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• The US-China trade war has taken on a strange new dimension, with TikTok being flooded with videos from Chinese influencers and Chinese factories. The videos are making fun of Trump and MAGA and also ‘exposing’ how consumer goods are made while encouraging westerners to buy directly from Chinese factories. (AFR)
  
  

• Boeing stock fell 2% after reports surfaced that Chinese airlines have been ordered not to accept any more deliveries from the American plane manufacturer. Given Boeing’s order backlog is more than 11 years worth of planes, we’re not sure this is the power move that Chinese authorities may think it is. (Quartz)
  
  

• Rio Tinto has flagged a $150 million impairment after wild weather in the Pilbara has led to Rio’s weakest start to a year in a decade. The Pilbara was hit by four storms in January and February, which have affected Rio more than its rivals, and stopped the company shipping 13 million tonnes of iron ore. Rio was able to ship 70.7 million tonnes in the March quarter, down 14% year-on-year. (AFR)
  
  

• BHP has received approval to close down NSW’s largest thermal coal mine in 2030, earlier than planned, ending more than 60 years of coal mining at Mount Arthur, near Muswellbrook. BHP has shared its ambition to turn the mine into a pumped-hydro site to store renewable energy. (AFR)
  
  

• Buy Now, Pay Later stock Zip jumped 16% in a day after it upgraded its full-year earnings guidance and reported quarterly revenue up 26%. The US arm of the business has been a particularly good story, with revenue up more than 40% year-on-year. (Capital Brief)
  
  

• Star Entertainment is back on the share market. The Australian casino giant now has a new controlling shareholder, America’s Bally’s Corporation, and saw shares drop 9% as trading resumed before recovering throughout the day. (Yahoo Finance)
  
  

• China’s economic growth surpassed expectations in the first quarter, with GDP growing 5.4% in the March quarter. This measures a time period before the US and China started ratcheting up tariffs, starting with Trump's ‘Liberation Day’ on 2 April. (CNBC)
  
  

• Harvard University appears to be the first institution to stand up to President Trump. After Harvard refused the White House’s requests to control curriculum and monitor students, the Trump Administration announced it would freeze $2.2 billion in federal funds for the university. When Harvard responded by challenging the legality of that freeze, President Trump suggested Harvard could lose its tax-exempt status. (SBS News)
  
  

• Meanwhile globally, the Trump Administration and White House has blocked a statement by the G7 condemning Russia’s deadly strike on the Ukrainian town of Sumy that killed 35 people. (Bloomberg)

What the…?

Over the years there have been some stupid social media challenges. The Tide Pod challenge saw people eating laundry detergent in 2018. The Cinnamon challenge had people eating a spoonful of ground cinnamon without drinking anything. But the latest challenge may take the cake: #droppingthingsonmyfeet.

The trends has users dropping progressively heavy objects on their feet and then ranking how painful each item is. (The Herald)

Investing is a lifelong journey

Here’s what you can learn today.

Add to offset or invest in stocks?

This is an excerpt from our Get Started Investing episode titled ‘How to save thousands and wipe out your mortgage’ (Apple | Spotify | YouTube)

Bryce: So the main thing to consider with the offset account is that it is an after tax benefit. 

Let’s say your home loan interest rate is 6%. You're saving paying interest to the tune of 6% or effectively getting an after tax return of 6%. You then need to compare that to what you would expect to get in the stock market to decide what is better. Now, there is a bit of a formula here to find out how to do that. They suggest taking your home loan rate, adding your marginal tax rate, which will give you what the expected return should be for you to put money in the stock market rather than your offset.

Let's take 6%, a marginal tax rate of 30% is about an 8% return that you need to get. The reason you do that is because obviously when you're investing, you then need to consider the tax that you're going to pay on the returns from the investment. So you need to be able to compare apples-with-apples.

Ren: 7.8%, the stock market has historically returned more than that. Obviously the tax brackets go up and 30% might not be the right number if you're paying off a mortgage and you've got money to invest. And if you're in that circumstance in life, you might be adding 37%, you might be adding 45%. So then the return rates get higher.

Bryce: Yes. And also I think that you need to consider the time horizon here because obviously that the stock market return on average is over a long period of time. You shouldn't be expecting that literally every year, year-on-year.

Ren: You’re paying off your mortgage over a long period of time too…

Bryce: Well. I know, but in my view, you can have an outsized return earlier on, getting into your offset account.

Ren: So I think that's one way to think about it. It's the mathematical version. It's expected return. There's no perfect answer because unfortunately the expected return is a forecast….We don't know what the stock market will do over the next however many years. 

There's also then an overlay that needs to come onto it, which is what your personal circumstances and your goals are. And I think with these two assets [offset and an investment portfolio] the way you build wealth and the choices that give you, are different. If someone wants to get to retirement as quickly as possible, you don't want to have a mortgage hanging over you in retirement. Mortgage payments would really eat up your super balance or you might have to work for longer to keep affording that mortgage. So in that case, you're probably thinking about getting out from under the mortgage as quickly as possible. And in that case, the offset can be really powerful. 

All Get Started Investing episodes are available to watch in full on its very own YouTube channel. Make sure you subscribe so you don’t miss a future episode.

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