If you’re new to investing, and to be honest even if you’re not, exchange traded funds (ETFs) are an excellent way to invest the way you want to, without the risk and effort involved in picking individual stocks.

ETFs invest in many ways: by theme, commodity, sector, and across entire share market indices.

There are literally hundreds of ETFs on offer, but for a start, let’s look at four which provide broad diversification rather than focusing in on any one theme.

Betashares Diversified All Growth ETF (ASX: DHHF)

As the name suggests, this ETF is aiming for high growth, which, as Betashares say on their website, “may suit investors with a high tolerance for risk”.

While other ETFs might focus in on one share index, DHHF casts its net broadly.

As Betashares says:

The Fund is invested in a blend of large, mid and small cap equities from Australia, global developed and emerging markets, offering investors exposure to an ‘all-cap, all-world’ share portfolio with the potential for high growth over the long term. The ETF provides exposure to approximately 8,000 equity securities listed on over 60 global exchanges, in one ASX trade.

DHHF ETF is invested 37% in Australian equities and 63% international.

It has delivered a return of 12.9% over the past year and 10.69% per year over five years.

Betashares Wealth Builder Diversified All Growth Geared (30-40% LVR) Complex ETF (ASX: GHHF)

This ETF invests across Australian and global equities, but does so using gearing to deliver hopefully stronger returns.

The fund’s gearing ratio, “being the total amount borrowed expressed as a percentage of the total assets of the fund”, generally varies between 30% and 40%.

Betashares adds:

Gearing magnifies gains and losses and may not be a suitable strategy for all investors. Investors in geared strategies should be willing to accept higher levels of investment volatility and potentially large moves (both up and down) in the value of their investment. Geared investments involve significantly higher risk than non-geared investments.

The ETF provides exposure to more than 4000 equities.

It has delivered a return of 20.74% over the past year and 21.41% per year since inception in April 2024.

Vanguard Australian Shares Index ETF (ASX: VAS)

If index trackers are more your thing, here are two which fit together nicely in terms of diversification.

Vanguard says VAS is Australia’s largest ETF, giving investors exposure to the top 300 companies listed on the ASX.

It has a very low management fee of 0.07%, and investors can start off with as little as $200 if they invest through Vanguard itself.

Vanguard says:

The ETF provides low-cost, broadly diversified exposure to Australian companies and property trusts listed on the Australian Securities Exchange. It also offers potential long-term capital growth along with dividend income and franking credits.

Unsurprisingly, VAS’ top five investments are the big four banks and BHP Group Ltd (ASX: BHP).

Vanguard says $10,000 invested five years ago would now be worth $14,639.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Finally, VGS ETF has a much wider remit than VAS, with exposure to about 1300 companies from developed countries, notably excluding Australia so it doesn’t double up with VAS.

Vanguard says on its website:

Investing internationally offers greater access to sectors such as technology and health care that aren’t as well represented in the Australian share market. The ETF provides exposure to many of the world’s largest companies listed in major developed countries. It offers low-cost access to a broadly diversified range of securities that allows investors to participate in the long-term growth potential of international economies outside Australia.

The ETF’s largest holdings are in US tech companies including Nvidia, Apple, and Microsoft.

Vanguard said $10,000 invested five years ago would now be worth $19,057.

The management fee for VGS ETF is 0.18%.

The post New to ASX ETFs? These 4 products could be a good start appeared first on The Motley Fool Australia.

More reading

• What $500 a month in ASX ETFs looks like in 10 years
• Are BHP shares a good buy for passive income?
• 5 ASX ETFs for beginners with $500
• Why is the BHP share price so volatile this week?
• Time to cash out? Why this expert is bearish on Goodman and BHP shares

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I had $2,500 to invest in Betashares exchange-traded funds (ETFs), I would want a mix of growth, quality, and long-term relevance.

I would also want exposure to themes that can stay important for years, rather than funds built only around short-term market excitement.

Three Betashares ETFs I would consider are named in this article.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The first ETF I would buy is the Betashares Nasdaq 100 ETF.

This fund gives investors exposure to many of the largest companies listed on the Nasdaq exchange. That means it has a strong tilt toward technology, digital platforms, software, semiconductors, cloud computing, artificial intelligence (AI), and consumer internet businesses.

