEEK Limited also fell more than 9% as rising interest rate expectations added to concerns about a slowing employment market and the company's earnings outlook.

The stock also traded without entitlement to its 25-cent dividend this week, which contributed to the fall.

All Ordinaries Index update

The All Ordinaries Index fell heavily this week, breaking below the important 9200 level and recording a loss of around 1% by Thursday's close. While the decline may look concerning, it is not entirely surprising given the market had recently reached a new all-time high.

Attention now turns to 9000, which is the next major level to watch.

Importantly, this level also aligns with the longer-term uptrend established from the April 2025 low. The market has respected this trend throughout the broader rise, so I would expect buyers to step in again around 9000.

That makes next week particularly important.

If 9000 holds and the longer-term uptrend remains intact, this decline is likely another healthy correction. However, a decisive break below both would be a much more concerning signal.

Investors got at least some positive news this week, with the Financials sector moving back into positive territory.

This may suggest investors are rotating towards more defensive areas of the market as uncertainty increases, making Financials one of the better places to hide over the next few weeks.

For now, it is a waiting game.

Next week should reveal whether this is simply a normal pullback after a record high or the beginning of a deeper decline.

Either way, further weakness could ultimately create an opportunity to buy quality stocks at lower prices.

1. Why staying connected to gas could cost you more

Gas companies may have to increase prices more than expected to prevent a spiral of high, volatile prices and shrinking customer numbers in the future, according to a key energy market regulator.

The Australian Energy Market Commission (AEMC) says the nation's gas networks face an uncertain outlook, as demand for their product falls while upkeep costs remain stubborn.

The AEMC, which makes the rules governing retail energy markets in most parts of the country, says thousands of Australians are switching from gas to electricity.

This is leading to retailers and distributors relying on a shrinking number of household and business customers to help cover the costs of looking after expensive distribution networks.

The AEMC says this could lead to a situation where a small number of customers are hit with skyrocketing bills, pushing more of them to cancel their gas contracts, causing the remaining customers to be lumped with even higher network fees.

The body is proposing to force gas companies to look further ahead in their business planning to consider the long term impacts of more customers leaving and basing new spending on forecasted demand, not current consumption.

It says gas companies may have to increase costs "modestly" for customers in the "near future," so they can recover sunk network costs now before demand dries up.

2. Aussie travellers hit with new Fiji holiday tax

Trips to one of Australia's favourite holiday destinations have become slightly more expensive this week, with Fiji's new tourist tax coming into effect on September 1.

Anyone booking accommodation, tours or other holiday activities with large businesses on the island is now being hit with an extra 5% charge.

Several media outlets report the Tourism Services Tax has been brought in to cushion Fiji Airlines against rising jet fuel costs, although travel industry groups have expressed confusion about what sort of transactions the levy will be put on.

Its introduction comes after the Fijian government backtracked on a plan to retrospectively add the tax to bookings that had already been made - a process the country's hotel and tourism association described as a "mess."

The government confirmed in a Facebook post last week that the levy would only apply to bookings made from September 1 onwards.

Fiji was among Australia's top 10 favourite holiday locations for the year ending in June and is just the latest to bring in a tax on tourists: visitors to Bali have had to pay a levy of around $AUD10 each since 2024.

3. Mail to become slower, more expensive as letter business slips

Gas distributors aren't alone in trying to cover static overheads with shrinking customer revenue.

The cost of sending a letter jumped 8.8% this week, as Australia Post continues to use a combination of hikes to stamp prices and cuts to delivery services to try and make its letter business pay for itself.

A small letter now costs $1.85 to send but Australia Post chief executive Paul Graham told SBS News this could soon rise to $2.

It comes after the postal service cut regular letter deliveries from every business day to every second business day in 2024.

In approving the latest stamp price rise, the ACCC noted the extra income would still leave Australia Post short of recovering the cost of providing letter services.

Graham told SBS News letter volumes declined 15% last year and said deliveries could become even less frequent in the future as the business tries to find a sustainable base.

4. EVs overtake petrol cars in Australian sales first

August saw electric vehicles outsell petrol cars for the first time ever nationally, according to the Federal Chamber of Automotive Industries (FCAI), the peak body for the Australian automotive industry.

Of the 100,939 new vehicles sold nationwide last month, more than 27,000 were EVs, while new petrol and diesel sales numbered just 25,824 and 23,608, respectively.

By comparison, last August's petrol vehicle sales totalled more than 38,000.

Data from the Electric Vehicle Council shows the Telsa Model Y - an EV - was the most popular choice for Aussies buying a new car.

Council CEO Julie Delvecchio said it marked a "structural shift underway in the Australian car market".

5. Will half a million dollars and prison labour fix Victoria's potholes?

The Victorian government is promising to spend an extra $352 million on fixing potholes in the state's roads, following incidents where "monster" holes damaged dozens of cars in a row.

The state says a plan to put low-risk prisoners to work tackling simple road maintenance tasks could free up more skilled workers to tackle the road crater crisis.

The government says the extra money and staffing will help it fix double the number of potholes it had planned to mend between now and the end of January next year.

Multiple media outlets report inmates will tasked with mowing lawns, controlling weeds, removing graffiti and picking up rubbish.

The decision to involve prison labourers has been controversial: inmates who work do get paid, but their wages can be as little as $7.15 per day, according to The Guardian. Some of this money might also be compulsorily set aside in savings.

On top of these limited earnings, some grocery products prisoners can buy while incarcerated (on top of what they're given for free) are just as expensive in prisons as they are at regular retail outlets.

Australians are used to seeing their super fund's logo on AFL jumpers and stadium signs.

