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A Warehouse Inspired Penthouse Like No Other

The beauty of a warehouse-style conversion is found in its immense sense of space. This unique offering at 1/6 Tilbrook Street, Teneriffe on the Brisbane River offers vacuous amounts of loft and light across three levels.

The interplay of glass and architectural voids – combined with the 921sqm floorplan – sees this residence feel exceptionally large. With 6-bedrooms, 5-bathrooms and 4-car garage with direct access, the penthouse functions more like a rooftop home than an apartment.

The main living space sees soaring ceiling heights in which the kitchen – fitted with granite benchtops, Gaggenau appliances and a butler’s pantry – combines with the outdoor dining and living room. A vintage Indian motorbike has been bolted into the wall and comes with purchase.

Outdoors, the balcony provides plenty of space to entertain, with a built-in barbecue, refrigeration and kitchenette, while a glass shutter offers protection from the elements.

It’s also on this floor that you’ll find the master suite, which is complete by its own walk-in robe and ensuite.

Upstairs sees the remaining bedrooms, two of which are replete with ensuites. Also here, is the theatre room and a separate large bathroom.

Further, the top level sees more room for entertaining. Here a living space is complete with a powder room, two balconies, a bar and kitchenette, while a gas fireplace forms the centrepiece of the room.

Each floor is accessible via an internal lift, with the residence is also privy to a gym, cellar, guest suite and is controlled by a CBUS-like system that automates, blinds, shutters, the skylight, speakers – found throughout the house – aircon and Boffi fans.

One of only nine residences in the build, the address gives rare access to the restaurants, cafes and Gasworks precinct and is only a short walk to the river.

The listing is with Place’s Heath Williams (+61 403 976 115). Price guide $6m.

Eplace.com.au

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How To Know When To Quit Your Job

People running door isolated on background. Vector illustration. Eps 10.

Older workers have a problem. They don’t know when to quit.

As baby boom-era CEOs, professors, lawyers, engineers and others get older and keep their jobs longer, it is raising uncomfortable questions.

Is there an art to stepping down gracefully? “I’m not sure there’s an art. I think it requires will,” says Anne Mulcahy, who was 56 when she voluntarily gave up the CEO job at Xerox to make way for her successor, Ursula Burns. She is now 68. “It’s hard. It’s not something that happens naturally if you like what you do and you’re good at it. You have to set time limits for yourself.” You also have to know what your purpose is after you retire or “you go into this void that’s really very tough,” she adds. Leaving the C-suite was one of the hardest things she’s ever done, says Ms Mulcahy, who lives in Connecticut and is now actively involved with nonprofit organizations.

Mandatory retirement at 65 ended for most jobs in the mid-1980s, giving some people the impression they could work forever. Since life expectancy has increased—from 70 years old in 1959 to about 83 for today’s 65-year-olds—many people want to work longer, for both personal and financial reasons.

At their peak, boomers, those born between 1946 and 1964, numbered almost 79 million, and their ranks include the first generation of career women and lots of people who remained single or got divorced. For many boomers, work has taken on an outsize role. It provides purpose, fulfilment and community. It creates structure and routine.

Since many work at desks or in the service industry—not manual labour—boomers also have fewer physical limitations that could cut a career short. “Retiring at 65 makes no sense. Many people are still at the height of their game,” says Gillian Leithman, a Montreal-based retirement coach who conducts seminars and corporate workshops. Nonetheless, 65 is still the line of demarcation at which everybody else thinks you should be ready to retire, regardless of whether you agree. Another career coach says it’s like having an expiration date on your forehead.

“People are turning traditional retirement age and the gas tank isn’t empty,” says Robert Laura, a Brighton, Mich.-based retirement coach and financial planner. “They can easily work til 75.”

That’s why so many people avoid planning for it. Until the pandemic, boomers were retiring at a rate of about 2 million a year. By last September, 40% of boomers in the U.S. had retired, according to a recent report by the Pew Research Center.

Dr Leithman finds that most people, even high-powered executives, put off thinking about it until the 11th hour. When she asks them what will get them out of bed in the morning in retirement, most have no idea, she says. “They’re terrified.”

The transition is so difficult that it has spawned a new industry of coaching and consulting firms that focus solely on retirement. Many are run by former corporate executives who know the difficulties first hand, like Bob Foley, former CEO of Travelodge hotels and the former human resources chief of Pyramid Hotel Group. Mr. Foley says he was called in one day by his boss, the CEO at Pyramid, who asked out of the blue if he had a plan to identify and train his successor. “I thought, ‘What, are you out of your mind?’ ” he recalls. He was 53, and the company was growing fast. “I thought, ‘Is he pushing me out? Is my life about to end?’ You go through that fear stage. Everybody does.”

He spent eight years hiring and training his much younger successor, learning to appreciate the generational differences between himself and younger workers who are more tech savvy and champing at the bit to get their turn.

Mr Foley, now a Boston-area executive career-transition coach, tells clients to retire when their skills are no longer in vogue. At Pyramid, he was against texting—he thought it too unprofessional. He didn’t think customer service could ever be entrusted to an automated chatbot. When younger employees suggested replacing an obsolete HR system that he’d created, “Boy, did I say no to that,” he says. He finally realized “these guys are smarter than I am. I finally got out of my way.” At 61, he was ready to leave.

Retirement doesn’t just happen. “The heavens don’t open up, the world isn’t at your feet when you retire,” says Mr Laura. “Retirement is a made-up phase of life. It’s nothing until you put things into it.”

He asks clients to write down how they’d spend one day in retirement; then how they’d spend a week. Often they only make it halfway through. Once people figure out retirement could last 30 years, they realize that’s a long time to play golf, knit or help register voters. They want to find something to throw themselves into, says Chip Conley, who founded Modern Elder Academy, a school in Baja California Sur, Mexico, where mid-lifers and retirees can problem-solve a career transition.

The transition is often painful and messy, says Mr Conley, 60, who founded the boutique hotel business Joie de Vivre Hospitality at age 26, sold it 24 years later, and then for a time was a strategy executive at Airbnb. “I had to end the idea that I was a CEO. I had to right-size my ego and let go of all my hotel knowledge,” he says. He likens it to “ripping off a body suit of Band-Aids.”

He warns clients about “the messy middle,” the interim period when retirees have no idea what’s next. He has them create dream boards, asking themselves, do you want to be an angel investor, author, social worker, entrepreneur? He helps them figure out what skills and experience they can apply in a new venue, as he did when he moved from the hotel industry to tech. He tells them to follow their curiosity. “If you’re passionate and engaged and curious, people lose track of your wrinkles,” he says. “They are attracted by your energy.”

