Here’s what you need to know today

Today is Remembrance Day. We want to say thank you to all those who have served and continue to serve. And for all those who gave their lives in service of Australia: Lest we forget

• DroneShield had a confusing day. Shares were up 9% in the morning after it announced it had secured three contracts with the US Government, together worth $7.6 million. Then by midday the company withdrew the announcement, stating these were existing orders that had been reissued. Shares ended the day flat. (Capital Brief)
  
  

• ANZ reported a meek set of results, with profit down 14%. Adjusted for one-off fines and redundancy payments, profit was flat for the year. This follows a similarly lacklustre set of results from NAB last week, suggesting Australia’s big banks are feeling the squeeze from increased competition. (AFR)
  
  

• Australia’s shadow Treasurer Ted O’Brien is asking questions after the Treasury paid $2.3 billion in energy bill subsidies without written approval for the payments from Treasurer Jim Chalmers. Treasury revealed the mistake in its annual report and since corrected the error with Chalmers signing off on the payments. (AFR)
  
  

• More than 1 million people fled their homes in the Philippines as Typhoon Fung brought winds of up to 230km/h. Officials have reported 2 deaths, but as the damage is assessed that number is likely to grow. (ABC)
  
  

• The impacts of US Government shutdown continued to grow. Flight cancellations quadrupled after the government reduced capacity at 40 airports. (Quartz) The US Department of Agriculture ordered states to reverse efforts to issue full food-stamp benefits. (NY Times) White House economic adviser Kevin Hassett said GDP could go negative in the fourth-quarter. (Reuters)
  
  

• As a result of these impacts, US lawmakers are starting the process to end the shutdown. The US Senate voted to end the shutdown, currently at 40 days (the longest in US history), which will now need to be passed by the House and signed by President Trump. (ABC)
  
  

• Britain has announced it will send troops and military equipment to Belgium, after suspected Russian drones breached its airspace and forced flights to halt at Brussels airport. (BBC)
  
  

• Brazil is hosting a subdued COP30 climate summit, with leaders of 4 of the 5 largest emitting countries not attending (China, US, India and Russia). The meeting follows the UN acknowledgement last week that the goal of ‘limiting global warming to 1.5°C above pre-industrial levels’ is no longer achievable. (ABC)

What the…?

Nicolas Sarkozy was President of France from 2007 to 2012. But after being found guilty of illegal campaign finance violations, Sarkozy is spending 5 years in La Santé prison in Paris.  

Spare a thought for the former President’s protection detail. The courts have decided that Sarkozy will keep his 24-hour protection from armed police officers while incarcerated. Meaning these officers will have to protect him in prison. (France 24)

Investing is a lifelong journey

Here’s what you can learn today

The difference between 5% and 8%

This is an extract from the Get Started Investing episode titled ‘Why saving alone won’t make you rich’ (Apple | Spotify | YouTube) 

Ren: Now I think you flag something that people often get tripped up on when it comes to the difference between saving and inflation, which is that when we're talking about a high interest savings account, we do expect a return on that. And so right now in Australia, you're probably getting about 5% from a high interest savings account if you're in the best ones. We actually recently did an episode on the best high interest savings accounts in Australia, but let's say you're getting 5% for your high interest savings account and people might talk about 8% as the long-term expectation for the share market. People will often say, well, I either expects a return, one is 5%, one's 8%, what's really the difference between five and 8%?

Bryce: I'm not going to lose my money in the 5%

Ren: Exactly. The 5% safe. It's government guaranteed. The 8% is risky and I'm not going to really take the risk of losing my money for a few extra percentage points. Well, we're here to say yes, you should.

Bryce: That's it. As we said at the top, the biggest risk is not investing, so let's put some numbers to it. If you were to invest a hundred dollars a week over 30 years, invest or save, you would have invested or saved $156,000. That's what you would've put into it. Not bad at 5%. If it was just sitting in your bank account, you would have $346,000 at the end of that 30 year period thanks to the interest that the bank is paying you. However, to Ren’s point an extra 3%, if you were to invest it into the stock market, if you were to get 8%, you would have $590,000 in your investment portfolio. So a pretty significant difference there.

Ren: Well, yeah. You've almost doubled your money in 30 years, doubled the amount that you would have in 30 years, 346,000 compared to 590,000. Obviously if you extend the timeline even further, the gap gets even bigger. And that example is generous to high interest savings accounts because it doesn't factor in the tax that you're paying every year on the interest that you are earning, whereas investments are more tax effective.

Bryce: Yeah. It's also a bit unfair on the investing side because 8% historically is a little bit below what we would expect from a very long-term average.

Ren: Well, we could say that for the past 124 years of the Australian stock market with dividends reinvested, the number has been 13% a year.

Want to watch the full episode? Check it out on the Get Started Investing YouTube channel

A message from Viola Private Wealth

Wealth isn't one-size-fits-all. Your investment strategy needs to work for your life and not just the markets.

Viola Private Wealth manages over $2.5 billion for Australians with significant wealth, crafting tailored portfolios across public and private markets. With deep expertise and a client-first approach, Viola helps you focus on what matters: growing and protecting your capital with clarity and confidence.

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