Five great charts on investing for income (or cash flow)

Since I first looked at “Five great charts on investing for income” two years ago, the Australian cash rate has halved, 10-year bond yields have fallen by two thirds and interest rates have resumed falling globally. Ever lower interest rates and periodic turmoil in investment markets provides an ongoing reminder of the importance of the income (cash) flow or yield an investment provides. The environment of low interest rates is challenging for those relying on investment income to fund their living costs and investing for income can seem daunting. So this note looks at five charts I find useful in understanding investing for income.

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Has Australia really had three recessions in the last 28 years?

The claim that Australia has gone 28 years without a recession since the early 1990s recession ended in 1991 has been subject to some criticism in recent times with the economy sliding into a “per capita recession” where economic growth has been below population growth.

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Oliver's Insights: Investment returns have been good, but they are likely to slow over the next five years

The past 10 years have seen pretty good returns for well-diversified investors. The median balanced growth superannuation fund returned 7.3% pa over the five years to July and 8.2% pa over 10 years and that’s after fees and taxes.

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Oliver's Insights - Will the world slip up on oil again? – after oil prices spike as attacks disrupt Saudi production

A significant spike in Australian petrol prices would pose a further threat to consumer spending and growth in Australia, adding to pressure on the RBA to ease further.

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Oliver's Insights - Australian house prices back from the abyss - seven things you need to know about the Australian property market

The Australian housing market remains far more complicated than optimists & doomsters portray it to be. Yes, it’s expensive and heavily indebted but talk of mortgage stress is overstated & it’s been under supplied The combination of rate cuts, the election and a modest regulatory relaxation have helped turn property prices back up, but the upswing is likely to be constrained

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Negative rates, QE & other measures the RBA may deploy – why? will it work? what would it mean for investors? | AMP Capital

Since the RBA started cutting interest rates again back in June and in the process taking them closer to zero there has been increasing debate that it will deploy so-called “unconventional monetary policy measures” such as negative interest rates and quantitative easing. This debate has hotted up in recent weeks after the escalation in the US-China trade war posing a rising threat to global growth, numerous central banks cutting interest rates this month in a so-called “race to zero”, the Governor of Reserve Bank of New Zealand saying that negative rates are possible and RBA Governor Lowe saying that its “prepared to do unconventional things if the circumstances warranted it” even though he also said that QE was “unlikely”. News of a Danish lender offering negative mortgage rates has only added interest to the issue. But what exactly are these unconventional monetary policy measures? Do they work? Would they work in Australia? Are there better options? Will they be deployed and when? What will it all mean for investors?

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Market Update 9 August 2019

The past week saw a roller coaster ride in share markets with sharp falls after China responded to US President Trump’s latest tariffs by letting the Renminbi fall in value and ordering state-owned enterprises to halt agricultural imports from the US and the US responded by labelling China a currency manipulator, followed by a rebound as China limited downside in the Renminbi and more central banks eased only to see softness return as President Trump said US/China trade talks in September may not go ahead.

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Escalating US-China trade war – triggering (another) correction in share markets | AMP Capital

After a third round of talks made little progress last week, the US/China trade war has escalated badly with tit for tat moves on an almost daily basis by each side...

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The Fed cuts rates | AMP Capital

As widely anticipated, the US Federal Reserve has cut its key Fed Funds cash rate by 0.25% to a range of 2-2.25%...

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How are Australia’s states and territories tracking

Australia’s economy has often been described as “multi-speed” which occurs if growth across the states and territories varies significantly.

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8 tips for female entrepreneurs

More Australian women are starting their own businesses but they remain under represented as entrepreneurs with many challenges holding them back. Find out more with AMP

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Protecting Your Super package

The ins and outs of the Protecting Your Super package This year, the federal government introduced laws called the Protecting Your Super package. It’s a big deal because it addresses important changes to superannuation that are here to stay. In fact, there’s even been an industry-wide campaign about how it’s time to check your super. The package aims to protect Australians from super balances becoming eroded by fees and/or premiums in accounts that aren’t being used. And, as a result, encourages us to start being more actively involved with our super.