Stepping down works best when you follow a plan, experts say. Don’t expect execution to be perfect. Though Ms Mulcahy knew she wanted to be in nonprofits, “the need to fill your calendar is so strong that you say yes to things you shouldn’t,” she says. “You worry about your shelf life and staying relevant.” She found in hindsight that it hadn’t been necessary to add a stint as cable news commentator to her board and nonprofit work. “It solved my itch to feel I was still part of the business world,” but it didn’t suit her, she says. “I hated it.”

She settled into a seven-year chapter chairing the board of Save the Children, a nonprofit organisation that took her all over the world. She is now focused on helping younger career women navigate the corporate world, specifically a network of 25 who meet in her apartment every quarter. “We sit around and drink wine and solve each other’s problems,” she says.

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15 Personal-Finance Lessons We Can All Learn From The Year Of Covid-19

Learning To Manage Your Finances

With 2020 in the rearview mirror, and the end of the pandemic (fingers crossed) in sight, there’s a lot of economic damage to be assessed. But there are also a lot of personal-finance lessons we can learn—lessons that will put us in good stead, whatever the economic future holds.

Lessons about the importance of emergency funds and having different income streams. Lessons about how this time really isn’t different (no matter how much it feels different). Lessons about how personal finance is truly personal. And much more.

These are some of the lessons we heard about when we asked financial advisers and others to reflect on the past year. It was a year, no doubt, that many people would prefer to forget. But before we try to wipe those memories clean, here are some of the things that investors, savers and spenders would do well to remember.

Emergencies do happen

One clear lesson from the past tumultuous year is that more Americans should work to build an emergency fund of at least one month of spending. An accessible emergency fund (kept in an easy-to-access form like a savings or checking account) can help alleviate the need for drastic cuts in spending when facing temporary shocks to your income.

While an emergency fund cannot make up for losing your job and facing long-term unemployment, it can help to reduce the impact of shorter-term economic disruptions. For instance, last year many households had members who were furloughed for several weeks while governments had mandated closures of their employers.

In addition, those facing longer-term unemployment often had to wait weeks for benefit checks to start to flow in. In such cases, having several weeks or more of accessible savings can reduce the need to undertake painful spending cuts or borrow at high interest rates to make required payments.

—Scott Baker, associate professor of finance at Kellogg School of Management at Northwestern University in Evanston, Ill.

We can be financially disciplined

The pandemic has taught us that financial discipline is possible. The restrictions on life’s pleasures, like travel and eating, caused all of us to rethink how much we spend on these activities. We reflected on our excess indulges and realized the value of spending moderately and saving intentionally.

Building cash reserves from unspent money on niceties sparked greater confidence in handling life’s shocks. Many of us appreciated the extra money to weather job loss, reduced income due to cutbacks or caregiving responsibilities, and mounting medical bills.

We also start thinking more about how we should spend our money, whether it was because of sheer boredom or a greater appreciation of life in the midst of constant Covid-related casualties. Life’s experiences often serve as the catalyst for changing financial habits and mind-sets.

—Lazetta Rainey Braxton, co-CEO of 2050 Wealth Partners, New York

Buy when others are scared

The best time to invest is when others are fearful. In 2020, we faced risks unlike any we’ve dealt with in our lifetimes. Being told you’re in danger triggers all your evolutionary defence mechanisms intended to keep you safe. Unfortunately, none of these instinctive reactions is useful in the arena of long-term investing. In March, investors’ fears extended well beyond their portfolios and into their personal well-being.

It’s common to hear “this time is different,” but there are two things that tend to remain true of all bear markets. First, buying when the market is down at least 30% has historically been an excellent entry point for stocks. Buying stocks in March required you to embrace fear and uncertainty in exchange for the higher expected returns.

Second, while all bear markets are inherently different, the common thread is that they always end. Investors must be willing to lose money on occasion—sometimes a lot of money—to earn the average long-term return that attracts most people to stocks in the first place. And if you can be a buyer in times of fear, your chances of earning above-average returns improve.

—Peter Lazaroff, chief investment officer at Plancorp, St. Louis

Manage your risks

The biggest personal-finance lesson from 2020 is the importance of comprehending and managing risk. Unfortunately, this is one of the concepts of personal finance where knowledge is lowest, according to the TIAA Institute-GFLEC Personal Finance Index. While risk is a constant in our life, we often do not insure enough against the risks we face.

We should ask ourselves: Does my family have the proper coverage in case of health problems, including the ones created by the virus? And in case we have a high-deductible health plan, do we have enough to cover the deductible? And are we covered in case someone becomes disabled? Should we change or increase our long-term disability insurance? And importantly, do we have life insurance to protect our family in case of the death of the income earner(s)?

These are difficult questions to confront and ask, but the pandemic is a good reminder that it is better to be safe than sorry.

—Annamaria Lusardi, university professor at George Washington University in Washington, D.C.

You need a will

There has never been a better time to put front and centre the need for every adult to have a will. No one expected the level of tragedy that occurred world-wide last year. And people don’t want to think about the idea of dying one day—a reason why they often kick this can down the road. But a big lesson of 2020 is that you should be prepared for the worst.

Whether you’ve built a net worth like Tony Hsieh, former CEO of Zappos (who had no will) or you are worth $10,000, it’s important for the family you leave behind to understand the wishes you have for your assets and belongings. It’s also important to check your beneficiary designations. If you have life insurance, a 401(k) or an IRA, they are a contract of law and will go to that named beneficiary, whether or not you have a will. People often forget to update or change those beneficiaries.

—Ted Jenkin, co-CEO and founder of oXYGen Financial in Alpharetta, Ga.

Your personal finances reflect your values

The events of 2020 reminded people of the foundational reasons behind their financial life—their “why.” Many people have reconnected personal finances with the things most important to them: how they use their time, how their money fuels their family and home life, what their investments support and fund, and how their careers enrich their lives. Personal finance does not exist in a vacuum; it exists in light of what we value most.

Last year has reminded people of what they value and has also helped identify what is not important. For many people, it’s that all the details around finance and money should come back to a core purpose—facilitating the lives that we all want to live. That has real-world impact on the decisions we make about how we derive income, how we spend our resources and how we invest.

—Jared B. Snider, partner and senior wealth adviser at Exencial Wealth Advisors in Oklahoma City, Okla.

 

Retirement plans need flexibility

The Covid-19 pandemic has left more Americans feeling the need to delay their retirement as both a short-term and long-term financial fix. And that is a wake-up call for many would-be retirees about the importance of not having retirement plans and expectations set in stone.