I like the NDQ ETF because it owns the companies that are shaping how the world works, shops, communicates, advertises, automates, and stores data.

There are risks. The Nasdaq can be volatile, and many of its biggest holdings can trade on high expectations. But if I were investing with a long-term mindset, I would want some exposure to this group of stocks.

Betashares Australian Quality ETF (ASX: AQLT)

The second ETF I would consider is the Betashares Australian Quality ETF.

I like this fund because it takes a more selective approach to the Australian share market.

Instead of simply buying the largest companies, the AQLT ETF focuses on Australian businesses with quality characteristics. That can include strong profitability, balance sheet strength, and earnings stability.

I think that is useful because the local market can be uneven. Some Australian shares are highly cyclical, some rely heavily on commodity prices, and some are more exposed to interest rates or credit cycles.

A quality filter can help investors focus on businesses with stronger financial foundations.

I think this ETF could work well alongside a global growth fund because it adds local exposure without simply copying a broad ASX index. It may still hold familiar Australian names, but the strategy is built around quality rather than size alone.

Betashares Global Defence ETF (ASX: ARMR)

The third ETF I would buy is the Betashares Global Defence ETF.

I like ARMR because it gives investors a way to access the defence theme without relying on one contractor, one product cycle, or one government contract.

That is useful because defence is a broad market. It can include aircraft systems, shipbuilding, surveillance technology, missiles, electronics, cybersecurity, communications, and battlefield software. The winners may not all come from the same part of the industry.

There are clear risks. Defence spending can be political, valuations can rise quickly when the theme becomes popular, and some investors may not be comfortable with the sector. But for those who are, I think ARMR gives a cleaner way to invest in the theme than trying to pick a single ASX defence stock.

Foolish Takeaway

If I were investing $2,500 into Betashares ETFs, I would focus on funds that give exposure to durable long-term trends.

I like the idea of combining broad global growth, quality Australian companies, and a theme that governments may keep prioritising over time. That mix would not suit every investor, and thematic ETFs can be volatile.

But for someone looking to put money to work across different sources of long-term growth, I think these three Betashares ETFs could be compelling options.

The post 3 Betashares ETFs that I’d buy with $2,500 appeared first on The Motley Fool Australia.

More reading

• 2 top ASX shares to buy and hold for the next decade
• 5 ASX ETFs for beginners with $500
• SpaceX starts trading today. Here’s what ASX investors need to know
• 3 ASX ETFs for investors who want global winners
• Which ASX ETF should I buy?

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I think it’s always a good idea to look at ideas that can outperform the ASX share market. Fund managers have highlighted one particular small ASX share that could be a compelling buy: Kogan.com Ltd (ASX: KGN).

The investment team from the listed investment company (LIC) WAM Microcap Ltd (ASX: WMI) believe the online retailer is one of the most exciting and undervalued growth opportunities in the Australian microcap market.

At the end of May, Kogan.com was one of the largest 20 positions in the WAM Microcap portfolio. Let’s take a look at why it’s so appealing to the experts from Wilson Asset Management.

Ongoing growth for the ASX share

WAM noted that in May, the business released a business update for the 10 months to 30 April 2026, which demonstrated continued sales growth in the core Kogan.com business and improved operating leverage.

The fund manager said that Mighty Ape, the New Zealand-based online retailer acquired by Kogan in 2020, has made significant progress to profitability through strategic shifts and the progressive implementation of the Kogan operating model across the business.

In the four months to 30 April 2026, Mighty Ape’s gross profit margin improved by 8.4% to 37.8%, while the adjusted operating profit (EBITDA) losses reduced by 52.8% compared to the prior corresponding period.

For the overall business, the ASX share reported gross sales growth of 13.2% to $875.6 million, driven by 18.2% growth in Kogan.com.

Group active customers increased by 4% to 3.5 million as at 30 April 2026, with Kogan.com active customers increasing by 9%.

Group revenue rose 6% to $433.7 million, with 18.1% growth for Kogan.com. This helped adjusted operating profit (EBITDA) rise 17.4% to $37.5 million and adjusted EBIT grew 25.4% to $26.9 million.

Why the fund manager likes Kogan.com shares

WAM said that these improvements reflect a transition towards a simpler, more profitable operating model.