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The longest US economic expansion ever – does this mean recession is around the corner?

A common concern ever since the Global Financial Crisis (GFC) ended a decade ago is that the next recession is imminent...

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2018-19 saw a rough ride for investors but it turned out okay

The past financial year saw a roller coaster ride for investors. Share markets plunged into Christmas only to rebound over the last six months. This note reviews the last financial year and takes a look at the investment outlook for 2019-20.

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AMP reveals what’s changing in the new financial year

The new financial year will see a raft of laws and scheduled changes coming into force impacting everything from extra super contributions, through to the age you can access the pension and the introduction of a government-funded reverse mortgage option for self-funded retirees.

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Rent vs lifestyle—can you have it all?

Rental payments can make a real dent in your bottom line so it’s a good idea to find a balance between location and lifestyle

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Olivers Insights - Australian growth will be constrained - but here’s nine reasons why recession is unlikely

Australian growth is likely to be weak over the next year or so and this will prompt further monetary easing and fiscal stimulus. > However, several positives suggest recession is unlikely: the current account deficit has collapsed; the $A helps stabilise the economy; the drag from falling mining investment is over; there is scope for extra fiscal stimulus; infrastructure spending is booming; there has been no sign of panic property selling; economic policy remains sensible; population growth remains strong; and the RBA can still do more.

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Olivers Insights - The $A still has more downside, but a lot of the weakness is behind us

The Australian dollar likely faces more downside as Australian growth is weaker than US growth and the RBA is likely to stimulate more than the Fed. However, downside may be limited to around $US0.65 given that the $A has already had a large fall, short positions in the $A are large, the iron ore price remains high (for now) and the Fed is also heading towards rate cuts. Given the downside risks for the $A and that being short the $A is a good hedge against threats to the global outlook it still makes sense for Australian investors to maintain a decent exposure to foreign currency via unhedged global investments.

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Olivers Insights - The nine most important things I have learnt about investing over the past 35 years

there is always a cycle; the crowd gets it wrong at extremes; what you pay for an investment matters a lot; getting markets right is not as easy as you think; investment markets don’t learn; compound interest applied to investments is like magic; it pays to be optimistic; keep it simple; and you need to know yourself to succeed at investing.

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RBA cuts rates to a new record low – why? will it work? how low will rates go? and what does it mean for investors?

Key points The RBA’s latest rate cut is aimed at heading off a further slowing in growth which would threaten higher unemployment and lower for longer inflation. Cutting the inflation target would be a big mistake. More rate cuts are likely to be needed ultimately taking the cash rate to a low of 0.5% next year. Ideally this will be combined with more fiscal stimulus. For investors it means low interest rates for even longer.

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What the Coalition’s election victory means for Australia’s economy | AMP Capital

The Liberal-National Coalition has retained power in Australia’s Federal election. Find out what it means from an economic perspective. Learn more with AMP Capital.

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Australian house prices getting closer to the bottom, but don’t expect a return to boom time conditions | AMP Capital

The negatives weighing on Australian residential property prices remain significant but the past few weeks have seen a number of developments...

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Moving interstate? The cost of living in a new Australian city could surprise you

If you’re relocating to a new city, it’s a good idea to do your homework about living costs…particularly if it’s Sydney.

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The trade war is back – what went wrong, what it means for share markets and Australia | AMP Capital

The trade war between the US and China has returned after talks to resolve their trade differences broke down...

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14 money mistakes to avoid in your younger years

Which of these rookie errors sound all too familiar when it comes to you and your squad?

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Seasonal patterns in shares – should we “sell in May and go away” and what about renewed trade war fears? | AMP Capital

Seasonal patterns typically see shares do well from around November to May and not so well from May to November...

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Inflation undershoots in Australia – why it’s a concern, is the RBA running out of ammo & what it means for investors? | AMP Capital

Surprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates...

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The 2019 Australian Federal election and investors | AMP Capital

Australian elections tend to result in a period of uncertainty which have seen weak gains on average for shares followed by a bounce once it’s out of the way...

