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Here’s what you need to know today

• Nvidia has become the world’s first $4 trillion company. The American chipmaker has seen a rapid rise, only reaching a $1 trillion valuation in 2023. (CNBC)
  
  

• The slow trickle of new tariff rates continues. President Trump announced tariffs for 8 more countries, headlined by a threatened 50% tariff on Brazil. Algeria, Sri Lanka and Iraq were threatened with 30%, Brunei, Libya and Moldova were 25% and the Philippines was 20%. (Al Jazeera)
  
  

• Elbridge Colby, the US Defence Department official that is reviewing Australia’s AUKUS submarine deal, is reportedly “pissing off just about everyone”. Australian defence officials believe his review will end with a demand for Australia to increase defence spending or for Australia to guarantee any submarines will be used to back America in a conflict with China. (AFR)
  
  

• South Korean authorities have re-arrested former President Yoon Suk Yeol. Yoon is already on trial for insurrection after a short-lived attempt to impose martial law last year. This fresh arrest came on new criminal charges as prosecutors claimed he could destroy evidence. (BBC)
  
  

• Russia launched its largest aerial attack so far in its war against Ukraine. It fired almost 730 drones and a dozen missiles at its neighbour. This came after US President Trump restarted military aid to America’s embattled ally. (ABC News)
  
  

• Linda Yaccarino has stepped down as CEO of X (formerly Twitter). Yaccarino was brought in by Elon Musk to steady the ship after Musk’s early tenure saw falling users and fleeing advertisers (remember him telling Disney’s Bob Iger to “Go f—- yourself”). Yaccarino did not give a reason for her departure. (BBC)
  
  

• Christian Horner has been fired from Red Bull after 20 years leading the F1 team. Under Horner’s leadership Red Bull won eight Drivers' World Championships and six Constructors' Championships, however the team is struggling this year, sitting fourth. (ABC News)
  
  

• Are you seeing your coffee price rise? Coffee giant Lavazza believes that hedge funds are to blame for 80% of the surge in coffee prices over the past four years. While unseasonably bad weather has led to bad coffee harvests in Brazil and Vietnam, Giuseppe Lavazza, chairman of Lavazza Group, has laid the blame at financial speculation. (AFR)

What the…?

As Tesla continues building out its self-driving capabilities, it has just celebrated a significant milestone. For the first time ever, a Tesla car delivered itself to a customer’s home.

In Austin, Texas, the Model Y SUV made a 30-minute drive from the Gigafactory to the buyer’s apartment. The drive included navigating highways, city traffic and parking. Self-driving cars are no longer hypothetical. And we’re excited to see the technology come to Australia! (Quartz)

Investing is a lifelong journey

Here’s what you can learn today.

Saving for a child’s education

Community Question: How can parents effectively save for their children's education while still prioritising their own retirement?

We put this question to Matt Ingram, financial adviser and partner at Northhaven Financial Management.

As the parent of a child approaching school-age, where to send our son is a common topic between my wife and I. Chatting to friends and colleagues, some of whom have children in public school, some in independent schools, and some being home-schooled, one thing they have in common is that school is expensive.

In fact, the ABC published a report earlier this year, outlining the national average costs for schools in Australia from prep to year 12.

For a public school, you’re looking at over $120,000 when factoring in uniforms, stationary, and some extra-curricular activities. 

For independent schools, the figure was $350,000. 

And for those elite private schools… well they didn’t report on those specifically, but with fees upwards of $50,000 per year in some cases, you’re looking at well over half a million dollars in total. And that’s only for one of your kids.

Whatever your plans are for your kids, thinking ahead so you have options is important. There are many different ways of doing this that work for different people depending on their circumstances, but the most common I see are:

• Investing in a share portfolio in you or your spouses name (generally whoever has the lowest marginal tax rate) that can be used to supplement school fees when the time comes.

• Keeping cash in the offset account to achieve a tax-free return equivalent to your mortgage rate, which can also be used to supplement school frees when the time comes.

• Investing in an education bond, which is a separate structure in which tax on earnings is paid at no more than 30% and can therefore be a good option if your marginal tax rate is higher than that. These allow you to draw on earnings and receive an Education Tax Benefit if used towards education-related expenses.

• Some even take the approach of investing heavily into themselves or their business to ensure that when the time comes, their income is sufficient to cover school expenses.

With each of these examples, you can still continue to make superannuation guarantee contributions and build your own assets to ensure your retirement is secure. Starting early and having a plan is the key to making sure your child’s education expenses don’t impact your own wealth-building objectives.

Interested in speaking to Matt or another of our hand-picked financial advisers? Fill out the form on our website and we’ll match you with a suitable financial adviser.

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