The fund manager concluded:

We see scope for continued earnings recovery in Mighty Ape and expect the company’s price leadership will continue to win market share in the current tougher macro environment. We also believe Kogan will be a beneficiary of artificial intelligence (AI), with respect to both revenue and cost savings.

In a world with a higher cost of living, the outlook seems promising for the business and its revenue and earnings growth reflects this. Operating leverage is a very powerful force for a business like this ASX share. But, Kogan.com isn’t the only attractive opportunity out there, of course.

The post Why this small ASX share could generate big returns! appeared first on The Motley Fool Australia.

More reading

• Up 40%! What is Bell Potter saying about this popular ASX stock?
• Buy, hold, sell: IPD, Kogan, Rio Tinto shares
• How much is needed in superannuation to target a $9,000 monthly passive income?
• 5 ASX shares set to soar 40% to 80% in 12 months: experts
• 2 ASX shares with dividend yields above 10%

Motley Fool contributor Tristan Harrison has positions in Wam Microcap. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Kogan.com. The Motley Fool Australia has recommended Kogan.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Owning National Australia Bank Ltd (ASX: NAB) shares could be attractive for investors wanting passive income because of its sizeable dividend yield and the stability it can provide.

There are a couple of benefits to considering NAB over Commonwealth Bank of Australia (ASX: CBA). Firstly, it has a lower price/earnings (P/E) ratio leading to a higher dividend yield.

Additionally, NAB isn’t as reliant on home loans as CBA – it generates a much bigger proportion of its profit from businesses.

Let’s start by looking at the projection for FY26 before seeing what it would take to receive $10,000 of passive income.

NAB dividend projection for FY26

National Australia Bank is projected to pay an annual dividend per NAB share of $1.72 in the 2026 financial year, which would represent a slight rise year over year.

At the time of writing, that translates into a grossed-up dividend yield of 6.8%, including franking credits.

When the RBA increases interest rates, banks have the potential to deliver stronger profits because of the ability to increase the net interest margin (NIM) – that’s how much a bank makes on its lending, which includes both the loan rate and funding costs like savings accounts.

While, in theory, loans and savings rates go up at the same pace, banks can lend out money in accounts such as transaction balances that don’t pay interest to the customer for a higher return to borrowers. But, the reverse is true when the RBA decreases rates.

In my view, that’s partly why the outlook for NAB’s profit growth is positive for the next 12 months.

How much is needed to buy $10,000 of passive income?

There are two different ways to consider what’s needed for the targeted level of passive income. Either with franking credits or excluding franking credits.

Australian investors get the benefit of this refundable tax offset, so I definitely think it should be included in the investors’ thoughts about the dividend income.

To receive $10,000 of passive income excluding franking credits, an investor would need 5,814 NAB shares.

Including franking credits, an investor would only need 4,070 NAB shares.

Is this a good time to invest in NAB shares?

According to CMC Invest, there have been 10 ratings on the ASX bank share within the last three months.

Of those 10, four are hold ratings, four are sell ratings and two are buy ratings. In other words, investment professionals are, on average, slightly more negative than positive on the NAB share price.

The average price target on NAB is $37.84, suggesting a small single-digit rise in percentage terms in the next 12 months.

It seems there are better opportunities than NAB out there right now.

The post How many NAB shares do I need to buy for $10,000 of passive income? appeared first on The Motley Fool Australia.

More reading

• NAB and ANZ shares: One I’d hold and one I’d sell
• Sell alert! Why this expert is calling time on NAB and Westpac shares
• Hedge funds are shorting the big four bank shares. Should investors be worried?
• What are the big 4 banks worth as the housing market falters?
• The next RBA interest rates move will be down, NAB says

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

All Aussie investors dream of investing in a winning ASX 200 share which then rockets in value. But when it comes to investing for my kids, the goal is much simpler: good quality businesses with the potential to thrive for decades.

Here are two ASX 200 shares I’d be happy for my kids to own for the next 20 years.

Telstra Group Ltd (ASX: TLS)

Telstra is a classic ASX 200 defensive stock. The telecommunications company is dominant in Australia. It operates one of the country’s largest mobile networks and is a major fixed-line internet provider. 

Mobile phone and internet services are now considered daily necessities rather than discretionary items which means demand is very likely to be consistent and stable for many years to come.

