Here’s what you need to know today

• Australia’s latest GDP figures show Australia’s economy in the December quarter grew at its fastest rate in two years. The economy grew 0.6% for the quarter and 1.3% for the year. Most pleasingly, GDP per capita grew 0.1% in the quarter, reversing a trend of seven consecutive quarterly declines in per person economic growth. (AFR)
  
  

• The Big Tech platforms are engaged in a lobbying war in Australia over the government’s ban on users under 16 years old. The fact that YouTube was carved out of the ban has seen lobbyists from TikTok, Snap and Meta (owner of Instagram and Facebook) making their case in Parliament and in the press that YouTube should be included in the government’s ban. (Capital Brief)
  
  

• The US instituted President Trump’s 25% tariffs on goods entering the US from Canada and Mexico. The government also doubled the tariffs on goods entering the US from China, raising the tariff to 20%. (Reuters)
  
  

• All 3 countries responded. Canada implemented a 25% retaliatory tariff on US goods entering Canada, China levied tariffs of up to 15% on US agricultural goods and Mexico has said their would announce their response on Sunday. (The Guardian)
  
  

• Canada’s Prime Minister Justin Trudeau has said that Trump wants the “total collapse” of the Canadian economy as it would make it easier for the US to annex its neighbour to the north. The US and Canada have had some low ebbs in their relationship (War of 1812) but in modern history this is a particularly low point. (Quartz)
  
  

• Virgin Australia has announced its new CEO, Dave Emerson. The former consultant was a senior partner of Bain & Co, the sister company to Virgin-owner Bain Capital, and is expected to shepherd Virgin Australia back to listing on the ASX. (AFR)
  
  

• Two ports near the Panama Canal are being sold. Hong Kong’s CK Hutchinson will sell them to America’s BlackRock for US$19 billion. This is seen as a win for President Trump, who has complained about Chinese influence over the critical shipping lane since coming into office. (AFR)
  
  

• President of the European Commission, Ursula von der Leyen, has proposed an €800 billion ReArm Europe package. The principle underpinning the plan is to ‘pool demand and buy together’. EU leaders will discuss the proposal at an emergency summit this week. (Reuters)
  
  

• Australia’s Greens party have proposed a federal prices commission that would work alongside the Australian Competition and Consumer Commission (ACCC) with a particular mandate to investigate price gouging. (Capital Brief)

What the…?

Over half of the world’s adults are expected to be overweight by 2050. A new study published in The Lancet has found that 57% of men and 60% of women may be overweight or obese in 25 years. And that is factoring the influence and broader availability of GLP-1 weight-loss drugs like Ozempic.

Even more worrying, the study found that one-in-three young people aged between 5 and 24 would be overweight or obese. (Quartz)

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Investing is a lifelong journey

Here’s what you can learn today.

The power of investing early

This is an excerpt from our book Don’t Stress, Just Invest. In it we outline the absolute simplest way to invest and why, for us, it is enough. Pick it up on Amazon or wherever you buy books.

Money makes money. Or, as Benjamin Franklin famously said, ‘Money makes money. And the money that money makes, makes money.’

That is compounding in a nutshell and that is why time beats better returns. Compounding is so powerful because the money that you make in year one then earns a return in year two. And then in year three, you’re earning a return on your initial investment, plus what you made in year one and what you made in year two.

Warren Buffett, 81 years into his investment career, is riding the force of 80 years of previous investment returns. His money is making money.

The power of starting early is best demonstrated by showing how hard it is to play catch up.

Let’s say you were saving and investing $100 a month in your twenties. But then, for whatever reason, you stop (hey, life gets expensive). In your twenties you’ve invested $12,000 and then you never invest another cent. That original $12,000 is left to compound away at 8% a year. Without investing another cent, by the time you’re 60, you’d have more than $200,000. By the time you’re 80, you’d have over $980,000. All from that initial $12,000 in your twenties.

Now let’s say your friend waited, and only started investing in their thirties. If they invested that $100 a month for the rest of their working life they would invest $60,000. But when they check their portfolio as they stop working at age 80, they would have $800,000. They invested five times more money but ended up with a 15% smaller portfolio.

Realistically, if you start investing in your twenties, you’re not going to stop at age 30 and never invest again. You might take some time out of the workforce to have a family, or stop investing as you save for a house or a wedding. But you will be able to return to it again in the future having already built a strong financial base when you were young.

Today’s sponsor is Scouting Australia Podcast

Join Sam Gordon, Equity Mates’ regular property expert, as he is joined in the studio by some of the APS Team to tackle the age old debate, ‘Rent Money is Dead Money’.

It's a phrase we hear all the time. Often by parents urging their kids to buy a home instead of rent, but the team instead discuss exploring more intelligent investing strategies. In today’s ever-evolving property market, does this traditional mindset still hold up?

Tune in to this educational episode on the Scouting Australia Podcast on all your favourite listening platforms.

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