But some experts believe sport could become much more than a marketing opportunity, with super funds potentially investing directly in teams, sporting infrastructure and sports-related businesses.

The trend is already playing out overseas. Apollo Sports Capital has taken stakes in sporting assets including Wrexham AFC, the Welsh football club made famous by actor Ryan Reynolds and co-owner Rob McElhenney.

Ross Clare, head of research at the Association of Superannuation Funds of Australia (ASFA), believes sport is emerging as a new investment opportunity for super funds.

Why are super funds looking beyond sports sponsorships?

Drawing on discussions at the ASFA Investment Summit 2026, he says interest in sports investing has grown significantly in recent years.

"Owning a sports team was once seen as an exercise in ego and excess, no different to purchasing a luxury yacht. However, as markets evolve and super funds look for new ways to diversify, some experts are making the case for more strategic investment into our favourite pastimes," Clare says.

At the summit, industry leaders including Equip Super chief executive Luke Symons, Emergent Global chief executive Holly Ransom and Deloitte sports practice lead Sandra Sweeney discussed whether sport could play a bigger role in investment portfolios.

Historically, opportunities to invest in sport have been limited, so super funds have largely been involved through sponsorship deals with teams, competitions and venues.

Hostplus is among the most active super funds in sports sponsorships, with partnerships including the AFL, Richmond Tigers and Gold Coast Suns.

Aware Super, Cbus Super and Equip Super also have significant sports sponsorship partnerships.

How could super funds invest in sport?

But some industry leaders believe the next step could be investing in the sector itself.

"But with thousands of Australians eagerly attending sports events or watching at home each week, many funds are now looking more strategically at the sector as a means to generate profits and access new markets," Clare noted.

"First movers, the panel said, will be most likely to generate the best returns from this untapped market, but the path forward isn't clear cut."

What are the risks of sporting investments?

Clare said investors still face "considerable" barriers, including governance requirements and the reputational risks that can arise from athlete behaviour.

However, he said super funds could gain exposure to the sector through investments in sporting precincts, technology companies and other related assets.

APEX, a sports investment firm backed by professional athletes, said Australia offers strong opportunities for sports investors.

"We look at opportunities globally, including in Australia, where the sports ecosystem is vibrant and diverse. Leagues and teams across the AFL, NRL, A-League, Supercars Championship, and Big Bash League all demonstrate strong fan engagement, media rights value, and commercial potential," says APEX.

"Emerging formats, like T20 cricket innovations or new motorsports concepts, are also attracting attention.

"Our focus is on assets that combine live sporting appeal with scalable revenue models and the ability to resonate with both local and international audiences."

Interest in the sector is already growing. Last month, Swedish investment giant EQT Group acquired a majority stake in Melbourne Storm, highlighting the appetite of large investors for Australian sporting assets.

Globally, major investors are increasingly viewing sport as a serious asset class.

Apollo Global Management estimates the sector represents more than $3.5 trillion in opportunities, driven by growing media rights revenues and increasing institutional investment.

It also formed a specialised sports investment division in September last year.

Since launch, Apollo Sports Capital has swiftly acquired a majority stake in Atletico de Madrid, a first-division football club in Spain, as well as minority stakes in New York Yankees from the Major League Baseball in the US, and Wrexham AFC.

While Australian super funds have traditionally focused on sponsorships, the discussion suggests sport could eventually become another way funds seek long-term returns on behalf of members.

This article first appeared on Financial Standard

For years, Australians have been able to build up sizeable frequent flyer points stashes by putting their everyday spending on a rewards credit card.

But that could be about to change.

With a card surcharging ban coming into effect in less than a month, Australia's largest banks have been busy upping card fees, reducing earn rates and adjusting their rewards programs.

The good news? Frequent flyer points aren't dead. But rewards cardholders may have to think about switching up their strategies to adapt to the shifting landscape.

Why are banks cutting rewards points ahead of the October 1 surcharge ban?

From October 1, surcharges on credit, debit and prepaid cards across the eftpos, Mastercard and Visa networks will be banned. American Express will also remove surcharging from its network.

At the same time, the interchange fee cap on consumer credit cards will be lowered to a maximum of 0.30% of the transaction value.

The reforms come out a review by the Reserve Bank which found that a ban would help simplify transactions for consumers and increase competition among payment providers.

In total, the RBA estimates that the ban will save card users $1.6 billion in fees each year. However, critics argue that surcharge costs will simply be passed on via higher prices.

But what do these changes have to do with rewards credit cards and frequent flyer points?

"At a base level, this is about the pool of money that the banks have to fund rewards in the form of frequent flyer points and benefits attached to their cards," explains Adele Eliseo, frequent flyer expert and founder of The Champagne Mile.

"That's going to dramatically reduce from the first of October because they [the card providers] can't apply surcharges and they can't go above the 0.30% interchange cap."

Which banks are cutting credit card rewards and frequent flyer points?

While the surcharge ban is still weeks away from coming in, credit card providers have already been taking action - most notably, Australia's four major banks.

"We expected a uniform approach in terms of bonus points and earn rates being reduced, and benefits being slashed, but what we've seen has been quite varied from the big four," Eliseo says.

"ANZ have removed benefits such as travel insurance from their products, while raising some annual fees. We've also seen NAB and Westpac come out with some caps on earn rates."

Take Westpac's Altitude Qantas Platinum card, as an example. From September 30, the purchase rate and cash advance rate will be increased, and the annual card fee will rise from $75 to $125.

While the Qantas Points earn rates on international and everyday spending will remain unchanged, the earn rate on all other spending will be cut from 0.35 to 0.33 points per $1.