This stable demand means Telstra is well-positioned to benefit from a stable and recurring revenue and earnings. And this will be regardless of what stage of the economic cycle we are in. 

This type of stock is also perfect for investors who want to hedge against potential volatility elsewhere in their portfolio.

My kids are young, so they have several years worth of potential compounding.

And if that isn’t enough, Telstra’s defensive nature means it can also pay shareholders a consistent passive income too.

The ASX 200 telco most recently paid shareholders a 10.5 cent per share dividend in March, 90.48% franked. Analysts forecast Telstra to pay a total dividend of 21 cents in FY26, which translates to a forward dividend yield of around 4.1% excluding franking credits, at the time of writing. 

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is an entirely different type of ASX 200 stock. Rather than being defensive, it has the potential to give my kids strong growth and good compounding benefits over the long term. 

The ASX 200 tech company has been caught up in the tech-sector wide sell-off over the past nine months, but has continued to post some positive financial results. The SaaS (software as a service) ERP business posted its 17th consecutive first-half profit result in mid-May and reaffirmed FY26 guidance.

As a business, however, Technology looks like a promising long-term investment option. The company provides enterprise software to customers which include councils, universities, government agencies, and large businesses.

It has a cloud-based software model which generates recurring revenue. It has a sticky subscriber base because, once customers adopt its software, switching is costly and disruptive.

The ASX 200 business also has the potential for a long runway for growth as more customers migrate to its platform.

What’s better is that it looks like TechnologyOne is one of few tech companies which actually benefits from (AI) product development, rather than challenging it. 

I think TechnologyOne has the potential to outperform over the long-term.

The post 2 ASX 200 shares I’d want my kids to own appeared first on The Motley Fool Australia.

More reading

• How to build a $1 million ASX share portfolio from zero
• These 3 ASX technology stocks can prosper in uncertain times
• If I invest $5,000 in Telstra shares today, how much passive income will I receive in FY26 and FY27?
• The ASX shares I’d pick in a FIFA World Cup first eleven
• 5 ASX 200 shares downgraded by the experts this week

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Most people assume building real wealth needs a big lump sum, perfect timing, or a knack for picking the next winner.

It rarely does.

More often, it comes down to something far less glamorous: investing a manageable amount, on a schedule, and then leaving it alone.

That is exactly where a simple, low-cost ETF portfolio earns its keep.

The two-fund foundation

A sensible starting point for many Australian investors is a two-pronged core.

The first piece covers home. The Vanguard Australian Shares Index ETF (ASX: VAS) holds the 300 largest companies on the Australian share market in a single position – the big banks, miners, and blue chips most of us already own indirectly.

The second piece covers the world. The iShares S&P 500 ETF (ASX: IVV) tracks the 500 largest companies listed in the United States.

However, do not let the US tag mislead you.

Names like Apple, Microsoft, Alphabet, and Nvidia earn revenue across the planet. Buying the S&P 500 is really buying a slice of global commerce, not just America.

Together, VAS and IVV pair Australian income and franking on one side with global growth on the other. Two trades. Genuine diversification.

Why drip-feeding works

Investing $500 a month is a strategy in itself.

It is called dollar-cost averaging.

Instead of trying to guess the perfect entry point, you buy a little every month – through the highs, the lows, and everything in between. When prices fall, your $500 buys more units. When prices rise, it buys fewer.

Over time, that smooths out your average purchase price and strips away the pressure of timing the market.

Then compounding takes over.

Each distribution you reinvest buys more units, which earn their own distributions, which buy more units again. Returns start earning returns. That is the quiet engine behind long-term investing.

The 10-year maths

Here is roughly how the numbers stack up.

$500 a month is $6,000 a year, or $60,000 contributed over a decade.

Assume an average compounded annual return of 8% to 9% – broadly in line with the long-run history of Australian and global share markets, though never guaranteed in any single year.

At that rate, your starting $500 plus monthly contributions could grow to somewhere around $88,000 to $93,000. 

The gap between what you put in and what you walk away with is compounding at work.

And here is the part that surprises people.

Compounding is slow at first. For the early years, your balance looks a lot like your contributions plus a little extra. Then it accelerates.

Stretch the same $500 a month out to 20 years at 8%, and the balance climbs toward $280,000. Double the time (or patience!), but far more than double the result.

