Here’s what you need to know today

• Australia’s consumer price index held steady at 2.5% for the 12 months to January 2025. Meanwhile, underlying inflation rose slightly from 2.7% to 2.8%. The good news? Both headline inflation and underlying inflation are within the RBA’s 2-3% target band. The bad news? Underlying inflation ticked up slightly. (ABC News)
  
  

• America’s Big Tech stocks have reached correction territory (down more than 10%). Bloomberg’s Magnificent 7 index is down 10% since its 17 December peak. Tesla is the biggest faller of the seven, down 37%, while Amazon, Microsoft and Alphabet are all down at least 10%. Meta is the only riser amongst the seven, up 5%. (Bloomberg)
  
  

• WiseTech founder Richard White has returned to the company’s board as Executive Chairman. This move comes 4 months after he stepped down as CEO over allegations around his personal behaviour and comes just a few days after 4 of WiseTech’s independent directors resigned from the Board. (AFR)
  
  

• Federal Opposition Leader Peter Dutton has defended attacks on his personal finances, saying he’s unapologetic he’s been “successful in business”. The attacks have centred on Dutton’s personal property portfolio as well as the timing of his purchases of shares in Australia’s Big Banks one day before a bailout was announced during the GFC. (ABC News)
  
  

• Bitcoin has fallen below $90,000 USD, reaching its lowest level since 18 November 2024. The ‘blue chip’ cryptocurrency is down 16% in the past month. (CNBC)
  
  

• The World Health Organisation is monitoring an “unknown disease” that first emerged in January after three children developed fatal symptoms after consuming a bat carcass. So far the disease has infected 431 people and killed 53. (NY Times)
  
  

• As Europe questions its trans-Atlantic alliance, it is upping its own defence spending. British Prime Minister Sir Keir Starmer has pledged to raise defence spending to 2.5% of GDP by 2027, with an aim of eventually reaching 3%. At the same time, French President Emmanuel Macron continues to discuss European nations sending peacekeepers to Ukraine. (Sky News)
  
  

• Taiwan’s coastguard detained a crew of a Chinese cargo ship that they believe cut an undersea internet cable. This is the 5th instance of sea cable malfunction reported by Taiwan this year. (CNN)
  
  

• 21 staffers of Elon Musk’s Department of Government Efficiency (DOGE) have quit in protest claiming their skills were being used to “dismantle critical public services”. (NBC News)

What the…?

We are entering the era of AI-content. The technology has crossed the uncanny valley and it is getting more difficult for humans to tell the difference. One example is True Crime Case Files, an true crime YouTube channel that was racking up millions of views, where all the stories are fake and AI-generated.

These accounts seem harmless, but had a real world impact where one AI-generated story set in Denver, Colorado had scores of locals believing the story, forcing the local paper, The Denver Post, to try and correct the record. (404 Media | Denver Post)

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Investing is a lifelong journey

Here’s what you can learn today.

The biggest risk is not investing

This is an excerpt from our first book Get Started Investing, available on Amazon or wherever you buy books. It is also available as an audiobook wherever you listen.

The stock market is often seen as a big risk. Many people have heard stories of the major market crashes throughout history—the 1929 Great Depression, the 2000 Tech Wreck, the 2008 Global Financial Crisis (GFC). We’ve also heard the stories of individual companies collapsing and investors losing all their money—Enron and Lehman Brothers in America, Ansett Australia and Dick Smith Electronics in Australia. In 2020, many notable companies collapsed during the Covid-19 pandemic, including Australian airline Virgin Australia and global car rental giant Hertz.

These stories make us concerned that we’ll lose our hard-earned money. We don’t want to be working long hours at our 9–5 job, only to see savings lost by a risky stock market investment. Instead, we choose to save our money in the bank. Saving and saving. Focusing on cutting our expenses, and saving our way to a comfortable retirement. 

Unfortunately, saving your money in the bank can be a bigger risk. Your money can actually lose value over time. This introduces the first piece of jargon that you need to understand: inflation. In Australia, between 1951 and 2020, prices have risen an average of 4.9% every year. This means every year your $1 buys 4.9% less in goods and services. Or in practical terms, if you’re stashing all your cash under your mattress and not earning any interest, $100 could buy you 100 litres of milk when it was $1 a litre. As prices increase and milk goes to $1.10 a litre, that $100 buys only 90 litres of milk. The same amount of money buys less.

Think about the stories your grandparents would tell you about buying a meat pie for 10 cents. Now you’ll be lucky to get one for $4. That’s inflation.

At the very least, you want your savings to keep up with inflation. If prices inflate at 1% in a year, you need to earn at least 1% interest just to buy the same amount of stuff. Unfortunately, most bank savings accounts these days pay less than the historical average for inflation.

Forget what you’ve heard—cash is not king.

You may be thinking, ‘So what? As long as I’ve got a job and am earning a salary, I’ll be okay.’ Unfortunately, this becomes a problem in retirement. Most Australians—60%—run out of money before they die, and the average Australian outlives their retirement savings by five years. Making your money work for you while you’re young is the best way to ensure you’ll have the retirement you want.

While saving your money in a bank or under your mattress may feel like the least risk, it may be the riskiest option for your future self.

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