Getting Started

Behavioural finance: Money illusion

Money illusion describes the tendency of people to think about money in nominal rather than in real or inflation-adjusted terms. In other words, it’s when people focus on the absolute amount of money rather than what that money can buy. The concept of money illusion was first discussed by Irving Fisher and later popularised by…

Company directors can be held legally liable for ignoring the risks from climate change

Company directors who don’t properly consider climate related risks could be liable for breaching their duty of due care and diligence, a new legal opinion has found. Although the alarm for business leaders has been sounding for some time, the release of the opinion by senior barristers and leading solicitors confirms the potential liability for…

Cracking the happiness code

Imagine holding in your hand a winning lottery ticket of $1 million. This is the ticket that will empower you to live out your dreams. You will be able to buy and do whatever you please. Life will be happy forever after. Or not? The quest for happiness reminds me of that song, “Somewhere Over…

The problems with relying on the bank of mum and dad

Mamiza Haq, The University of Queensland Ask a parent how far they would go to support the financial aspirations of their children, and chances are they will say: “Yes, if I had the money I would be happy to act as a guarantor for my children to purchase a property.” Australian capital city house prices…

Bond yields and what they tell us about the economy

Sarantis Tsiaplias, University of Melbourne When the Australian Office of Financial Management borrowed A$4.25 billion for 20 years at an interest rate of just 2.865% this week, economic commentator Peter Martin called it “the deal of the century”. Governments issue bonds to raise funds to pay for general expenses and projects such as the stgelopment…

Who owns the zebra?

In the early 1960s in the US, everyone was trying to find out who owned the zebra. Without much luck. A logic puzzle that only a small percentage of the population are able to solve, we have reproduced a version of the infamous “Who owns the zebra?” problem here. Note that there’s more than one…

There’s more to personality than a test score

By Luke Smillie, University of Melbourne Have you ever completed a personality test and felt dissatisfied with your scores? Maybe you’ve quibbled with the low score you received on extroversion – a personality trait reflecting outgoing and gregarious behaviour. Well, fine, you’re not a party animal, but when you are out with your friends you…

Working against the clock

By New Philosopher The office man runs his ‘security pass’ through the turnstiles of the corporate building and clocks on for the day; his presence is recorded at 8.24am on a Monday. At 9.43am, he exits the building to grab a coffee, passing through the turnstiles again, swiping his security pass across the sensor and…

The B20 summit: where cashed-up lobbyists meet to write trade rules

By Remy Davison, Monash University The Business 20 (B20) summit typically attracts the global corporate glitterati, as the usual suspects assemble in alpine retreats like Davos; cinema-infused beach towns like Cannes; or sunny Mexican resorts, such as Los Cabos. Except this year. The G20 will meet in Brisbane. Yes, Brisbane. It’s no surprise, then, that…

‘Thrill investments’: excitement with high risk

By Wealth Foundations It’s a reasonably regular occurrence for our clients to be offered the chance to participate in “fantastic”, once-off, investment opportunities, that offer large potential upside, by people they know and trust. And most of these people are genuine in their belief that they are doing our clients a favour. When we are…