Gradually, then suddenly.

Let it run

One rule matters even more than the maths: do not interrupt it.

As the late Charlie Munger put it, “The first rule of compounding is to never interrupt it unnecessarily.”

Every sale resets the clock on the most valuable part – the back end, where the curve turns steep.

And you do not need to sell to be rewarded. The distributions VAS and IVV pay arrive along the way, and as your unit count grows, so does that income. Years of discipline can pay you an income stream without ever cashing out the engine that built it.

Foolish takeaway

None of this requires brilliance. It requires patience, a low-cost core, and the discipline to keep going when the headlines turn ugly.

Markets will fall along the way – sometimes sharply – and a 10-year plan only works if you stay invested through those dips.

But for investors willing to start small and think long, a simple ETF portfolio can turn an ordinary $500 a month into something that quietly, then suddenly, reshapes the picture.

The hardest part is not the maths. It is starting and not stopping.

The post What $500 a month in ASX ETFs looks like in 10 years appeared first on The Motley Fool Australia.

More reading

• Buying the Vanguard Australian Shares ETF (VAS)? There’s a big change you should know about
• 3 world-class ETFs for Australian investors
• How to use the iShares S&P 500 ETF (IVV) to become a millionaire
• 3 ASX stocks I’d buy during a sharemarket crash
• How to invest in ASX shares when you don’t know what to buy

Motley Fool contributor Leigh Gant has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Starting from zero can feel like the hardest part of investing.

There is no large lump sum to put to work and no portfolio quietly compounding in the background.

But that also means the plan can be built properly from day one.

The goal is not to get rich quickly. It is to buy quality ASX shares consistently, give them enough time to compound, and avoid the mistakes that can break the process.

Buy quality businesses

The first step is deciding what kind of ASX shares deserve a place in the portfolio.

For a $1 million target, I would not build around speculative small caps or companies that need everything to go right. I would focus on businesses with sustainable earnings, strong management teams, and the ability to reinvest for growth over many years.

That could include names such as Goodman Group (ASX: GMG), which has exposure to logistics, industrial property, and data centres. Or Macquarie Group Ltd (ASX: MQG), which has a long record of finding opportunities across global markets.

TechnologyOne Ltd (ASX: TNE) is another example of the type of business that can compound over time, thanks to recurring software revenue and a strong position in enterprise software.

The common thread is quality. A long-term portfolio needs companies that can survive difficult markets and still be stronger years later.

Make the monthly investment non-negotiable

The next step is consistency. Investing $1,000 a month works best when it becomes part of the household budget, rather than a decision that has to be made from scratch each time.

That removes a lot of emotion from the process. The market will never feel perfectly safe. There will always be headlines about interest rates, recessions, valuations, elections, or global risks.

But regular investing helps cut through that noise. Some months, the money will buy ASX shares at higher prices. Other months, it will buy them after a pullback. Over time, that steady approach can help investors build positions in quality companies without trying to predict every market move.

This is where dependable compounders can help. A business such as Wesfarmers Ltd (ASX: WES) has shown how a strong retail and industrial portfolio can create long-term value. Woolworths Group Ltd (ASX: WOW) offers a different type of strength, with defensive demand from supermarkets and everyday household spending.

Not every holding needs to be exciting. Some just need to keep producing earnings, paying dividends, and growing steadily.

Time and compounding

Let’s assume that an investor starts with nothing, invests $1,000 a month, and achieves an average annual return of 10%.

That return is not guaranteed, but is roughly in line with long-term averages, so is achievable.

At that rate, the portfolio would grow to approximately $1 million in around 23 years.

That is the part many people underestimate. The early years can feel slow because most of the portfolio is built from savings. Later, the balance can start moving more from investment returns than fresh contributions.

That is when compounding becomes obvious.

Foolish takeaway

Building a $1 million ASX share portfolio from zero is not about one perfect stock pick. It is about repeated monthly investing, quality businesses, reinvested returns, and enough patience to let the maths work.

Done well, small beginnings can become serious wealth.

The post How to build a $1 million ASX share portfolio from zero appeared first on The Motley Fool Australia.