A whopping 81 million Americans reported that their retirement timing has been impacted by the pandemic, with most believing that they will need to work longer than they had previously planned, according to a survey on work and retirement attitudes and expectations that my firm, Age Wave, has just conducted in partnership with Edward Jones. Most are putting off retirement for an average of about three years, according to the survey.

For many Americans, a few extra years of work can offer a financial buffer. It also can provide continuing social connections, mental stimulation and contribute to a sense of purpose—which, for many people, can be a silver lining after this difficult year.

—Maddy Dychtwald, co-founder of Age Wave, a think tank and consultancy in the San Francisco Bay Area

Things won’t stay bad—or good—forever

Extrapolating the recent past too far into the future is a big mistake. This is known as recency bias, and it is one of our biggest downfalls as humans. Last year taught us a powerful lesson, in both directions.

Optimism was the order of the day early in 2020 with the market making all-time highs. Compare that with March, when things looked like they would never recover. In both cases, investors would have been well-served not to assume the recent past was going to continue forever. Many investors we spoke with in March wanted to make dramatic changes to their investments because they were assuming things would continue to get worse.

This is why a diversified portfolio that you can stick with regardless of the market environment should be the cornerstone of almost everyone’s investment strategy.

—Jeff Mills, chief investment officer of Bryn Mawr Trust in Berwyn, Pa.

This time is different. Not.

It is always nerve-racking to watch the market go through a sizable correction as investors find it increasingly hard to differentiate the economic ramifications versus the results created by the media. When the downturn is caused by a pandemic, it adds another layer of complexity to the confusion. The brain says, “This time is different.”

The truth is that each recession is different, but the discipline which investors adopt to manage their portfolios should remain intact. Investors with proper asset-allocation discipline that incorporates liquidity strategy should refrain from giving orders to their advisers when the noise grows to become overwhelming. Selling orders out of despair led to liquidating at the bottom in March and missing the unpredictable quick rebound in April and beyond. The unprecedented global pandemic sweep was met with the unprecedented speed of monetary and fiscal policy adjustments and the fastest vaccine development witnessed. It was evident that the market worked itself out.

This time is no different from any other time. It’s time in the market rather than timing the market that matters in the long run.

—Jessica Guo, financial adviser and senior portfolio manager/international wealth management adviser at UBS and founder of Guo Group in Wellesley, Mass.

Markets always fool us

It was the year of Covid-19, skyrocketing unemployment, a shrinking economy, a $3.3 trillion ballooning of the U.S. budget deficit, racial riots, heated political discourse. Yet, rather than plunging, the U.S. stock market responded by surging about 20%, as measured by the total return of the Wilshire 5000 Total Market Index. What gives?

In the 33 days between Feb. 19 and March 23, when the pandemic gained its foothold in the U.S., domestic stocks plunged nearly 35%. Many people told me stocks would not recover until we had a vaccine. Even some people who realized the phrase “this time is different” was the costliest phrase in investing told me, “This time really is different.” (Admittedly, if going into the year I had known what was going to hit us, I’d have bailed on stocks.)

Why did stocks recover and soar in the wake of such horrible economic news? The weaker explanation is that the decline in future corporate cash flows was less than the reduction in the discount rate used to value those stocks. This was caused by plunging and now near-zero interest rates. The much stronger explanation is simply that the stock market continues to fool us.

Lesson learned: If we can’t even explain the past, just think how futile it is to try to predict the market’s future.

—Allan Roth, founder of Wealth Logic in Colorado Springs, Colo.

You should have a three-bucket strategy

The Covid-19 recession has proved once again that every investor should always have an investment plan and strategy that can weather events such as what we have experienced.

A three-bucket strategy is a wise approach as investors rethink how they should invest their money. A short-term bucket should have one to two years of expenses in short-term instruments such as cash or short duration bonds. An intermediate-term bucket should be for monies not needed for two to five years, such as core bond funds. A long-term bucket should consist of money not needed for at least five years and can be invested in equities. This approach will prepare investors for any short-term risks that arise, such as coronavirus-related recessions, without sacrificing the integrity of their portfolio.

—Brian Walsh Jr., senior financial adviser at Walsh & Nicholson Financial Group in Wayne, Pa.

Rebalancing pays off

Rebalance your portfolio when market movements cause your equity mix to stray from your target percentage. Doing this—buying more equities when under target or selling when they are above—is a good way to buy low or sell high.

In most years, rebalancing helps your portfolio’s return by a percentage point or two. Once in a while, it can double or triple this when equity markets decline steeply and recover, like during the 2007-09 recession. There hasn’t been such an outsize rebalancing opportunity until last winter when the pandemic hit.

However, you won’t realize these benefits unless you actually do the rebalancing. Otherwise, all you will realize is your fear of missing out when markets do eventually turn.

—Jonathan Guyton, principal at Cornerstone Wealth Advisors Inc. in Minneapolis

Stay invested

Last year’s tumultuous market reinforced the importance of staying invested. It looked like financial markets were doomed near the end of the first quarter. We saw days where markets went down over 10%. Many investors panicked and went cash fearing the worst. Since then, the markets have rallied and anyone who tried to time the market and go more conservative is probably feeling a bit of regret.

—David Blanchett, head of retirement research at Morningstar Investment Management in Lexington, Ky.

Have a side gig

Just as investment advisers recommend having a mix of investments in your 401(k) to minimize stock-market risk, it’s critical to have a mix of income sources. Many global citizens took the pandemic as a call to action and used technology to create new income streams through blogging, selling courses, writing e-books, posting video content, coaching or consulting, setting up an online shop, investing and so much more. In the 21st century when the majority of transactions occur digitally via the web, technological literacy is as critical as financial literacy.

—Yanely Espinal, director of education outreach at Next Gen Personal Finance in New York

Yes, bonds are still important

Many investors are quick to dismiss bonds given their historically low yields. However, the events of the past year have reinforced the importance of including fixed income within one’s portfolio.

When Covid-19 first hit, from mid-February to the end of March, the S&P 500 plummeted 34%. A diversified portfolio of equities and fixed income outperformed the broad stock market during the scariest times of the year. The stabilizing bond exposure helped many investors stay the course and minimize emotional selling during this time.

Having bond exposure in early March also provided investors with a wonderful rebalancing opportunity. As investment-grade bonds significantly outperformed the market, investors could use proceeds from selling bonds that stayed flat or appreciated in value to buy stocks that were trading at a discount from just a few weeks earlier.

Additionally, bond exposure helped the many Americans who had to liquidate investment assets to meet their cash-flow needs as employees were laid off or furloughed from their jobs during the year’s quarantine. Selling their bonds provided a more stable cushion for many investors. Being forced to sell stocks at rock-bottom prices instead could have had a devastating impact on their finances.