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The 2019-20 Australian Budget – the long-awaited surplus and the promise of more tax cuts ahead of the election | AMP Capital

The 2019-20 Budget “delivers” the long-awaited surplus and increased fiscal stimulus mainly via tax cuts/offsets...

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2019-20 Federal Budget

Find out how the measures announced in the 2019-20 Federal Budget could affect you Federal Treasurer Josh Frydenberg has handed down the Morrison Government’s first Federal Budget. Among the proposed changes were personal income tax cuts and changes to super rules. Read on for a round-up of the proposals put forward and a look at how they might affect your household expenses and financial future, whatever your stage of life.

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How to play catch up with your super

Now you can put more into super at the concessional rate of tax, starting from the 2019-20 financial year.

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Women and money in relationships

What to get right when it comes to money matters

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Global growth slowing, plunging bond yields & inverted yield curves – not terminal but shares are due a pull back

The past week has seen a renewed intensification of concerns about global growth. Bond yields have plunged and associated growth worries have weighed on share markets...

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Managing investment risk

Working out your risk profile is the first step towards developing a diversified investment portfolio

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“Millennial socialism” and the swing of the political pendulum back to the left – what it means for investors | AMP Capital

Growing support for higher taxes on the rich and greater government intervention in the economy suggest median voters have shifted to the left...

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Why I still love dividends and you should love them too

Dividends are great for investors. They augur well for earnings growth, provide a degree of security in uncertain times, are likely to comprise a relatively high proportion of returns going forward and provide a relatively stable source of income...

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Most older Aussies say they'd prefer home care over a nursing home

While nearly nine in 10 say they have a preference, less than five in 10 have discussed their wishes with their family. What about you?

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Five great charts on investing – why they are particularly important now

Successful investing should be simple but increasing rules, regulations, choices and social media are making it anything but. At its core, it is still simple though...

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6 predictions for the Australian economy in 2019

AMP Capital's Chief Economist Shane Oliver gives his forecast for house prices, economic growth and interest rates.

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9 retirement thought starters for people in or nearing their 40s

While you’ve still got time on your side, check out this list of things to think about, so you can hopefully continue the party in retirement.

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Australian housing downturn Q&A – how bad will it get? | AMP Capital

Australian home prices are likely to fall another 5-10% this year driven by a further 15% or so fall in Sydney & Melbourne. Tight credit, rising supply and falling price expectations are the main negatives...

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2019 – a list of lists regarding the macro investment outlook | AMP Capital

Despite continued volatility, 2019 is likely to be better for diversified investors than 2018 was...

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The Fed and market turmoil – the Fed turns a bit dovish but not enough (yet) | AMP Capital

The Fed has raised interest rates for the ninth time since first raising rates this cycle three years ago, taking the Fed Funds rate from a range of 2-2.25% to 2.25-2.5% reflecting ongoing confidence in US growth...

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Commercial property investing for SMSFs: why now and how? | AMP Capital

If your SMSF contains residential investment properties, it’s understandable you could be feeling nervous...

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6 checks on whether acquisitions create value | AMP Capital

In the current economic environment many companies are finding it difficult to grow earnings organically so they are turning to acquisitions more frequently...

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More than $5 million in super released for first home buyers

Under the First Home Super Saver Scheme, individuals (who've never owned a home) are accessing a portion of their super savings to do so. First home buyers have withdrawn more than $5 million from superannuation funds1 across the board under a federal government scheme designed to make housing more affordable. Townsends Business and Corporate Lawyers special counsel Michael Hallinan said he was surprised there had been such significant uptake in the scheme's first few months of operation. This was because there seemed to have been too little time to accumulate sufficient eligible contributions to make accessing the scheme – which can only be done once – worthwhile. The First Home Super Saver scheme has been up and running since July 1 this year.

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Corrections, gummy bears and grizzly bears in shares

> The pullback in shares could still have further to go but a deep (grizzly) bear market is unlikely as US, global or Australian recession are unlikely. > Increasing US Federal Reserve openness to a pause in raising rates, the likelihood of a US/China trade deal sometime in the next six months and the plunge in oil prices all add to confidence that a grizzly bear market is unlikely.