More reading

• 5 ASX shares for a winning retirement portfolio
• How I would use Warren Buffett’s golden rules to build wealth with ASX shares
• Brokers name 3 ASX shares to buy right now
• 2 incredible ASX 200 shares to buy and hold for 10 years
• Buy, hold, sell: Nick Scali, Nyrada, Wesfarmers shares

Motley Fool contributor James Mickleboro has positions in Goodman Group, Technology One, and Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, Macquarie Group, Technology One, and Wesfarmers. The Motley Fool Australia has recommended Goodman Group, Macquarie Group, Technology One, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australians aged 67 years or older may be entitled to receive the Age Pension to help them fund basic living costs in retirement.

The Age Pension is paid on a fortnightly basis up to a maximum total payment of $1,200.90 per fortnight for singles and $1,810.40 for couples combined. 

These sums include the maximum basic rate, the maximum pension supplement, and the energy supplement.

The catch is, not everyone is eligible.

It is heavily dependent on your income level and the assets that you own.

The problem is that many Australians miss out on payments because they don’t really understand how the income test works.

Overlooking income limits could quickly reduce your Age Pension payment, or you could lose it altogether.

Here are the most important things Australians at age 56 need to know about the Age Pension income test before they retire.

1. Income applies to all incoming money, not just wages

The income test assesses all of your income pooled from all sources. That includes anything from superannuation contributions, investment income, part-time wages, bonuses or commission payments. It’s applicable regardless of your age. 

2. Income thresholds for the maximum Age Pension

In order to receive the full Age Pension, singles can’t earn more than $218 per fortnight, while couples can’t earn more than $380 per fortnight.

But it’s still possible to receive a part pension if you earn over those thresholds.

3. The sliding scale

Singles can earn up to $2,619.80 per fortnight, and couples (living together) can earn up to $4,000.80 per fortnight and still qualify for at least a part-Age Pension. 

Couples living apart due to ill health can earn a little more, at up to $5,183.60.

But, it’s important to note that your income is assessed on a sliding scale.

For a single person, your Age Pension will reduce by 50 cents for each dollar over $218 and for couples it will reduce by 25 cents for each dollar over $380.

In other words, the more you earn, the lower your Age Pension payment will be, until it reaches zero when your income hits the maximum allowed figure.

4. Age Pension deeming rules apply

Deeming is a calculation centrelink uses to determine how much income you make from your financial assets. 

Deeming assumes your financial assets (like bank accounts, superannuation, and shares) earn a fixed, set rate of income, regardless of what they actually earn.

This assumed income is then added to your other income to determine your Age Pension rate.

For single Australians, the first $64,200 of your financial assets has the deemed rate of 1.25% applied. Everything over that is deemed to earn 3.25% interest.

Couples have a 1.25% deeming rate on their first $106,200 of combined financial assets (this includes superannuation). Anything over $106,200 is deemed to earn 3.25%.

5. The ‘lower of two’ rule

The Age Pension eligibility depends on your income and the assets that you own. But to ensure the system is fair, unfortunately the Australian Government assesses you under both tests and will apply whichever test the lowest rate of payment for your individual circumstances.

The post 5 things Aussies at age 56 need to know about the Age Pension income test before they retire appeared first on The Motley Fool Australia.

More reading

• Don’t forget to consider this key superannuation strategy before 30 June
• Why is the ASX 200 surging nearly 2% today?
• Magellan Financial Group shares: ACCC backs merger and rebrand plans
• DigiCo Infrastructure REIT boosts liquidity via US sale and reaffirms FY26 earnings
• Woodside Energy lifts Browse JV stake under pre-emption deal

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Next week is looking like it could be a big one for Aussie mortgage holders, with the Reserve Bank of Australia (RBA) making its latest interest rate decision.

In May, the central bank raised the official cash rate by 25 basis points to 4.35%. This marked the third consecutive rate hike of the year in an effort to combat stubbornly high inflation.

Will the RBA make it four meetings in a row? Let’s see what Westpac Banking Corp (ASX: WBC) is expecting on Tuesday.

Will the RBA increase interest rates next week?

The good news is that despite inflation being above target, Westpac believes the RBA will keep the cash rate steady at 4.35% next week.

According to the latest Westpac Weekly economic report, the banking giant’s economics team believes the RBA Monetary Policy Board (MPB) will be wanting to see what impact its three hikes have on inflation before making any further moves.