—Jonathan I. Shenkman, a financial adviser at Oppenheimer & Co. in New York

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The Best Smart Home Gadgets From CES 2021

Smart Home

Not even a pandemic could stop the world’s premier technology trade event, the Consumer Electronics Show, now officially known as CES, but this year, in accordance with social distancing and safety protocols, the event went all online.

Despite the novel format, CES was still packed with all the cutting-edge tech for which it’s become known. Below are some of the best devices you may be welcoming into your smart home soon.

LG Transparent OLED Smart Bed TV

Two years ago, all of CES was a clamour about LG’s OLED TV R, a 4K, organic LED smart screen that unfurled out of and re-rolled into a Dolby speaker base. This year, they’ve upped the innovation—by making it transparent and installable at the foot of your bed. The LG Transparent OLED Smart Bed TV, as debuted by LG Display, the company’s sci-fi-like screen division, is a 55-inch, 40% transparent screen which ascends and descends from a sleek and slender (and portable!) containment unit which is placed at the base of the bed. The screen, which users can see through when it is on or off, features speakers built into the display, and the container base provides an all-black secondary screen that can rise behind the transparent one for users to enjoy the full richness and colour of whatever they are watching. In addition to allowing users to consume televised entertainment, the Transparent OLED Smart Bed TV will allow them to mirror their devices on screen, and LG anticipates a suite of smart features for the device, from notifications and weather alerts to activity prompts and music streaming.

Like so many of CES’ most eye-grabbing gadgets, price and release date have not been named for the LG Transparent OLED Smart Bed TV.

NordicTrack Vault

Gym enthusiasts, acutely aware of what the pandemic has taken from them, will be overjoyed to learn of the NordicTrack Vault. Like the Mirror by Lululemon, the Vault is a full-length reflective surface/HD touchscreen that allows users to perfect their form as they take a wide variety of classes (yoga, lifting, high-intensity interval training and much more) from NordicTrack’s suite of iFit trainers. Unlike the Mirror, which is a freestanding or wall-hanging device, the Vault’s screen doubles as a door to a workout equipment storage system, complete with dumbbells, kettlebells, yoga, pilates, and strength-training accessories, giving Vault owners and even wider range of exercise options at their disposal.

Open to pre-order now, the Vault is available for around $3775 (exercise equipment included) or approx. $2500 (standalone), with each option including one year of iFit Family Membership.

Kohler Stillness Bath

Kohler

Looking for a smart (and luxurious) soaking experience? Kohler, a leading name in high-tech bathroom fixtures, has heard your pleas. Modeled after a Japanese spa-style soaking tub, the $20,000 Kohler Stillness Bath is an infinity-edge bathtub that users can fill via voice command (even specifying precise temperature) and features a mood-lighting system ringing the entire basin. Users can even upgrade their Stillness Bath to include an “Experience Tower,” which will add aromatherapy and mist to their bathing experience—both also controllable by voice command.

The Kohler Stillness Bath will be available for $7800 to $20,000, depending on features, with the various models rolling out from May to October 2021.

MyQ Pet Portal

Here’s one for the dogs (and cats). The Pet Portal from MyQ looks to liberate indoor-outdoor pet owners from the constant need to give their four-legged friends entry to and exit from the home. Outfitted with a live-video streaming camera and two-way audio via the MyQ app, Pet Portal owners can open the pet door for their cats and dogs remotely from their phones or tablets—or they can cede the decision entirely to their furry companions. With an accompanying Bluetooth-enabled collar, pets can activate the Pet Portal via (very) close encounter, and once the device, which opens in two panels like elevator doors, grants entry or exit, it quickly closes and locks to prevent any other unwelcome visitors.

The Pet Portal, which requires professional installation and replaces an existing exterior door, is available for $2,999.

Samsung Bot Handy

The smart home owner who wants the full “Jetsons” experience will be eagerly anticipating the release of the Samsung Bot Handy. Intended to serve as an extra hand wherever you need it around the house, the Bot Handy is a slender, mobile pillar with a rolling base and digital face—complete with expressions—and a fully articulating arm with clamp hand, that can pour you a drink, pick up laundry or even place dishes in the dishwasher. A forward-facing camera and pretty clever A.I. allow the Bot Handy to determine the material components of what it is seeing and handle it accordingly.

There is no release date or price yet for the helpful robotic companion, which Samsung lists as “in development.”

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Triguboff’s $3-Billion Eastgardens Play

Billionaire developer Harry Triguboff is surging forwards on his Eastgardens development.

Meriton’s largest project to date – Pagewood Green – has seen the addition of a new development application for the second stage of its sprawling $3 billion residential development.

The site is bounded by Bunnerong Road, Heffron Road and Banks Avenue will see the construction of a $115 million mixed-use project comprising two residential building up to 16 and 17 storeys in height and totalling 383 residential units.

Simultaneously, Meriton was also revealed as the buyer of Dyldam’s Pennant Hills site in Carlingford this week.

The 2.7-hectare site at 263-273 and 277-281 Pennant Hills Road was purchased for 68.5 million.

As for his Eastgardens build, the 87-year-old founder – who is personally worth about 15.5 billion, has described Pagewood Green as his most ambitious.

When complete, the precinct – which is only eight kilometres from Sydney CBD – will hold more than 400 units and span a 16.5-hectare site.

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How Composting Has Gone High-Tech

Compost

Humans have composted food for about as long as they have grown it. But in a world increasingly obsessed with tidy convenience, many view the chore of converting food waste into fertiliser for plants and gardens much as they do tending to kombucha scoby or committing to cloth diapers for their infants: too time-consuming, too “granola” and too plain icky.

Composting has “been perceived as this very stinky project that takes a bunch of time and only makes sense if you have a big backyard,” said Friday Apaliski, a San Francisco “sustainability concierge” who works with clients to make their homes more green. She believes that people “are starting to understand how truly phenomenal composting is.”

Composting has ‘been perceived as this very stinky project that takes a bunch of time and only makes sense if you have a big backyard,’ said Friday Apaliski.

Indeed, new composting technology has emerged that makes the process easier, faster and more stylish. Some composting systems are now small enough to live on your kitchen’s countertop and sufficiently attractive that you won’t mind looking at them day after day.

And with houseplant ownership skyrocketing (compost is just as good for Instagramable succulents as for an old-time vegetable garden) and a growing desire to reduce methane-producing food waste, more Americans are trying the ancient practice out for themselves. Between 2014 and 2019, according to the 2019 Composting in America report, the number of American communities offering composting programs increased 65%. This summer, Vermont became the first state in the nation to make composting mandatory.