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13 common sense tips to help manage your finances | AMP Capital

> Getting your personal finances right can be a challenge. Here are 13 tips that may be of use: shop around when it comes to financial services; don’t take on too much debt; allow that interest rates can go up as well as down; allow for rainy days; credit cards are great but they deserve respect; use your mortgage (if you can) for all longer term debt; start saving and investing early; allow that asset prices go up and down; try and see financial events in their longer-term context; know your risk tolerance; make the most of the Mum and Dad bank; be wary of the crowd; and there is no free lunch...

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Rising US interest rates, trade wars, the US midterm election results, etc - should investors be worried?

October was a bad month for shares with global shares losing 6.8% in local currency terms and Australian shares losing 6.1%. It’s possible that following top to bottom falls of 9% for global shares, 11% for Australian shares, 21% in emerging markets and even 31% in Chinese shares we have now seen the low in the share market rout...

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What are the 3 biggest living expenses for households?

We check out the three largest contributors to household spending in Australia and where people would source cash if living expenses increased. Find out more with AMP.

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Are shares expensive? | AMP Capital

Some commentators claim shares are way overvalued and so a crash is inevitable...

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The pullback in shares – seven things investors need to keep in mind

Dr Shane Oliver explains what investors should keep in mind.

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The pullback in shares - seven things investors need to keep in mind | AMP Capital

Sharp market falls with headlines screaming that billions of dollars have been wiped off the share market (funny that you never see the same headlines on the way up!) are stressful for investors as no one likes to see the value of their investments decline. However, several things are worth bearing in mind...

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How I became mortgage-free at 35 (and now enjoy financial freedom)

The first strategy is to always pay more than the minimum.

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Successful investing despite 115 million worries and Truth Decay – how to turn down the noise | AMP Capital

A surge in financial information and opinion combined with our inclination to focus on negative news risks making us worse investors: more fearful, more jittery, more reactive, less reflective & more short term. This is potentially harmful to our long-term financial health.

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Seven lessons from the Global Financial Crisis for investors | AMP Capital

The period August to October is a time for anniversaries of financial market crises – the 1929 share crash, the 1974 bear market low, the 1987 share crash, the Emerging market/LTCM crisis in 1998, and of course the worst of the Global Financial Crisis in 2008...

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Money mistakes you make in your 20s

Which of these money mistakes sound all too familiar when it comes to you and your squad? Find out more with AMP.

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Five things you need to know about the Australian economy | AMP Capital

For years now, many have told us that Australia is heading for an imminent recession. By contrast official forecasts have long been looking for several years of above trend growth. In the event neither has happened and we don’t see them happening anytime soon. Against this backdrop there are five things you should know about the Australian economy...

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Investment returns over the next five years are likely to slow | AMP Capital

The past five years have seen pretty good returns for well-diversified investors. While cash and bond returns have been modest, growth assets have been strong. Average balance growth superannuation funds have returned 8.5% pa over the five years to June and that’s after fees and taxes. This is particularly impressive given that inflation has been around 2%.

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Why the $A is likely to fall further and shorting it is good protection against things going wrong globally | AMP Capital

For the last two calendar years the Australian dollar has defied our expectations for weakness. But after hitting $US0.81 in January it’s been trending down as US interest rates fell below the Australian cash rate, the threat of a US-driven trade war increased and it recently broke below a short-term range around $US0.74 and fell as low as $US0.72 on fears of contagion to global growth from a crisis in Turkey.

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More than one-fifth of Australians in their mid 20s still live at home with parents: survey

More than one in five Australian’s in their mid 20s still live at home. Find out why and learn more with AMP.

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Trumponomics and investment markets | AMP Capital

Since Donald Trump was elected President back on November 8, 2016 we have focussed on whether we will see Trump the rabble-rousing populist or Trump the business-friendly pragmatist. Despite lots of noise – particularly via Trump’s frequent tweets – for the most part Trump the pragmatist has dominated so far. But we have clearly seen a swing to Trump the populist this year – raising risks for investors.

