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There are things that can be taken as almost certain this year – so let’s plan for them.

On the money supply side:

  1. At some stage this year the Reserve Bank will start to reduce rates.
  2. When rates fall by 0.25% it is almost certain that banks will act with their usual pattern and cut by 0.25% for new clients and only 0.15% for existing clients.

No need for you to worry here – I will be able to deal with that for you in my scheduled 6 monthly reviews – it’s what I do for you.

So, let’s turn to getting ahead in life this year.

Labor appears to have changed their position on the “Stage 3” tax cuts – if you earn less than $145kpa, then temporarily the change is in your favour.

If you earn over $145kpa then tax rates of either 37c or 45c will apply and their change acts against you.

Companies pay only 25c to 30c, everyone under $145k pays 30c or less… 30c is a fair rate of tax.

If you earn over $145kpa you should be using the techniques available to you to reduce your tax rate – one of these is investing through property.

In the early years of holding a property the income received will usually be less than the costs to hold it – that loss can be deducted directly against your personal income – reducing your tax bill. This is called negative gearing.

Over time, the income (rent) will rise and when the property is close to neutral it is time to buy another.

Over time, the value of the property will rise (capital gain) – helping you buy another.

Don’t wait for government handouts – if your income is over $145kpa – then take your future into your own hands and create wealth.

My clients cover every stage of life – buying a first home, growing a family in its early years, upgrading your home, covering expenses in the expensive teenage years, turning towards investing in the mid-life years and downsizing towards retirement.

There is no single pearl of wisdom to cover all – beyond – I am here for you all the time, to support you in every stage of your borrowing life.

No matter what your circumstance… I am here anytime on call, txt or email.

Ask Alan, Australia’s mortgage broker for the people.

Servicing clients in; Brisbane, Sydney, Melbourne, Canberra, Adelaide, Perth and New Zealand.