If you’re going to do it, why not do it as pleasantly as possible? Here, our four favourite new products that use sharp design and cutting-edge technology to speed up, shrink down or even glamorize composting at home.

For Lazy Gardeners

Anyone looking to turn food scraps into fertilizer has typically had to house the refuse in rudimentary backyard containers and use their own forearm strength to intermittently aerate it with a shovel. New age tumblers like the Envirocycle do most of the aerating for you: You need only spin the drum manually a few times a week. Stored outside, the device is fully enclosed—keeping funky smells in and curious critters out. The company offers a 64-litre version of its classic 132-litre tumbler designed to fit on a patio or balcony. It promises to produce usable compost for your pandemic victory garden in a month. (US$210, envirocycle.com)

For Odor-Averse Urbanites

PHOTO: F. MARTIN RAMIN/THE WALL STREET JOURNAL

Once, environmentalists looking to keep their kitchens smelling fresh had no good option but to stuff their scraps in the freezer or bring them immediately to the collection pile outside, even on inconveniently freezing January nights. These days, tabletop bins like Bamboozle’s are designed to accommodate charcoal filters under the lid that oust odours through adsorption. The Bamboozle’s handle also makes it a good way to transport waste to a nearby community garden or compost collection site if you lack the space or ambition to make plant food yourself. (US$40, bamboozlehome.com)

For the Worm-Curious

PHOTO: F. MARTIN RAMIN/THE WALL STREET JOURNAL

Vermicomposting (that is, worm-assisted composting) can speed up the tedious process, but “pretty” is not something you’d call red wigglers, or the tiered plastic vermicomposting structures they typically live in. Uncommon Goods’ sculptural Living Composter, however, gives hardworking worms chicer digs. Just drop peelings and sawdust soil mix into the countertop device’s opening and the worms-in-residence (order yours from Uncle Jim’s, from US$28, unclejimswormfarm.com) will get busy processing about 1 kilogram of food a week into nourishment for houseplant babies. (US$200, uncommongoods.com)

For Impatient Gearheads

PHOTO: F. MARTIN RAMIN/THE WALL STREET JOURNAL

Microorganisms take weeks to do their work. High-tech machines like Vitamix’s Foodcycler, meanwhile, require only hours. While not technically a composter (the definition requires “natural” decay), the microwave-sized device can turn a wider than normal range of organic material into “recycled food compound” in no more than the 8 hours you’ll be asleep in bed. You can add in dairy, meat scraps and even some bones. But be warned: the Vitamix has a relatively tiny capacity of only 2.5 litres, and is less environmentally friendly than methods that don’t require electricity to work. (uS$350, vitamix.com)

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A Dollar Is A Dollar Is A Dollar. Except in Our Minds.

Money On The Mind

Do you care if an assistant at the chemist gives you change in one $10 note or two $5 notes?

Are you more reluctant to spend hard-earned dollars than windfall dollars?

Do you distinguish the “income” dollars paid as dividends on your stock from the “capital” dollars of the value of the stock itself?

Rational investors answer “no” to each of the three questions. After all, money is money, and rational investors can easily distinguish between the substance of money and its form. Hard-earned dollars and capital dollars are no greener than windfall dollars and income dollars.

Normal investors, however, are likely to answer “no” to the first question, but many are sure to answer “yes” to the second and third questions.

All of us are normal investors. For us, the form of money does make a difference. A dollar may be a dollar may be a dollar. But not in our minds.

Sometimes, such normal thinking helps us in our financial lives. But sometimes it hurts us. And understanding the difference between the two—that is, knowing when we’re being smart, even if not rational, and when we’re being neither smart nor rational—can make us better savers, spenders and investors.

Here are some examples of our normal thinking, and when it hurts and helps us:

Framing money into pots

We regularly divide our paychecks into pots. Sometimes they are tangible pots, such as checking accounts or glass jars. Sometimes they are virtual pots, such as Excel sheets or mental pots in our minds. We mark each pot with a label such as rent, food, entertainment, Christmas gifts or emergency funds, and refrain from dipping into pots other than designated ones.

Of course, none of this is rational. Rent dollars aren’t any greener than entertainment dollars. Rationally, they should all be in one pot labelled “money.”

Yet this practice is smart when it makes budgeting easier and prevents bounced checks and disappointed children on Christmas morning. For example, one couple I read about maintained a joint account and two sets of checking and savings accounts—one for daily expenses, such as groceries, and the other for larger expenses, such as taxes. The wife was responsible for paying daily expenses from one account and the husband was responsible for paying larger expenses from the other. The idea was to make sure they always had enough for both groceries and taxes.

Rational? No. Smart? Yes.

Of course, refraining from dipping into pots other than designated ones requires self-control. Yet this is difficult when we face temptation, such as using money in the emergency pot for entertainment. One smart way to bolster self-control is to place obstacles in the way of pots other than designated ones.

For example, one woman who contacted me put her money in a bank that is an hour’s drive away, and cut the bank’s ATM card.

Similarly, the government places obstacles to dipping into retirement pots by generally imposing a 10% penalty on withdrawals from defined-contribution retirement saving accounts on those younger than 59½.

Again, none of this is rational. A dollar is a dollar is a dollar. But thinking about the form of those dollars can make us financially healthier.

Except not always. Sometimes self-control is too strong rather than too weak, preventing reasonable dips into ample capital pots. That’s especially true for retirees who have plenty of money, but have spent a lifetime cultivating a saving mantra: Never dip into the capital pot. Now at the very time when they should be doing just that to enjoy life, they can’t bring themselves to do it. They continue to spend only the income they derive from their savings, and their lives are more constrained as a result.

Rational? No. Smart? No.

Distinguishing hard-earned money from windfall money

Easy come, easy go.

We regularly distinguish money earned with much effort, such as salary, from windfall money obtained with little or no effort, such as gifts. We tend to place hard-earned money in one mental pot and windfall money in another, and we spend windfall money more easily than we spend hard-earned money.

That distinction also affects our willingness to take risk. In one set of experiments, people were divided into two groups, hard-work earners and windfall receivers. People in the hard-work group received an amount of money for completing work requiring physical effort—peeling 25 potatoes or making nine envelopes within 30 minutes. People in the windfall-receiver group received the same amount of money as a gift, with no work requirement. Subsequently, people in the hard-work group made less-risky and less-impulsive choices than people in the windfall group.

Rationally, of course, it makes no difference whether somebody receives money from a windfall or hard work. It may also not be smart if it leads recipients of windfalls—whether bonuses, bequests or lottery winning—to fritter away these windfalls on meaningless purchases or risky investments. Then again, it could be smart if you’re a person who is not spending as much as you should because of an unwillingness to tap money from a large account. If thinking differently about “extra” money makes you more likely to spend what you can afford, go for it.