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7 money personalities you may identify with or want to avoid

This list of common money personalities could shed light on how you and those around you measure up. Find out more with AMP.

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Lender’s mortgage insurance explained

Find out what lender's mortgage insurance is and how it could affect your home loan and what you pay back. AMP explains in simple terms.

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AMP and the Royal Commission FAQ - AMP

FAQ regarding AMP and the Royal Commission

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AMP grant winner cultivates Australia’s farmers of tomorrow

AMP Tomorrow Maker Sam Marwood and friends are matching retiring farmers with those wanting to work the land but lack the financial means.

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New legislation aims to benefit first home buyers

Eligible first home buyers can now withdraw certain voluntary super contributions to put toward a home deposit. Find out more with AMP.

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New rules to benefit those downsizing for retirement

Aussies aged 65 and over can now top up their super with the proceeds from the sale of their main residence. Learn more about downsizing for retirement with AMP.

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Super investment options – what’s right for you?

Choosing the right super investment options at the right time could make a difference to how much money you have when you retire. Find out more with AMP.

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Affordable school holiday activities

Find out how AMP News&insights readers will be keeping their kids entertained in the school holidays without forking out a bundle of cash. Follow AMP's budget tips for the school holidays.

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Superannuation and separation: Who keeps the money?

If you file for divorce, or separate from your de facto, who gets to keep the superannuation money? Discover more about superannuation and divorce today with AMP.

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Retirement planning – make the most of your money

Retirement planning? Ensure you make the most of your money. Discover how to make every dollar count with these five simple tips. Learn more today with AMP.

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Work expenses - what can you claim on tax?

See what you need to know about claiming work-related expenses and don’t forget to lodge your tax return by 31 October, unless you’re using a tax agent.

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Federal Budget roundup 2018-19

Here’s a roundup of some of the key 2018-19 Federal Budget announcements, and analysis of how the budget proposals might affect you. Learn more with AMP.

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How much super should I have at my age?

How much super should I have at my age? If you’re wondering whether your super is on track, compare it to others your age. Learn more today with AMP.

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Paying bills on time just became more important

With comprehensive credit reporting due to kick off from 1 July 2018, paying your bills on time will become even more important.

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Are you entitled to a tax deduction on personal super contributions?

This financial year is the first time employees can claim a tax deduction for their personal super contributions. Find out more with AMP.

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7 questions to determine how much insurance you might need

Everyone is different, so it’s important to ask yourself the right questions as the cover you require will depend on multiple factors.

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Planning for a (much) longer life

We generally need to make earnings from 40 to 50 years in the workforce extend across what could be 80 to 90 years of living.

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What is the cost of raising a child?

Raising kids can be an expensive business, so make sure you’re informed. What is the cost of raising a child in Australia? Discover more today with AMP.

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Get your new financial year game on

Get your finances sorted for the new financial year AMP gives you tips for getting ready.

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New legislation aims to benefit downsizers and first home buyers

Changes aimed at improving housing affordability have passed through parliament. Find out more with AMP.

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Lessons from the Blue Zones: how to live longer – secrets of a long life

Want to know how to live a longer, healthier life and make your money last? AMP explores what we can learn from the Blue Zones and the secrets of a long life.

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Separating fact from fiction when it comes to superannuation

If you’re wondering whether super is improving retirement outcomes for Australians, AMP takes a look at some of the findings.

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What are the benefits of a split home loan?

If you can’t decide between a fixed or variable rate home loan, a split home loan could provide the best of both worlds. Discover the benefits with AMP.

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The pullback in shares - seven reasons not to be too concerned

The recent share pullback has seen much coverage and generated much concern. Dr Shane Oliver offers seven considerations for investors.

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The pros and cons of investment bonds

Investment bonds (also known as insurance or growth bonds) can be a tax-effective way to invest and save for the future. Find out more with AMP.

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5 steps to take control

Achieving financial independence doesn’t have to be complex. Five commonsense steps could help you enjoy the life you want to lead.

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What is an ethical super fund?

