23.10.18 | Millionaires and Uber's IPO.

By Jessica Sier 24 October 2018 4 min read

Newsletter: Published Tuesday, 23 October 2018.

  • Average Australian wealth;
  • Uber's IPO.


Australian average wealth is $579,219 and is growing.

Good news!

You might be next in line to become a millionaire!

The average wealth per adult in Australia is currently sitting at approximately $579, 219, which is the second highest in the world after Switzerland.

And the number of Australian millionaires is set to grow by 41% over the next five years to 1.8 million people, reckons Credit Suisse.

Now before you start muttering “property-something-outrageously-expensive-something-boomer-something-something” it’s not just owning houses that forms the basis of that wealth growth!

It’s superannuation!

(I’ll stop with exclamation marks.)

But remember that compulsory investment portfolio that each and every one of us has?

The one that is steadily accumulating money and is leveraging the enormous churning of global share markets without us having to really do anything?

Hopefully giving us a happy backstop so we don’t have to move in with our kids or live off the government or resort to old-person clowning in order to get by?

That superannuation growth is what’s forming the bulk of our wealth, not the houses we may or may not be able to afford.

And the $2.7 trillion that’s the total superannuation pool in Australia is expected to double over the next decade.

People notice their house prices going up but they aren’t really paying attention to their superannuation balance, which is growing along quite happily.

The guy who wrote the report reckons Australian shares won’t grow as fast as international ones and suggests people look offshore.

Which, as a Spaceship Voyager customer, you’re probably already aware of.

And it’s funny, because it can sometimes feel like we are not getting richer.

How much we all get paid isn’t growing very fast and the cost of petrol and everyday necessities are becoming more expensive.

But if we systematically put money away into the market, rather than have it sitting in cash, we can hopefully piggy back on that global growth.

I mean, at Spaceship, we’re hoping to help you build wealth earlier so you’ve got a few options of how to run your life before you retire.

But I just thought that was a happy reminder that you’re on the right path.

Whether you’ve got a Spaceship superannuation balance or you’ve got a Spaceship Voyager account, it's good to think about ways to give yourself options with your money, so you can happily get on with doing whatever it is you’d like to do with your life.

Note: Some extremely smart-assy folks were quick to point out that being a millionaire isn't actually a big deal these days.

To that, I respectfully say: check your privilege!

Uber's IPO.

This is how investment banking usually works if you want to win a huge client.

You get onside with the company by lending it money and giving it free banking advice.

You butter up their executives by throwing them lavish dinners, playing golf with them and doing helpful things like recommending their kids for internships.

You also provide a polished pitch deck containing insightful analysis of the company’s situation, a thorough valuation of any targets they want to acquire and offer clever strategies for structuring any deals they want to do.

The goal is to get the company to believe you are an investment banking expert! And you will do their deal right!

But, if you’re a technology investment banker, you apparently do things a bit differently.

Rather than convince the company you are an expert - that’s what traditional banks do! - you instead want to show the technology company’s executives you are one of them!

They probably don’t even play golf!

Instead, you want to show them you live and breathe their businesses, just like them.

So, if you are pitching a Lululemon IPO, you show up in yoga pants. If you’re pitching a SpaceX IPO, you do it in a conference room on Mars.

And if you’re pitching for the Uber IPO, you, like, drive Uber:

Mr. Grimes, Morgan Stanley’s top technology banker, has moonlighted for years as a driver for the ride-hailing service, according to people familiar with the matter.

That side hustle—hardly necessary, given his multimillion-dollar Wall Street salary—may help Morgan Stanley win a role on the most hotly anticipated stock-market debut in years.

Now that's commitment.

Anyway, presumably he is just one of many investment bankers who are pitching to run the Uber IPO which is generating a lot of buzz because we are talking some serious money.

Some Uber proposals have valued the company at $US120 billion.

This is nearly double how much the company was valued when it raised money two months ago and is more than General Motors, Ford Motor Company and Fiat Chrysler Automobiles are worth combined.

And of course, because this is technology buzz-land, it’s worth remembering that Uber (and its main competitor Lyft, for that matter) is still deeply unprofitable.

But it’s how fast it is growing that has made it an attractive investment.

There’s no real word on when Uber will IPO.

But in the meantime, to keep that money flowing, Uber also just quietly raised $US2 billion by selling bonds (company debt) in what’s known as a private placement.

This secretive approach bypasses Wall Street’s listed bond market and allows Uber to limit the amount of financial information it needs to disclose. And that information only needs to be disclosed to a small and selective group of buyers.

Unfortunately for the Morgan Stanley guy who’s driving around in an Uber at night in order to maybe run the IPO deal, Goldman Sachs took care of the private placement.

Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.The Spaceship Universe Portfolio and the Spaceship Index Portfolio invests in Alibaba, Amazon, Facebook and Tencent.

Words by
Jessica Sier Right Chevron

Jessica Sier is a financial journalist. Prior to that she led content at Spaceship and was a reporter at the AFR where she discovered that breaking down financial jargon was a public good.

23.10.18 | Millionaires and Uber's IPO.