Arguably the biggest move has come from CommBank though. In addition to fee and benefit changes across its credit card suite, the bank announced that it's moving away from its traditional Awards points system and folding credit card rewards into the Yello ecosystem.

"CBA have done something quite extraordinary in entirely overhauling their approach to rewards and centring it around a whole of bank relationship that is going to reward their customers," Eliseo says.

Now that the big four banks have set the agenda, Eliseo expects other credit card providers to follow suit - including major players like American Express.

"We'll see others respond as we get closer to that October 1 date. I think that one thing that's really going to be an interesting to keep an eye on is to see how far down bonus point offers go."

Are rewards credit cards still worth it in 2026?

With changes being made left, right and centre, the outstanding question for many cardholders will be whether their credit card is going to continue to be a valuable points-earning tool.

Ultimately, it will come down to the individual. That's why Eliseo suggests that cardholders crunch their own numbers once they get a clearer picture of any changes being made.

"Many banks will be implementing higher annual fees than what you've previously paid, while also removing some of the benefits associated with those cards.

"So really, it's worth doing the maths to make sure that the benefits you're getting still make sense for the amount you're paying for the product."

Going forward, Eliseo believes that there will be opportunities to earn a competitive number of frequent flyer points through credit card spending though. It just might not be quite as generous.

"While we've seen some of the banks reduce their points per dollar earn rates on spend, there are still solid earn rates available.

"Some of them are capped, so if you're a really high spender, you might find it hard to put a huge amount of spend through those cards.

"But for someone spending $5000 a month, there are still good opportunities that make using a credit card as a vehicle to collect points worthwhile. As long as it suits your individual circumstances."

How can you earn frequent flyer points without a credit card?

While a relatively lucrative option, historically, rewards credit cards are just one of the many ways in which Australians can earn the likes of Qantas Points and Velocity Points.

"The airlines have become really good at engaging with businesses beyond banks, so the ways in which people can earn points on the ground have exploded in the past five years," Eliseo says.

"Really, it's possible to earn points across most everyday spending categories now, like groceries and petrol.

The Money team won Single Article of the Year, Magazine Cover of the Year and Newsletter of the Year in the 2026 Mumbrella Publish Awards, announced on September 2.

Money won Single Article of the Year for its feature 'The Perfect Storm', written by Ryan Johnson. The article traced the in-depth impact that online gambling has on children.

"Our preliminary research found children 12-17 years old spent approximately $18.4 million annually on pokies, race betting, scratchies, and Esports and Fantasy sports betting," says Vanessa Walker, managing editor of Money.

"We decided to investigate the link between common social norms in Australia (scratchies, Melbourne Cup - the race that stops the nation) and problem gambling."

"Australia loses more to gambling per head that anywhere else on Earth, so we rounded out the feature with practical help: how to spot the signs of gambling in children and six steps to help teens resist gambling as well as the top resources parents can turn to. "

 

 

 

 

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Money also won Magazine Cover of the Year for the May 2026 cover, which focused on the publication's annual Life Insurance Awards and featured an innovative bubble wrap design

"We decided to appeal to people who may not consider picking up a magazine issue on life insurance by using a common product that they could relate to, something that most of us use to protect our most precious objects," says Walker.

"Few people can resist reaching out to pop bubble wrap so we wanted the cover to have strong tactility."

In addition, Money won Newsletter of the Year for its weekly Wednesday and Saturday newsletters. The Money newsletter community consists of 58,000 subscribers, which is growing while delivering ongoing, strong engagement from readers looking for ways to create financial freedom.

"Money's weekly newsletters succeed by combining disciplined content curation, reader-first storytelling, clean design, and a highly intentional distribution strategy," says Walker.

"It stands out for its ability to translate complex financial topics into clear, actionable insights while delivering measurable, industry-leading engagement and sustained audience growth.

"We have seen an 8% increase in subscribers year-on-year, with a 26% decrease in unsubscribes, so we're pleased to see the content is resonating with our audience."

Money was also named a finalist in Publication of the Year, recognising the masthead's achievements across multiple categories.

"The recognition is a fantastic result and a reflection of the hard work that happens behind the scenes across editorial, commercial, marketing, data and research, client success, product development and operations," says Michelle Baltazar, executive director of media at ISS Market Intelligence, the publisher of Money magazine.

"We're delighted to see Mumbrella recognise the growing importance of personal finance media as it celebrates its 30th anniversary. The acknowledgement reflects the vital role personal finance journalism plays in helping Australians make better money decisions."

Thinking of borrowing against your home? Falling property prices could put those plans at risk.

A decline in your home's value can erode the equity you've built up, reducing your borrowing power and, in some cases, leaving you with no equity to access at all.

That scenario may become more common if the Commonwealth Bank's forecast proves accurate.

This week, the bank warned house and unit prices could fall by more than 10% in Sydney and Melbourne during 2026, cutting more than $100,000 from the value of a $1 million home.

What is home equity?

The equity you hold in your home is the difference between its market value and what you still owe on any loan you used to purchase it.

"[It's] the portion of your home's value that you own outright, so it's essentially the difference between what your home is worth and what you owe on that home," explains Blake Cullen, senior financial adviser at Evalesco.

Most banks calculate your "usable equity" - the portion of equity they'll let you borrow against -- by taking 80% of your property's value and subtracting what you still owe on your loan.

So if your property is worth $1,000,000 and the remaining balance on your loan is $500,000, your usable equity would be $300,000.

How can you access your home equity?

Accessing equity means borrowing or withdrawing an amount of money from your bank that is in proportion to the usable equity you hold in your home.

