This week on Equity Mates

Hey there Equity Mate,

Australia’s tech sector has only had a handful of truly global success stories. Two that stand above the rest (at least in terms of how much they’ve generated for Australia’s VC community) are Canva and Atlassian.

Atlassian was a company ahead of its time in many ways, pioneering a product-led growth strategy that is now the norm for many tech giants. And we got the news on Friday that one of Atlassian’s co-founders, Scott Farquhar, is stepping down.

Scott will forever be one of the giants of Australia’s tech sector, and at just 44 years old (and with a net worth of $12.5bn USD) we can’t wait to see what he does next. We’re hoping it involves jumping on Equity Mates for an interview.

While we wait for Scott to get back to our emails, there’s still plenty happening across Equity Mates and Get started Investing.

This week it includes one of our biggest guests ever: Professor Scott Galloway (aka Prof G). Make sure you’re subscribed so you don’t miss it!

Equity Mates Investing (Spotify | Apple | YouTube)

• Monday - Why companies die but indexes are forever, Pimp my portfolio & ETF overlap

• Tuesday - Expert: Professor Scott Galloway - The formula for building wealth

• Thursday - Lessons on valuation, Pimp my portfolio & is the stock market predictable long term?

• Friday - Uncovered: Sparc Technologies - 3 big decarbonisation bets

Get Started Investing (Spotify | Apple | YouTube)

• Tuesday - Emma Edwards: When are you good with money?

Your questions, answered

asked via Instagram:
“My parents are approaching retirement. What should they do and be thinking about?”

We put A.J’s question to Dylan Pargiter-Green, from Bold Wealth.

Book a call with Dylan for professional investment advice.

Retire ready

Retirement can be daunting for many people, moving from regularly receiving income to having to support yourself using assets you’ve worked hard to build throughout your life. The critical thing to think about is - how much do I want to live off each month and do I have enough to do this? And further, does this include the larger items such as holidays, new cars, gifts and legacy.

Understanding your financial position pre-retirement can be very daunting, but it doesn’t have to be. A simple financial plan can set up your income for life, establishing income streams, forecasting your capacity to draw inflation adjusted returns to or beyond your life expectancy.

A few key principles to consider are:

• Where are my assets currently and should I be moving them into a tax effective income environment

• Is there any age pension or social security benefits available to me? Or could there be?

• Can I make use of guaranteed income streams such as annuities or lifetime income accounts to insure my income is more stable

• Am I considering leaving behind assets to my kids/beneficiaries and how does this affect my capacity to draw the income I need?

• What are the longer term consequences should I need care in my later years

Pre-retirement is the most important time to seek advice if your parents have not already. The last 10 years of our working life are the most critical as the decisions we make on our assets at this stage have more immediate impact than ever before. You never know, they may be able to retire sooner than expected.

If you have a question you’d like answered, hit us up at [email protected] 

This email is thanks to PocketSmith

Ren’s had a general frustration for a while with spend trackers - most have predefined categories, annoying automation that miscategorise transactions and no distinction between spending and investing.

So when we were asked to give PocketSmith a go, we were skeptical.

But we’ve been pleasantly surprised - finally a budget tool that has the flexibility and detail to give you true insight into your spending habits.

PocketSmith is Australia’s leading personal finance management tool. You can find out anything you need about your money: track progress, identify trends, spot issues, run reports, and plan ahead. You can also connect with Sharesight and your superannuation provider to track your overall net wealth.

If you’d like to manage your money like a pro, PocketSmith has a special deal for the Equity Mates community. Get 50% off your first two months of PocketSmith’s Foundation plan.

What we’ve been reading

Saudi Arabia's Sci-Fi Megacity in the Desert Isn't Going Well

One of the more ambitious engineering projects of recent times isn’t going too well. Saudi Arabia’s Neom, otherwise called The Line, was intended to be a 170 kilometre long city that would run along the coast of the Red Sea. It was intended to be one of Crown Prince Mohammed bin Salman’s crowning achievements and was projected to house up to 9 million people by 2030.

To hear more about Saudi Arabia’s ambition for the project, you can listen to our episode of The Dive covering it:

Fast forward a few years and things aren’t going too well for the Saudis. Bloomberg reported that officials now only expect to complete 2.4km of the city by 2030 (98% less than previously planned) and now only expect 300,000 people living there by 2030.

Alphabet (GOOGL) & Microsoft (MSFT) Earnings Reviews

It is earnings season in the United States, and we are learning how American companies have fared in the January-March quarter of 2024. This article takes a deep dive into two companies in most investors’ portfolios - Alphabet and Microsoft - who both reported incredible quarters.

There’s plenty of interesting information contained in this article, but for us, the most illuminating was how the big tech companies are finding ways to monetise artificial intelligence.

For Microsoft, one example is through GitHub, the code repository database that is used by 90% of Fortune 100 companies. Microsoft have created a GitHub Copilot, an automated coding subscription powered by AI. In the past quarter, subscriptions grew 35%.

For Alphabet, one example is through their ads manager. Advertisers can use Google’s AI to help generate advertising assets, and this leads to a 6% boost in conversion. And if advertisers simply allow Google’s AI to automatically create and optimise the campaign, that leads to another 5% increase in conversion.

There has always been a question about just how big these big tech companies can get. With AI, it seems the next leg of their growth is laid out before them. The only question for us as investors, is which company will do best and capture the most market share.