Three Men Walk Into A Bar... Blog article
SHARING IS CARING
The new $10 note will enter circulation tomorrow. Love it or hate it, the launch got us thinking… What can you get for $10 now compared to the last issue of the note?
Our story starts on 1 November 1993, the day the first polymer $10 note was issued.
Pam had rushed down to the bank and gifted each of her nephews a shiny note, advising them to save it until it became out of date. The brothers made a pact to catch up when that day came.
Almost twenty four years later, three men walk into a bar…
The eldest and most conservative brother had opted for the safety of his piggy bank. As the brothers approached the bar he was quick to hand over the immaculate note. The barman uncapped a single bottle of pale ale and handed back 50 cents in change. Disappointed, he tossed the coin into the tip jar. Back in 1993 when they received their brand new $10 notes, a stubbie would have cost around $3. Fast forward to 2017 and he couldn’t buy a round.
"No worries," said the middle brother reaching into his pocket and pulling out $26. Understanding the power of compounding interest, he’d parked his tenner in a savings account earning an average interest rate of 4% over the period. He’d always believed he was the smartest brother and the evidence seemed clear as the barman placed two more beers and a bowl of chips on the bar.
The youngest sibling then opened his wallet and proudly tipped $68 on to the bar. His siblings were shocked. This boss baby had realised he had time on his side so had taken a more strategic approach. He’d invested his $10 in a high growth managed fund with an average return of 8% over the same time. As his brothers had already managed to buy them each a drink with their combined funds, he decided against buying another seven and stuffed his cash back into his pocket to reinvest for another twenty four years - at which point it will be worth $461 based on the same return!
Moral of the story - when you get your first new $10 note, we suggest you either spend it quickly to get the full value or better yet, invest it wisely. Twenty four years from now you’ll be lucky to get a single pot of beer in a bar with it!
With standard bank account interest rates now almost non-existent, inflation is eating into your cash. We cannot stress the importance of protecting your savings and super from the effects of inflation enough.
If you’d like to find out more about your options for saving and investing your funds please get in contact with us here.
To learn more about your attitude to risk & return, see our simple infographic here
While the existing series of banknotes will be progressively withdrawn from circulation, they will retain their legal tender status and can continue to be used.
The new $50 banknote is expected to enter circulation in late 2018. The remaining denominations in the series will be introduced in subsequent years.
There is a common misconception that your borrowing capability is related solely to your income, however most people’s outgoings quickly follow their increasing pay-packets. In a time where many people’s lifestyles revolve around instant gratification, lenders are now taking a more responsible approach to lending and investigate genuine spending habits as well as factoring in possible future interest rate rises.READ MORE >
Unpaid insurance claims have been big news recently, highlighting why it's so important to have your personal policies reviewed by a licenced adviser regularly...READ MORE >
It’s been a big 12 months for Australian economics, the Government and the Reserve Bank of Australia (RBA). Australian growth forecasts are continually being revised downwards, and this looks like it will continue as things are not improving.READ MORE >