Most people do this by taking on a new or bigger loan from the bank they have their mortgage with, but talking to loan brokers or other lenders as part of a refinancing process can also help you unlock equity.

Cullen says many of his clients spend the money they get through their equity on renovations on their home, but notes that putting it towards investing has also become "more prevalent".

How will falling property prices affect your home equity?

Real estate experts say most Aussies have a decent amount of equity in their home, thanks to their properties having consistently increased in value since they've bought them.

"For the last 10 years or so that I've been doing this, it does build quite quickly," says Ruth Van Eekelen, broker with Aussie Home Loans.

"But lately we have seen it start to stall somewhat and not grow as much as it has been".

Falling real estate prices in most parts of the country have squeezed borrowers' equity.

This week, real estate data company Cotality revealed national home values had fallen for the fifth month in a row, most recently by 0.9% in August.

In some parts of the country, declines have been much larger.

When the market value of your home falls closer to the amount remaining on your loan, your equity in the property - and, by extension, the amount you can borrow - shrinks.

If your property's value reaches what you still owe on your loan or falls below it (negative equity), you won't have any usable equity on which to borrow.

Whose homes are most at risk?

Sam Gordon, founder and director of advisory Australian Property Scout, says people who have bought homes in the last year or so in expensive suburbs in large cities are at most risk of having no usable equity.

"First homebuyers who've used a 5% deposit to be able to go out and buy property -- if they were to buy in an area where the values had [fallen], there is a very decent chance they could be in negative equity... or sitting at 100% debt on home value," he says.

How to check your usable equity

Most banks have calculators on their websites which can show you your estimated usable equity.

But to use these, you'll need to know your home's value and your remaining balance on any loans.

What to watch out for before using the equity in your home

1. Make sure you've got the money to service any loans

Most bank products that let you access your equity are loans, so your bank will still want to make sure you can afford the extra costs that come with these.

"Even if you have a lot of equity in your property, that doesn't automatically mean you can access it," says Ruth Van Eekelen from Aussie Home Loans.

"You still need to have the income available, we still have to verify that you have capacity to repay [the loan]".

2. Home improvements don't automatically boost equity

Van Eekelen says another mistake home owners make is assuming any amount they've spent improving their home will automatically be reflected in the property's value and therefore be added to their equity.

"If you spend $200,000 fixing-up or doing renovations, that doesn't automatically mean you're adding $200,000 worth of value," she says.

3. Think before investing with equity

Noting the growth in people using home equity to invest, Blake Cullen from Evalesco says anyone pursuing this option should consider how changes introduced by the recent federal budget may have affected popular investments.

"You want to be having a good think around the types of investments that you want to put that money into," he says.

"Based on the changes, it's just worth having a second thought as to what is a good investment going forward."

Leaving a lump sum of money to your children or grandchildren needs careful planning at the best of times. But it becomes a fraught decision if they or their partners have a substance or gambling addiction, other problems, or are simply clueless when it comes to money.

It isn't smart to give vulnerable beneficiaries a large amount of money because they can potentially blow up the family wealth. In a time of widespread scamming, they could easily be manipulated by an outsider who will rip them off.

They could need special estate planning to protect them.

One estate planning strategy that provides a level of protection after you die is to set up a testamentary trust in your will.

A testamentary trust can protect the capital and distribute an income to support family members on an ongoing basis. This means the money you leave your heir can't disappear quickly and leave them destitute for the rest of their lives.

One scenario would look like this:

"Your will might be the first few pages, and then it will be followed up with 15 pages of how the funds may be held in a testamentary trust under the following terms, and that will give powers to the trustee about what to do with the money and how it can be distributed," explains Peter Bardos, tax partner at HLB Mann Judd.

It turns out that testamentary trusts are the last frontier of trusts, explains Anna Hacker, client director at Pitcher Partners.

They are still standing with their tax and asset protection strategies intact after the government changed the tax status of 840,000 discretionary trusts, known as family trusts.

"A testamentary trust will be the only way to have both the tax planning and the asset protection," says Hacker.

The income from all sorts of testamentary trusts will be exempt from the minimum tax of 30%, starting from July 2028, on family trusts announced in the Budget.

Hacker says the estate planning industry is still waiting for final clarifications about the treatment of testamentary trusts from the government and recommends anyone with a testamentary trust may need to review it when this comes through.

Testamentary trusts are very different from family trusts because they only come into effect upon the death of the will-maker, who has stipulated a testamentary trust in their will for their assets.

A family trust can be set up while parents and their beneficiaries are alive, delivering an income.

The tax advantages of testamentary trusts

One of the benefits of a testamentary trust is that if the parents of young children tragically die, the testamentary trust is able to distribute an income to beneficiaries aged under 18 that is taxed at adult tax rates.

This means they can have at least $18,200 a year tax-free, or $36,400 tax-free for two children.

This way, under-18 beneficiaries can avoid high tax penalty rates on income going to children, which climbs to 66% for amounts between $416 and $1307, and then 45% for income over $1307.

"This is pretty handy from a tax perspective," points out Bardos.

"It could help with paying, for example, private school fees, in a more tax-efficient way."

The asset protection catch you need to know

The asset protection that testamentary trusts provide is a key factor for people who set them up.

They can offer some protection in instances of bankruptcy and relationship breakdowns.

"We live in a society where the rate of divorce is quite high, and we have lots of blended families. People want to support their bloodline if there's a relationship breakdown for any of their kids," says Hacker.

To protect lineal descendants, she says it's important to get the framework right for asset protection.

A testamentary trust for a single child may not necessarily be exempt and protected in a divorce.

