A Budget Thought You Won’t Be Expecting – the THREE mistakes people make.

May 15, 2024

The Council of Social Services (ACOSS) always makes a submission to the budget. This year it notes that the top 10% of Australians have over $5.2 million in net wealth and that the gap between the top 10% and those below is somehow inherently wrong.

It also notes that the top 10% have made their wealth predominantly through property – and with their comments they infer this is somehow inherently wrong too.

My “Budget” in Reply comment is for EVERYONE that aspires to own a home – First Home Buyers and Investors alike.

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What is a “Tracker Mortgage”?

April 11, 2024

A report from a government committee has suggested that Australian Banks be forced to issue “Tracker Mortgages” (Aust Financial Review 27 March 2024).

Australian banks have unsurprisingly pushed back.

A “tracker mortgage” supposedly “tracks” the Reserve Bank cash rate so that your home loan rate remains at a fixed margin relative to the Reserve Bank cash rate.

The benefit is that a borrower will not be left (as currently happens) with a rate stranded high and dry well adrift of where it should be.

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Question of the Week: Inter-generational financial support

March 27, 2024

How best to deal with the worry of inter- generational issues…?

In my email last week, I posed the question of how best to prepare for your own future…

One client asked how they could help their (young) children – not yet born – because of their concerns about what the housing market would look like for them – and their ability to buy a house.

Another client asked how to help parents who had sold everything to live life on the road – but that life had caught up with them and the aged parents were now renting.

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Let’s Start a Conversation…

March 20, 2024

I spent time with long term clients and even longer friends over the weekend.

Here was one part of the conversation – and I’d like you to continue it, along any pathway you choose… more of that later.

“How much do I need to live comfortably in later life?”

Average weekly earnings have just hit $100kpa

How much do I need to have in assets to give that income?

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2024 The Year Ahead

January 30, 2024

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.

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The Melbourne Cup Rate Rise – Why Did it Happen, What Does it Mean for YOU?

November 14, 2023

This time WHY matters.

The 3-year bond rate in the US is 5.30%, the 10-year bond rate 4.65%.

The 3-year bond rate in Aust is 4.35%, the 10-year bond rate is 4.75%.

Banks BORROW to lend to you at the 3-year bond rate (among many other sources) – so money is COSTING the banks 4.35%

They can also borrow (overnight) from the Reserve Bank at the cash rate 4.10% – but the Reserve Bank also needs to borrow that to lend to the banks – so the Reserve Bank is making LOSSES at 4.10%.

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Interest Rates Have Peaked

August 2, 2023

“The balance of risks now favour the prospect that the RBA is now on hold” – Bill Evans (The Australian Wed 2nd Aug 2023)

I predicted quite some time ago that the “peak” of this interest rate cycle would be 6% (to you) and that you should plan around that – and that appears to be correct.

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Well, that was a surprise…

May 3, 2023

Should it surprise us that 100% of economists on Monday became only 70% of economists by Wednesday?

I will carefully analyse what the Reserve Bank board says as well as Bill Evans.

I think it is possible that with this Reserve Bank board undergoing significant change by September that they wanted to fire one last shot – I will write in detail next week.

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The end of this interest rate cycle..

May 3, 2023

It is with a reasonable degree of confidence that I can say that interest rates have peaked (Bill Evans: The Weekend Australian: Sat 29th Apr: page 30).

At the start of this cycle, I suggested that you plan for a peak of 5.5% (and more recently 6% just to cover a worst case).

Interest rates, to you, have now peaked (if I am correct) at just under that 5.5%.

You should now budget for rates at this higher level for a reasonable period ahead.

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An open letter to Banks on behalf of my clients.

May 2, 2023

I am always open to opportunities with new lenders for my new to bank clients.

Under BID (Best Interest Duty) my obligations are clear – and they are obligations on me personally.

Banks have absolutely no obligations under BID.

This means that in the main – our interests do not align.

There is one place they do – new business.

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