Tripped up by the ‘money illusion’

Money illusion refers to the failure to distinguish dollars framed as “nominal” from dollars framed as “real”—that is, after inflation. For example, a 2% increase in a nominal annual salary, say from $100,000 to $102,000 is a 1% decrease in the real annual salary when the annual inflation rate is 3%.

Rational investors are immune to the money illusion, but many normal investors are not. And that is not to the benefit of the normal investor.

We see the distortions caused by money illusion in the current concern about the low yields of bonds. For example, the average nominal yield on 3-month Treasury bills during the first nine months of 2020 was a meager 0.42%. The real yield is even lower, a negative 0.98%, because the rate of inflation during the period was 1.40%. Indeed, inflation has exceeded Treasury-bill yields in most years since 2002.

Yet there was less concern in 1979 when the nominal yield on 3-month T-bills was 10.07% and the rate of inflation was 12.26%, implying a negative 2.19% real yield. This is because many normal investors are misled by the money illusion, comparing the low 0.42% nominal yield of 2020 to the high 10.07% in 1979, while neglecting to note that the real yield in 2020, while negative, is higher than in 1979.

Moreover, 1979 investors paid higher taxes on a 10.07% yield than 2020 investors pay on 0.42%. Investors tend to overlook this 2020 tax balm.

Framing money in nominal terms is easier than in real terms because it does not require knowledge of inflation rates and how to use them to convert nominal dollars into real ones. Yet such framing is not smart when it misleads us to act as spendthrifts when high inflation pushes nominal interest rates up, and as misers when low inflation presses nominal interest rates down.

Spending company-paid dividends but not ‘homemade’ dividends

Investors holding shares of a company have two ways to derive money from these shares. Say you need $1000. You can receive a $1000 company-paid dividend. Or you can create a $1000 homemade dividend by selling $1000 of shares.

Rational investors would prefer homemade dividends to company-paid dividends because they can time homemade dividends when it is best for them, whereas timing of company-paid dividends is in the hands of the company. Also, taxes on homemade dividends are likely lower than on company-paid dividends. Homemade dividends do involve transaction fees as investors sell shares, but these fees are now pretty close to zero.

Many normal investors, however, prefer company-paid dividends to homemade dividends.

That can be both smart and not so smart.

Normal investors have two distinct mental pots: “income” and “capital.” Company-paid dividends, like wages, belong in the income pot. Shares, like other savings, belong in the capital pot. The self-control rule many people live by is to “spend income but don’t dip into capital.”

Thinking of the money as being in two distinct pots is smart when self-control is too weak to protect savings from excessive spending. A $1,000 company-paid dividend places a definite limit on the amount that can be spent, whereas a $1,000 homemade dividend opens the door to selling and spending, say, $2,000 of shares when a tempting vacation overpowers weak self-control.

Still, dividing money this way can backfire. To understand why, consider that an anticipated pain of regret is another reason for preferring company-paid dividends to homemade dividends. Imagine that you received $1,000 as a company-paid dividend and used it to buy a TV set. Compare it to creating a $1000 homemade dividend by selling shares to buy a TV, only to find that the price of shares zoomed soon after you sold them. The pain of regret is likely greater with homemade dividends because you bear responsibility for selling shares when you did, whereas you don’t bear responsibility for the company paying dividends when it did.

But the pain of selling stock—and then watching the price rise—should not be determining which form of money we “prefer” when we need $1,000. Stock prices do not zoom after we sell shares just because we sold shares. It’s just bad luck.

Avoiding selling stock and waiting for dividends because of the fear of regret may be what a normal investor would do. But it isn’t rational. And it probably isn’t smart.

Preferring ‘bond ladders’ to bond mutual funds

A bond ladder is composed of bonds of a range of maturities. For example, a $10,000 bond ladder can be built by allocating $1,000 to each of 10 Treasury bonds with maturities ranging from one to 10 years. The alternative is to place the $10,000 into a Treasury bond mutual fund.

In substance, a bond ladder is a “homemade” bond mutual fund with average maturity equal to that of a corresponding bond mutual fund. The value of a bond ladder declines when interest rates increase, as much as the value of a corresponding mutual fund. Therefore, rational investors are, at best, indifferent between the two if their costs are the same (more on that in a minute).

Many normal investors, however, prefer bond ladders because they can manage them in ways that reduce regret.

Imagine that you hold a bond ladder with 10 bonds with maturities ranging from one year to 10 years. You bought each of them at their $1,000 face value. Nine months pass, and you need $1000 to buy a TV set. Meanwhile, however, interest rates increased such that the prices of all 10 bonds are now lower than $1,000. If you sell the one-year bond you’ll receive, say, $995. Adding $5 to the $995 will not squeeze your budget too much, but realizing a $5 loss inflicts the pain of regret. A bond ladder gives you the option to wait three months until the one-year bond matures and receive $1,000, avoiding the pain of regret.

Bond mutual funds do not afford this waiting option. You cannot be assured that you’ll be able to avoid realizing a loss, no matter how long you wait.

None of it makes a difference to rational investors, because they know that a “paper loss” is no different from a “realized loss.” Sure, delaying realized losses may keep regret at bay, but it has no financial benefits. Indeed, rational investors prefer to realize losses, whether in a ladder or mutual fund, because realized losses become tax deductions, yielding them extra money. And waiting three months (or however long) to get the money you need means you won’t be enjoying whatever you need to use that money for.

What’s more, rational investors would ask themselves: Why build a Rube Goldberg bond ladder, when low-cost index bond mutual funds are simpler and likely cheaper, don’t require homemade construction, and don’t have the extra trouble of monitoring and replacing bonds that reach maturity with new bonds?

In other words, it is normal to try to avoid the pain of regret, but such avoidance can be costly.

Normal? Yes. Smart? No.

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Future Returns: How Impact Investors Balance Objectives

Future Investments

Impact investors aim to achieve specific, positive social or environmental goals such as creating more affordable housing, or reducing reliance on fossil fuels, but they do so to earn market returns too, while weighing other standard investment considerations such as risk and liquidity.

That’s a key finding of “Impact Investing Decision-Making: Insights on Financial Performance,” a report published last week by the Global Impact Investing Network (GIIN) that assesses investor attitudes toward financial performance based on outstanding studies by outside firms and an analysis of financial performance that was gleaned from its annual survey of impact investors.

“What’s important here, and what we’re delighted about, is that financial performance is an important consideration for impact investors, but they are really looking at it taking into account a number of considerations,” says Dean Hand, director of research at the GIIN.