Bardos agrees that testamentary trusts don't necessarily provide the protection that a lot of people think they do.

"If a child has a testamentary trust from their parents, and that child is the sole trustee, the sole beneficiary, and the trust pays for all of their lifestyle and perhaps their spouse's lifestyle, my understanding is that's more likely to be brought into a matrimonial dispute or separation than if that child perhaps didn't have that same level of control over the trust," says Bardos.

Hacker says it is popular to place all the children in a testamentary trust as equal beneficiaries to help protect the assets from a family court.

Appointing an independent controller of the trust, such as an independent trustee, can be viewed more favourably in family law cases.

"That is going to be far safer from an asset-protection point of view and what I'm seeing more and more," says Hacker.

But she says getting the protection right and ruling from the grave can cause issues for families.

She advises families that they need to be clear about whether putting all the children together in a testamentary trust is going to work.

"Is that going to cause friction within the family unit? Is that going to be opposite of what you want?

"I'm sure they might have a trust that's growing and supporting people, but is it actually going to make them hate each other if they are not able to interact properly?"

Testamentary trusts are not as flexible as discretionary trusts.

One limitation is that assets dealt with under a will need to be the asset of the will-maker, explains Bardos.

They can't be assets owned by their investment company or family trust.

"When you're going through the process of estate planning, understanding what actually can go into a testamentary trust is important," says Bardos.

Avoid onerous directions

Hacker says flexibility is key in a will, and giving the trustee discretion to direct assets either to a testamentary trust, directly to beneficiaries, or a mix of the two takes into account what is going on with the beneficiaries.

"They want to be able to choose the right approach at the time.

"Do they need to pay off their mortgage, in which case they might want it personally? Do they have a whole heap of expenses?

"You don't know what that's going to look like, so you have that discretion to decide where it's going to go later," says Hacker.

An alternative to testamentary trusts, Bardos says, is an inter vivos trust that can be set up during someone's lifetime and have terms whereby the capital stays in the trust and the income is distributed until an age set down by the trust.

An inter vivos trust allows parents to control the money while they are alive, and it can be locked in when they die.

The holiday home, the great Australian aspiration. A discretionary purchase that promises long-term capital growth, weekends away with family and friends and, increasingly, an income stream to help cover the mortgage.

Summers on the beach in Noosa, Byron Bay or Lorne. Winter school holidays at Mt Hotham. A week of wine and solitude on Tasmania's East Coast.

For years, a few weeks of short-term rentals helped offset the holding costs. But that equation has become more complicated.

Short-term rentals rebounded strongly after the pandemic, reaching more than 174,000 active listings nationally by the end of 2024.

As the sector has grown, governments, councils and the ATO have tightened the rules, while higher interest rates and rising operating costs have made holiday homes more expensive to own.

So, does a holiday home still stack up as an investment in 2026?

Why investors still love holiday homes

Wisebuy Home Loans founder Brad East says whether short-term rentals still make financial sense had been under scrutiny well before the Budget and the ATO's renewed focus on holiday home deductions.

Many buyers are attracted to the flexibility of owning a holiday home they can enjoy themselves while earning income when they're not using it.

"A lot of the time it's for more personal reasons as opposed to investing reasons," he says.

"They might buy an apartment on the Gold Coast and say it's an investment, but they're also staying there every month. It's really a lifestyle purchase."

East says buyers need to separate those two objectives before they purchase because that's how lenders assess the property.

Rather than using projected nightly rates to assess borrowing capacity, lenders generally rely on a long-term rental appraisal.

Once a property has been operating as a short-term rental for around 12 months, they may also consider the income declared in the owner's tax return.

"You can't tell the bank it's going to earn $1000 a night. They'll use the lower long-term rental appraisal figure instead," he says.

That means buyers need to be confident that they can afford the property without relying on projected short-term rental income.

East says short-term accommodation is also far from a passive investment.

"If it is a proper investment, then it almost needs to be run as a business," he says.

The Airbnb tax traps every owner needs to know

Borrowing capacity is only one consideration.

The tax treatment of holiday homes can also have a significant impact on the investment's overall return.

Since July 2023, booking platforms, including Airbnb, Stayz and Booking.com, have reported host income directly to the tax office under the Sharing Economy Reporting Regime.

From July 1 this year, the ATO introduced new guidance spelling out exactly how holiday homeowners should apportion expenses between private holidays and paying guests.

The ATO is paying attention to whether a property is genuinely available for rent, whether below-market rentals to family and friends have been treated correctly and whether a holiday home is being operated as a legitimate income-producing investment rather than kept primarily for private use.

DSR Partners partner and tax specialist Taylor Hulls says anyone buying a holiday home with plans to rent it out should understand those rules before making assumptions about what they can claim.

East recommends doing two things before committing to investing in a holiday rental property:

1. Check the ATO's website

The examples they provide leave no room for ambiguity over primary use and legitimate claims.

"Often the most common mistakes or misconceptions clients have are related to the deductibility of their expenses and the private use apportionment. We also commonly see issues with claiming deductions for repairs or capital improvements," says East.

"Clients often spend a potentially large sum on renovations, or even replacing a hot water heater, oven or air conditioner, and expect immediate tax relief in the year they spend it.

"Even though these may appear to be repairs, the vast majority of expenditure above $300 needs to be depreciated over a period of up to 40 years.

2. Prepare a cashflow forecast

Before committing, East recommends preparing a detailed cashflow forecast covering mortgage repayments, strata, council and water rates, insurance and other holding costs, then stress testing the investment against seasonal income and longer-than-expected vacancies.