Westpac’s chief economist, Luci Ellis, said:

We affirm our existing expectation that the RBA Monetary Policy Board (MPB) will hold the cash rate steady at its June meeting next week. Although inflation remains above target, the previous three rate increases have given the MPB time to assess cross-cutting trends of weak consumers and housing markets versus high inflation pressures and a secular boom in data centres and related investment. The recent run of inflation and labour market data has been a bit mixed, supporting the case for a pause.

However, the bad news for borrowers is that Ellis doesn’t necessarily believe that there won’t be more interest rate hikes later this year.

In fact, Westpac has pencilled in two rate hikes before the end of 2026, lifting the cash rate to 4.85%. Ellis adds:

It is notable that RBA Governor Bullock has characterised the three rate hikes delivered earlier this year as necessary to deal with the domestic inflation risks present before the Middle East conflict began, and that this “gives space” for the RBA to see how the conflict plays out.

Markets are increasingly adopting a sanguine view on the conflict despite a run of military strikes, seeing Brent oil generally trade between US$90 and US$95 per barrel over the past week, with the lower limit of that range tested overnight after President Trump announced a deal would be signed in coming days. While the RBA is set to pause in June, input cost inflation and the threat of broad-based passthrough still makes the case for further rate hikes in August and September.

When will rates come back down?

As things stand, Westpac expects the cash rate to peak at 4.85% and remain there until the end of 2027.

After which, it believes that rates will reduce to 3.85% by the end of 2028.

However, a lot could change between now and then, so time will tell if that is the case.

The post Here’s what Westpac says the RBA will do with interest rates next week appeared first on The Motley Fool Australia.

More reading

• Why the RBA’s decision next week could be the most important event for ASX shares in 2026
• Sell alert! Why this expert is calling time on NAB and Westpac shares
• Hedge funds are shorting the big four bank shares. Should investors be worried?
• What are the big 4 banks worth as the housing market falters?
• Sell alert! Why this expert is calling time on Westpac and CBA shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The analyst team at Shaw and Partners have come up with an interesting thesis as to why changes to negative gearing and capital gains tax in the Federal Budget could be a tailwind for Pioneer Credit Ltd (ASX: PNC).

Weaker housing market to have a knock-on effect

In a research note sent to clients recently, the analyst team posit the notion that there will be a slowing in credit growth and an increase in debt impairments driven by softer housing conditions.

This, in turn, will put pressure on bank earnings, which will trigger a renewed focus on profit levers.

They explain further:

One such lever is the sale of written-off, aged debt, where recoveries flow directly to profit and support return on equity. We consider a surge in aged debt supply as inevitable.

Shaw and Partners said it believes the net effect could be a material positive on Pioneer Credit’s valuation.

They add:

Historically, PNC generates c.2.5x its acquisition price on purchased debt portfolios (PDPs). Importantly, 50–60% of lifetime collections are typically realised within the first year. As a result, increased PDP investment should lift near-term free cash flow, as year-one collections are likely to exceed the initial purchase outlay (noting that timing differences can affect reported fiscal outcomes). In recent years, the debt recovery industry has experienced subdued supply, driven by low interest rates and regulatory constraints that limited bank asset sales. However, PNC is now observing a meaningful shift, with banks returning to the market in force. The final major bank is expected to fully re-enter the market shortly, having recently tested supply with PNC.

Shaw and Partners estimated that Westpac Banking Corp (ASX: WBC) alone could have about $2 billion in aged debt, which had been written off but which remains unresolved.

The analyst team said the market had thinned in recent years such that Pioneer effectively operates in a duopoly, and it is “benefitting from panel deselection of competitors and its status as preferred counterparty due to its compliance record”.

Shares looking cheap

Shaw and Partners has a 12-month price target of $1 on Pioneer shares, compared with 68 cents at the time of writing.

Pioneer in March upgraded its profit guidance for the full year to $23 million, which was a 28% increase on previous guidance.

The increase came about as a result of the repricing of a major debt facility and a strong operational performance.

Pioneer is valued at $107.7 million.

The post This debt collector could surge 47% on negative gearing changes, Shaw and Partners says appeared first on The Motley Fool Australia.

More reading

• These two ASX financial services companies could both jump more than 50% Shaw and Partners says

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.