Investing your super in an ethical way is a growing trend in Australia. Learn more about responsible and ethical super investment with AMP.

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Are you eligible for school subsidies?

Get up to speed with the government subsidies you may be able to access before the kids go back to school. Browse by state and territory allowances.

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Australians reveal their priority goals

Most Australians indicate their biggest life goal is a financial one, but many admit failing to plan is a roadblock.

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Will you suffer from post-purchase blues this festive season?

A survey has revealed that around 90% of Aussies make impulse purchases. Find out how you can make your money go further with AMP.

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How to have a budget friendly holiday this summer

Looking for a cheap holiday destination that won’t break the bank? Discover some of the best options both at home and abroad. Learn more today with AMP.

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What do Aussies do with their super?

Find out where and what retirees are investing and spending their superannuation money on, and how you can use your super money today.

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Will Australian house prices crash?

AMP Chief Economist Shane Oliver shares 5 reasons why the Australian property market is more complicated than the crash calls suggest.

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Estate planning: what’s involved?

Estate planning is about more than just making a will. Learn how to make sure you and your money are well looked after later in life.

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How to make every cent count

Are you feeling the pinch? There are a couple of key principles you can follow to help improve your financial situation.

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7 ways to boost your super

Discover the many ways that you can boost your superannuation and reap the rewards in retirement. Learn more with AMP today.

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Don’t want to be retired and in debt?

Find out ways to help you boost your cash flow and avoid debt in retirement.

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More Aussies retiring later in life

Increased life expectancy means more Aussies will need to retire later in life. Find out about the implications of this and the considerations you may need to make.

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5 ways to a longer, healthier, happier life

The best ways to sustain your physical, mental and financial wellbeing are sometimes the simplest. Discover five key tips to happy and healthy ageing.

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What will spring serve up for first home buyers and upgraders?

Find out what lies ahead for the spring property market for first home buyers and upgraders from AMP Capital economist, Diana Mousina.

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5 life insurance questions you’ve always wanted to ask

There are several questions people have about insurance. See what they are and what you can do! – AMP

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Most kids expect to stay at home until they're 30

See why more Aussies are choosing to live with their parents for longer.

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What’s an annuity?

An annuity provides you with a guaranteed income in retirement, regardless of how markets perform. Check out the pros and cons.

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Closing the deal as a first home buyer

You’ve made an offer on your first property, but you’re not home and hosed yet. Find out what you can expect in the final weeks before settlement.

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5 ways to make your gap year attractive to employers

If you’re looking to turn your gap year into something employers will value, check out these five things worth taking note of.

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Should I rent or buy a home?

Don't know whether to rent or buy a home? Check out the latest economic outlook to help you understand the benefits and downsides of both options.

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How much super should I have at my age?

If you’re wondering whether your super is on track, compare it to others your age.

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Should I pay off my student debt early?

Depending on your situation, there may be pros and cons to clearing your student debt before you have to. Here’s what you need to know!

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What is the retirement age in Australia?

Understand the difference between retirement age and preservation age? See how they affect your ability to retire, and the options available to you.

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Your 5-point action plan when faced with redundancy

If you or someone you know has recently been made redundant, check out our 5-point action plan for what to do next.

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The Australian consumer outlook: more headwinds to come

The Australian retail environment remains in a tough position due to factors weighing on consumer demand along with discounting pressures from competitors.

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Beyond the budget

Six things to think about when organising your family finances.

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Childcare is expensive, but not working costs more

The price of childcare may be a deterrent to working, but loss of income, super and other benefits may cost more.

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Top tips when buying a property with your partner

Taking out a mortgage together means commitment and compromise. Find out what you and your partner should consider early on.

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Millions but not all to benefit from 2017 super changes

Many Australians, in particular low-income earners, are set to benefit from the latest superannuation changes. See how new rules could impact you.

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A new financial year - outlook and tips for investors in 2017/18

Is growth still in the forecast for the new financial year? Shane Oliver reveals his predictions

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'Covert violence': The hidden cost of financial abuse

Economic abuse is recognised as a form of domestic violence in many, but not all, Australian states.

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Planning your future