"Planning out the potential best and worst-case scenarios for the timing and amount of income received from your investment ensures you have a plan in place to meet these holding costs when they are due," he says.

"It's awesome to have a fully booked property over the Christmas holidays bringing in a premium, but you still have to pay the mortgage in July."

Why location matters more than ever

Research from The University of Sydney found that short-term rentals accounted for almost one in five homes in Byron Bay at the end of 2024, compared with 3.2% on the Sunshine Coast and much lower levels across most metropolitan areas.

In the past three years, that concentration of short-term rentals has prompted many councils to tighten local planning rules to return more homes to the long-term rental market.

Home Scouts founder Bronwen Stacey specialises in helping buyers purchase holiday homes in Noosa on Queensland's Sunshine Coast, with many intending to offset holding costs through short-term rental before eventually relocating or retiring.

"There's a lot of due diligence that we undertake for any shortlisted property, but short-term letting approval is definitely one of the early deal breakers that can eliminate a property before it even reaches the inspection stage," she says.

Noosa Council tightened its short-term letting rules in February 2022 to ease pressure on the long-term rental market.

Many holiday rentals now require council approval before they can operate, and are subject to ongoing conditions and annual fees.

Since the rules were introduced, more than 3100 properties have been approved to operate as short-term rentals.

At the same time, the council has refused 103 applications and issued 180 infringement notices against owners breaching the rules.

Stacey says that the changes haven't stopped buyers looking for holiday homes.

"It's important that buyers are educated from the outset about the limited supply of approved properties, the areas where short-term letting is permitted and the likely returns, so they have realistic expectations," she says.

Stacey says the restrictions have prompted some buyers to rethink their plans where achieving strong holiday rental income is fundamental to the purchase.

"For the majority of our clients, the primary motivation is securing the right property in a tightly held market.

Lifestyle is usually the driver. Rental income simply helps cover the holding costs until they're ready to move."

The reality of running a holiday rental

So will the property perform as a short-term rental?

Nesty co-founders Sally Broad and Felicity Lewis have spent almost a decade managing holiday homes across Victoria's Surf Coast. They offer this advice:

Be realistic

The biggest misconception they see is how much income owners expect the property to generate.

"People often think they're going to make more money than they actually will. Once upon a time that was probably the case, but markets have changed and there are so many more variables," says Broad.

"You have to be realistic about how much money a short-term rental will make you.

You can't enter with the mindset that you're going to make a profit because you may not even cover all your costs."

Work out your goal

Before Broad agrees to manage a property, the first thing she asks is what the goal is.

"If you have a holiday home and need it to generate a certain amount of income every year, we can't guarantee a return because the market is always changing. We can't make those promises," she says.

Most clients use the properties themselves as well as renting them out.

About half block out peak holiday periods for family use, while the remainder leave the calendar open to maximise bookings.

Be prepared for the costs

Even after the ATO's announcement on greater scrutiny of holiday home usage and deductions, Broad says few changed the way they use their properties because rental income was never the primary reason they bought.

"They're fortunate enough to own a holiday home. Any income they make in between is a bonus."

However, almost all owners underestimate the work, and costs, involved before the first guest arrives.

Avoid doing it on the cheap

"Invest in good mattresses, make the property feel welcoming and get a stylist in if you need to.

If you start well and get good reviews early, you'll make more money," she says.

Presentation, professional photography and thoughtful furnishings all influence bookings, while a distinctive feature such as a spa, fire pit or family-friendly outdoor space can help a property stand out in a crowded market.

Get the pricing right

Broad says successful short-term rentals require constant revenue management and owners who refuse to adjust prices during quieter periods often end up with empty calendars that ultimately reduce annual returns.

"You've got to be flexible.

There are months when prices are lower, but filling those quieter periods can produce a better return across the year than holding out for one expensive booking," she says.

How one family made their holiday home pay

It's the advice Sarah Hamilton and her family took when leasing out The Soak House, now one of Nesty's best-performing properties.

The Lorne holiday home, purchased in August 2025, is walking distance to the beach.

The three-bedroom property sleeps eight and rents for more than $1500 a night during the peak summer season.

Following Broad's advice, the family hired a stylist on settlement to refresh the interiors and installed a spa on the deck for guests to enjoy while taking in ocean views.

The changes doubled the property's nightly rate and significantly increased occupancy.

Hamilton says after their experience with their first short-term rental in Aireys Inlet, the family was realistic about the intention of the purchase and never expected the property to fund their lifestyle.

"It's not a big money maker," she says.

"It does a good job of covering most of the costs while we're not there."

They're now considering adding a Euca-built two-bedroom modular home on the large block to help maximise the return and provide extra space for their growing family.

But the income isn't the biggest driver.

Instead, Hamilton says one of the benefits of short-term renting is that the house is maintained year-round, professionally cleaned between guests and ready for the family to enjoy whenever they arrive.

The verdict: Are holiday rentals still worth it?

Despite the tighter regulation, higher holding costs and increased scrutiny from the ATO, Cotality research director Tim Lawless says short-term rentals can still outperform traditional leases, albeit in the right locations.

"The maths of short-term renting has become more nuanced and much more geographically specific," he says.

"They can still stack up where the property is in a high-demand tourism market, occupancy is consistently strong and the rental premium is sufficient to offset higher operating and compliance costs."

Lawless says the challenge is that investors can no longer assume those conditions exist simply because of a property's address.

He points to Queensland's patchwork of council rules that vary between local government areas and even individual suburbs depending on zoning and dwelling type.

That makes due diligence critical, he says, particularly as councils continue to look for ways to protect long-term rental supply.

