This week has seen the press report that Avatar has become the highest grossing movie of all time. What does this really mean? I know that GEN X people around my age would argue that the Star Wars Trilogy, E.T and the Indiana Jones films were at least as big as Avatar. Baby Boomers would add Gone with the Wind, Ben Hur and Dr Zhivago for a start.

So as a Financial Adviser I felt this would be a good chance to show the power of inflation on money and the effect of compound interest or in this case compound inflation. As we all know, the value of $100 today is not the same as $100 in 1980. What would it be worth now if inflation had been 3.5% for the past 30 years? It would be worth $280.68 !

If you invested the same $100 with a 7% return it would grow to $761.22  

So this illustrates clearly that if you can invest (and not touch) your money it will grow substantially over time. HOWEVER inflation and the cost of living grow over time too, so make sure your investments are earnings significantly more than inflation.

If you want to find out what your investments could be worth contact us

Box Office Hits, Adjusted for Inflation
Avatar might be the highest grossing film of all time, but ticket prices are also at an all-time high. Adjusted for inflation, Avatar is only #26, just behind Grease, Mary Poppins, and Snow White.

Could it be true?

There is nothing like a lack of money to help bring families closer together and appreciate the basics of life more.
Newcastle has not been immune to the GFC nor have financial advisers!

I found the results of the study interesting and was pleased to read that GEN Yers were the generation that made the biggest change to their lifestyle.

GEN Xers would counter by saying that their credit card ways were a large contributor to the GFC !!!

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What time is it?

Knowing what to invest in is difficult at the best of times. There is so much information in the media, that often it seems to be conflicting.

A tool called, ‘The Economic Clock’ has been around for a long while and is based on the assertion that the economies of most developed countries move in a regular pattern known as the ‘boom & bust’ cycle.

The economic clock is a composite of individual economic indicators such as interest rates, employment real estate and the share market. The economic clock depicts the sequence of events in an economic cycle that influence the value of the asset classes.

Each event in the cycle tends to be the result of the proceeding economic condition.

While the clock is not fool proof, it does demonstrate indicators to watch out for.

How has the ‘clock’ played out in real life?

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