To weigh impact alongside performance is not unusual in the sense that traditional market investors also weigh a number of things. Risk and return, for instance, are factors commonly taken into consideration in balance with one another.

To invest in an emerging market company might lead to higher returns than a similar investment in a U.S. firm, but it’s riskier, bearing a higher potential of falling apart, so investors have to decide how much risk they are willing to stomach to get the returns they want.

The GIIN’s survey results have shown that impact investors generally get the balance they are seeking—nearly 88% in the most recent survey say that their portfolios meet or exceed their expectations for returns.

But when investors care about creating a positive social or environmental impact, they also weigh traditional investment considerations, such as liquidity—do they need their investment cash back soon or can they wait? If the latter, an investor may be more willing to invest in a private equity fund with a longer time horizon, and a different set of impact outcomes than might be available via a green bond, for instance.

If they are a more conservative investor, too, not willing to shoulder a lot of risk—a highly rated green bond may be just the thing.

The Importance of Manager Selection

The GIIN’s report looked at how impact investments in private markets have performed, culling data from available research by groups such as Cambridge Associates and Symbiotics as well as its own investor survey.

Private-equity impact investments, for instance, can deliver high returns, outperforming the S&P 500 index by 15%, according to a study by the International Finance Corp., although a University of California study found the median impact fund had an internal rate of return (IRR) of 6.4% compared with 7.4% for the median “impact-agnostic” fund.

And results can vary widely. The GIIN’s survey data showed that the top 10% of private-equity portfolios in emerging markets had realized returns of more than 29% while the bottom 10% had returns below 6%.

As a result, the GIIN finds that fund manager selection matters, not just in terms of quality, Hand says, but in helping the investor understand “whether or not they are achieving what they want both in terms of financial performance and impact performance.”

Investors also have to ask the right questions, Hand says. For example, it’s important to ask questions like: What specific impact results a manager is getting? How are those results measured? How do you convey this information to investors?

Where these have been successful, particularly in impact investing, is where the AO and AM work together to derive what results they are looking for, what their objectives are, and how they are going to report on those results.

“Good asset-owner and asset-manager relationships are built on a close working relationship,” Hand says. “Where these have been successful, particularly in impact investing, is where the asset owner and asset manager work together to derive what results they are looking for, what their objectives are, and how they are going to report on those results.”

Performance in Private Debt, Real Assets

According to the report, private debt funds focused on impact have tended to provide low-risk returns, as most investors expect, while delivering stability as well as diversification to impact portfolios.

The GIIN survey data showed average returns for impact debt funds ranged from 8% for developed market funds to 11% for emerging market funds, while Symbiotics data found a weighted average yield of 7.6% for fixed-income impact funds, the report said.

Investing in real assets, such as real estate and timberland, can lead to good returns, but the results vary widely depending on the time horizon as well as the type of investment, the report found. Investors surveyed by the GIIN reported returns ranging from 8% to 23%—again, pointing to the need for investors to select the right asset managers.

Case Studies

To give a sense of how experienced impact investors balance all these factors, the report offers examples from five experienced impact investors.

IDP Foundation, a private nonprofit focused on access to education and poverty alleviation, invests for impact from its endowment as well as through program-related investments. The foundation cares about achieving high impact but also competitive, market-rate financial returns.

The GIIN looked at five major factors the foundation weighs before deciding on an investment: financial return objectives, impact objectives, financial risk, impact risk, resource capacity, and liquidity constraints.

It turns out IDP considers its financial return and impact objectives to be “very important,” while financial risk—or the volatility of expected returns—and impact risk are “important.” The foundation’s resource capacity is less important, as it leans on a consulting firm as an advisor, and screen service to make sure it doesn’t invest in anything that violates its impact goals.

“What we hope by these spotlights is that it will give investors an idea of how those things are actually playing out so they can match that in their own decision making,” Hand says.

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Oil Producers Are Curbing Supplies. Expect The Oil Rally To Continue

Increased global demand, together with recent supply cuts, could spark a more than 20% rally in oil prices this year, experts say.

“We expect prices to peak at $65 and remain in the range $55 to $65,” says Art Hogan, chief market strategist at National Securities Corp. in New York.Futures contracts for light sweet crude were recently fetching $53 a barrel on the Commodities Mercantile Exchange.

Traders wanting to profit from the potential rally should consider buying June-dated futures contracts for light sweet crude on the CME. Alternatively, they could try purchasing the Invesco DB Oil exchange-traded fund (ticker: DBO), which holds a basket of crude oil futures. The fund has gained 7.5% this year through Jan. 11. It lost 21% in 2020, according to Morningstar.

This year crude has already rallied about 9%, due in part to an unexpectedly bullish move by OPEC+ (the Organization of the Petroleum Exporting Countries plus Russia) earlier this month.

The world’s second-largest producer, Saudi Arabia, surprised the world by announcing it would cut production in February and March by one million barrels a day (bpd). That move more than offset a combined 75,000 bpd increase for the same period by Russia and Kazakhstan.

Overall, the OPEC+ cut should help put a floor under prices, especially given that the member states will probably stick to their quotas. “We don’t see material risk to the group’s [OPEC’s] cohesion,” Barclays said in a recent report. Historically, OPEC members have often failed to stick to their production quotas, making price stability an issue.

Meanwhile, demand from China is higher than pre-pandemic levels. In the third and fourth quarters of 2020, the country consumed 13.7 million and 14 million bpd, respectively. That compares to an average of 13.3 million in 2019, according to OPEC.

Traders will likely bet on a rebound in demand for the rest of the world as Covid-19 vaccines allow people to return to business as usual. “My sense is that as we get back to a more normal society, we get a massive surge in people wanting to go flying and do things they could do before the pandemic,” says Jon Rigby, an oil analyst at UBS London. Such a scenario would mean an increase in oil demand, with air and land travel resulting in higher fuel consumption.

Oil prices will get an additional boost from a softer dollar. “My general view is that we won’t have a stronger dollar,” says Steve Hanke, professor of applied economics at Johns Hopkins University. “Automatically, a little bit weaker dollar will add a little bit of strength to the oil price.” Oil gets priced in dollars, which means that in general, when the dollar weakens, crude prices tend to rally.

A price rally will likely be tempered by increasing supply from shale producers in North America, says Hogan of National Securities. While the Biden administration will likely reduce drilling on federal lands, there is still a lot of potential supply ready to tap when crude prices approach $60. “There is plenty for us in the next two years to increase our supply with hydraulic fracking,” he says.

Buying any commodity futures contract is a risky endeavour, and oil futures are no exception. The price of crude is subject to influences by national governments, geopolitical upheaval, and changes in the global economy. All these can result in significant price volatility.