"Some investors may decide the additional compliance burden, risk and uncertainty aren't worth it, particularly if they were relying on year-round short-term letting to make the investment stack up," he says.

"For some investors, a traditional long-term rental may now look more attractive, particularly where the gap between short-term and long-term rental returns has narrowed."

Short-term rentals haven't become a bad investment and can still make sense for investors prepared to do their due diligence.

But they're not a set-and-forget investment or source of passive income.

Lending policies, council rules, tax obligations, operating costs and seasonal demand all need to be considered before taking the plunge, not after.

Reader question

Hi Paul, I'm a 58-year-old woman based in Brisbane.

Some time ago I thought I'd get some shares in medical marijuana companies.

About a decade later my accountant who does my tax returns suggested selling them, but I need a broker for that right?

I'm obviously not financially savvy or invested enough to do what needs to be done with shares, so how do I divest myself of these piddling little shares that aren't worth a broker's time and fee?

Some are through Commonwealth Direct Investment Account (CDIA) and others elsewhere. - Kirsten

Paul's response

You have given me a good chuckle, Kirsten.

I think we all do this from time to time.

I was sick and tired of some equally 'piddling' individual share investments that seemed a good idea at the time, but are really just an administrative pest.

I went to the share registry for these shares, fortunately they were mainly with the same registry and pressed the sell button.

Pretty poor form, I know, but I barely looked at the cost. It was a big registry, so a fair fee.

A cheaper way would to have been pop them on my banks share trading site and I reckon I could have saved about $60 across my little holding, but given the time involved, I figured it just best to hit 'sell'.

In particular with the new CGT coming in June 30 next year, I can tell you one thing for sure.

I'll be holding shares in low-cost ETFs where I have one price for future CGT calculations.

So check out the share registry for your shares, the companies themselves may offer an 'unmarketable parcel' no-cost buyback, or a low-cost service such as your banks or one of the many external providers.

What to read next

• 29 investing terms every investor should know
• The tax traps when you invest in shares, ETFs and crypto
• What you need to consider before selling shares
• The risks of 'sexy investing'
• Ozempic, medicinal cannabis and the rise of vertical healthcare

That is why we look for companies that provide critical infrastructure for major structural shifts. In the global energy transition, NKT A/S (NKT: DC) is such a linchpin in its sector, electrical transmission grids.

Electric grids are under pressure to deliver to three areas of exponential demand growth: the need for renewable generation, wholesale EV adoption, and the boom in data centre and AI demand.

According to the International Energy Agency (IEA), the world must add or replace 80 million kilometres of power lines by 2040 - effectively doubling the existing approximately 40 million km global grid to prevent severe transmission bottlenecks - in order to connect the generators with their customers in these new economies.

This has created a material operational bottleneck.

High-voltage direct current (HVDC) subsea and underground cable manufacturing is concentrated among a small number of major Western players: NKT, Prysmian, and Nexans.

Barriers to entry are high.

It takes over three and a half years to bring new capacity on line, manufacturing facilities are capital-intensive and specialised cable-laying vessels are scarce, making it almost impossible for current industry capacity to meet kilometre demand targets.

The trio of grid companies is booked solid for the next 10 years, leaving a structural deficit that cannot be bridged.

While Prysmian and Nexans are formidable legacy giants, in our view, NKT is the superior investment vehicle for exposure to the HVDC grid boom given its pure play HVDC focus, capital efficiency, and execution track record.

Cable manufacturers previously operated as low-margin commodity price takers, accepting slim terms just to maintain plant utilization. That dynamic has completely inverted.

Transmission system operators (TSOs) like TenneT (Netherlands/Germany), and 50Hertz (Germany) are no longer running standard procurement tenders.

Instead, they are locking in massive multi-year framework agreements and paying NKT capacity reservation fees and forward progress payments. TSOs do this to guarantee factory slots and secure cable-laying vessels years in advance.

These arrangements can fund NKT's capital expenditure upfront, reduce balance sheet funding risk and improve NKT's pricing power.

As high-margin HVDC projects step up in execution and new capacity comes online, NKT's operational earnings before interest, taxes, depreciation and amortisation (EBITDA) margins are expected to expand toward approximately 20%.

Based on current assumptions around pricing, customer-funded capex and project execution we believe that NKT's return on capital employed (ROCE) could increase from aproximately 12% today to over 24% over the next five years.

That is a pretty compelling statistic, in our view.

The grid replacement cycle in Western economies is a multi-decade affair.

On two-year forward consensus estimates, as recent capacity investments ramp to full output, NKT trades at an attractive approximately 10x-12x EV/EBITDA (and under 18x price to earnings ratio).

For a dominant pure-play business with customer-financed capital expenditure, a €13 billion-plus order book and exposure to long term grid investment, we view the current valuation as attractive relative to the potential earnings growth opportunities - we thought that might excite you.

But are they the right home for your cash?

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Olivia McArdle, head of deposits and payments at Macquarie Bank, to unpack everything savers need to know about term deposits.

Episode timestamps

00:00 Introduction

01:25 Term deposits versus savings accounts

04:10 Are higher rates making term deposits more attractive?

05:50 How banks determine term deposit rates

08:15 Common mistakes savers make with term deposits

10:50 Can you access your money early?

13:10 Term deposits and the Financial Claims Scheme

14:20 Conclusion

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

Confession time. I love a good spring clean.

Not just the "dust and tidy" variety, but a good old "pull everything out, scrub everything clean and only put back what you want in an ordered way" type of clean.

My wife often takes a deep breath when I say, "I'm thinking of cleaning out the bedroom cupboards."

She knows soon there will be piles of things once stored in the upper reaches of our wardrobe strewn across the bedroom as I fastidiously clean everything before re-ordering it into "keep", "give away" or "sell" piles and neatly packing it all away again.

It's total chaos for a bit, and it can be exhausting work, but in the end the whole house seems to feel lighter, more peaceful, more ordered and more in control.

I know I'm not alone in this - people do feel this way after a good spring clean.

It seems that cleaning and decluttering our physical environment has the effect of decluttering and ordering our mind as well.

If we feel in control of our external physical space, we feel in control of our mental space as well.

What a lot of people don't realise is that every now and then we should also spring clean our finances.

Why it's time for a financial spring clean

This is not like doing tax returns or EOFY accounting - it's a different head space.

This is about really getting into the financial nooks and crannies of your superannuation, loans, credit cards, memberships and subscriptions.

Discover what the real costs are and what you are paying for them.

When I spring clean I often find things I had forgotten about, or never knew I had.

The same thing happened recently when my wife and I did a financial cleanout.

How reviewing your super and insurance can save money

Picking through my super we discovered I had certain insurance that was costing quite a bit each month - it was a product that suited our circumstances a few years ago, but we no longer needed it.

Out it went and now I have additional money going into my super.

I also found three extra subscriptions that I didn't need and realised my health insurance was more suited to my 30-year-old self rather than my 40-year-old self, and changed it to a more appropriate product, which saved even more money.

That's hundreds of dollars saved every month simply by spending time looking into every corner of your financial lives and throwing out anything that is unnecessary.

It's like giving yourself a pay rise!

The forgotten perks that could boost your budget

Don't forget that many financial products also come with rewards and benefits such as discounts on purchases and entertainment that can make a significant difference to weekly spending.

No longer are we spending on things we don't need; we also have access to gifts and discounts that can really add up.

So with such obvious financial benefits, why is it we rarely look into the darker, hard-to-reach parts of our finances?

Why we avoid reviewing our finances

The main reasons I hear are that some products and benefits can be hard to find, it doesn't feel like an urgent thing we need to do and there are other more obvious, more important (or fun) things to attend to.

But probably underlying all these reasons is that psychologically it feels like a painful and effortful task.

However, the buzz you get from finding hidden treasures in your finances and taking control of your money far outweighs any painful effort.

Spring cleaning our finances increases our financial wellbeing as well as our mental wellbeing.

Give it a go, and you'll be surprised just how good being in control of your life feels.

Private credit, in other words, non-bank lending, has been around for decades. It's attracting particular attention right now though as demand for lending and strong investor interest has pushed the Australian market past the $200 billion mark.

This growth has seen a mushrooming of new entrants to the market. On the face of it, this is giving investors looking for attractive yields and regular income, the benefit of more choice.

However, as Shelby Clark, executive director of operations at Knox Funds, formerly GPS Investment Funds, cautions, "We are seeing a rush of inexperienced companies come into private credit, and their lack of experience can put investors' money at risk."

Knox Funds has been in the market for more than 30 years, and only lends for residential property developments in the South East Queensland area. Other private credit funds are backing very different projects, some with higher risk and less transparency about how investors' money is being used.

Clark, a keen advocate for consumer education, says there are several key factors investors need to weigh up when it comes to selecting a private credit fund:

• The experience of the fund provider
• The underlying assets of the fund, and
• The security the provider has over those assets.

Experience matters

As a market veteran of more than three decades, Knox Funds recently rebranded from GPS Investments. As Shelby Clark points out, "Our name may have changed but our depth of experience hasn't."

And in a sector where so many new funds are coming on board, that experience matters.

"Every industry will experience volatility," says Clark. "What investors need to determine is whether they are choosing a fund that has dealt with volatility before, and so knows how to manage it."

John Cachia, founder and CEO of financial advice firm Thriving Wealth, believes today's cost-of-living pressures and higher interest rate environment may see more investors turn to income-producing options like private credit.

He too says it's important to look beyond the advertised yield and consider "factors such as the fund manager's track record".

Know how your money is being used

When you invest in private credit, you are essentially providing funds to be loaned to a variety of borrowers for a variety of purposes.

Clark says it's critical to understand what a private credit fund is investing in, and know what the underlying assets are.

"Investors need to be wary of underlying assets that are in a volatile market or are a current 'fad' that may not survive the test of time," she explains.

Shaun Ganguly, founder and principal adviser at Prime Years Financial Planning, agrees.

"Private credit is not a monolith, and it's absolutely vital to know what you're getting into," he says. "What are the fund's underlying assets? How does it make the money? Is it lending against property, small businesses or something else?"

According to Ganguly, "the underlying asset matters the most".

He cites the example of a first mortgage with a low loan-to-value ratio (LVR) over a metropolitan commercial property, which Ganguly says would have a completely different level of risk compared with an unsecured loan to a fledgling small business.

"One is backed by a real asset with an equity buffer behind it. The other relies on the health of the business and carries more risk," observes Ganguly. "On a risk-adjusted basis, they are chalk and cheese."

While close to half the finance provided by private credit in Australia is real estate-focused, each fund's underlying investments should be clearly spelled out in the product disclosure documents.

The catch is that some funds are more transparent than others.

Clark explains, "Knox offers six funds, all are backed by residential property developments in South East Queensland.

"Not only can investors see the projects we are funding on the Knox website, the Knox Providence Fund allows investors to choose exactly which development they would like to help fund. This gives investors next level control over what they invest in, and it's popular with people who see a suburb they are familiar with and believe will sell well."

The remaining funds, including retail options Knox Fortitude Fund and Arkus, pool investors' money across a range of South East Queensland-based property developments.