Despite that, the odds looked stacked in favour of a rally in crude prices over the next few months. “We see prices going higher, if not meaningfully higher,” says Daryl Jones, director of research at Hedgeye Risk Management.

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Ten Global Consumer Trends For 2021

10 Trends

Many of the new habits consumers formed during the coronavirus pandemic are here to stay, market researcher Euromonitor International predicts.

In 2021 consumers will be demanding, anxious, and creative in dealing with change, Euromonitor forecasts in its annual trend report. People will expect increased activism from brands they use, new options for digital services in their daily lives, and more help in achieving mental and physical wellness.

Though some of this year’s trends are directly related to Covid-19—like heightened safety concerns and demand for more open-air spaces—these shifts will continue after the pandemic wanes, says Alison Angus, Euromonitor’s head of lifestyle research. “These changes happened so quickly and have quickly manifested for the long term,” she says.

Euromonitor, a global market-research firm based in London, has released its forecasts since 2010. Last year, just three months after publishing its January 2020 predictions, it revised its expectations to reflect dramatic shifts in consumer behaviour spurred by the pandemic, flagging new trends like the home’s transformation into a multifunctional refuge used for work, school, leisure and exercise. It also noted the pause of other trends like previously rising privacy concerns.

Its forecasts haven’t always come true, at least so far: Euromonitor’s 2018 prediction that DNA-informed personalized nutrition and skin-care products would quickly accelerate didn’t come to pass because such regimens remain too onerous, Ms Angus says. Last year’s expected boom in demand for reusable products also didn’t materialize amid consumers’ sanitary concerns during the pandemic. “Sustainability really took a hit last year,” Ms Angus says. “But I think consumers are reverting back to it.”

Here are some of Euromonitor’s predictions for this year’s big global consumer trends:

More Brand Activism

Consumers paid closer attention to companies’ actions during the covid-19-fueled lockdowns and will take social and environmental issues more seriously after the pandemic ends, Euromonitor says. People will increasingly demand that companies protect the health and well-being of their workforce, help local communities, and promote ambitious sustainability goals. During the pandemic, “all of a sudden the air cleared, wildlife came out to play and everything was so much nicer,” says Ms Angus. “It’s made consumers realise that actually we want this greener, cleaner climate.”

Spontaneity and Convenience

People miss the spontaneous activities and impulse purchases of their pre-pandemic life—running errands, attending social events, dining out—and they want digital commerce to offer a similar experience, the market researcher says. (It also noted that younger consumers prefer digital interactions while 68% of consumers over the age of 60 prefer speaking with human customer-service representatives.) “We really want that on-the-go coffee, that walk and stop for lunch somewhere, that flexibility and ease,” says Ms Angus. “Companies have to find alternative ways to enable that spontaneity in some form.”

Open Air

Even after the pandemic, people’s desire for outdoor spaces for work, events and recreation will remain strong, Euromonitor says. “Businesses need to create their own outdoor oasis,” the report says. “Adaptation might become more complicated and costly depending on the weather, but open-air structures and heating and illumination systems will pay off due to heightened demand for safe venues and the aesthetic that could continue attracting consumers.”

Physical and Digital Worlds

Video calls, connected appliances, smart phones, and technology such as augmented reality have helped consumers stay virtually connected during the pandemic despite being physically separated. Time spent straddling physical and digital worlds is what Euromonitor calls “phygital reality”—a hybrid where consumers seamlessly live, work, shop and play both in person and online. Offering new ways for consumers to combine digital and physical capabilities—say, personal-shopping appointments via video conferencing—will be necessary for businesses to boost sales (and collect data on their customers). Consumers quickly embraced “phygital reality” in the pandemic, but its use will remain long after, Ms Angus says. “Our kids don’t even think about whether something has technology or not, they just expect even a stuffed toy to have interactive technology,” she says. “As those generations become older, it becomes the new normal.”

New Schedules

Staying home more has pushed consumers to be more creative with their time and more deliberate in organizing their daily schedules as they juggle their work, family, and personal lives. So much multitasking means that consumers now expect businesses to offer more flexibility, too. Euromonitor predicts that consumers will demand a 24-hour service culture. “As more and more consumers try to cram more into their day, they’re trying to get time back through services and products that help them do it,” says Ms Angus.

 

Revenge Spending

Many people are distrusting of leadership and government, and bias and misinformation are feeding a crisis of confidence, Euromonitor says. That’s driving some consumers to rebel by placing their own needs and wants first. Lockdowns world-wide have led some to “revenge shopping,” or splurging, after being homebound for months, as well as seeking out illegal parties and online gambling, Euromonitor says. Affordable luxuries like alcoholic drinks, indulgent packaged food and video games are also on the rise. “Revenge spending is evident among those who can afford it or have saved money from being homebound and not going out,” says Ms Angus. “These consumers are spending on indulgences for themselves or their homes in order to make them feel better.”

Thoughtful Frugality

In contrast to those who want to splurge, another group of shoppers is suffering financial hardships from job losses and economic instability that is forcing thrifty spending behaviour, Ms Angus says. Some consumers will identify with both trends, she says, trading down on some items in order to be able to spend more on others, like affordable luxuries and experiences that boost their physical and mental well-being during this crisis. This “trading down to trade up” is an accelerating trend during the pandemic. “Thrifty yet restless consumers are reviewing and adjusting their spending to support diverse and contradictory needs,” says Ms Angus.

Safety Obsession

Safety is the new wellness movement, according to Euromonitor. Frequent hand-washing and wearing masks have become widely normalized habits, and contactless payments became more common as people shy away from handling unclean cash. “Consumers will be more fearful going forward about any future health concern,” says Ms Angus. “I think we will care a lot about safety for a long time.”

Greater Self-Awareness

The global pandemic forced consumers to reconfigure their lives and test their mental resilience amid health risks, economic hardship and isolation. Now they are reassessing their priorities, identities and work-life balance, Euromonitor says. Targeting these consumers includes offering access to goods and services that promote self-improvement and lifestyle balance. Global sales of educational, hobby-related toys and games, musical instruments, sports equipment and nostalgic comforts like childhood snacks are expected to rise.

Working From Home Evolves

The trend of working from home was already on the rise before the pandemic, but last year’s social-distancing measures made it a reality for many overnight. When the pandemic lifts, many people are expected to continue working from home, at least some of the time, for the long term. This shift affects many aspects of daily life, from technology spending to eating habits to clothing choices. Loss of commutes and office workplaces limit spending on coffee runs, lunch breaks and socializing with colleagues after work. Though workwear and beauty routines have become more casual, food and beverage purchases could become more high-end as people try to create restaurant-quality meals at home, Euromonitor forecasts.