Finance News

June 30 is approaching - what deductions are you entitled to?

Posted on Friday, June 24, 2022
With a week till June 30 a lot of the conversations we’re having with clients right now are about tax deductions, and what you’re entitled to claim back from the tax man. With tax deductions, every little bit counts. Prepaying your expenses can bring forward your tax deductions so you don’t need to wait another year for your refund. You can prepay expenses such as leases, rent, phone, internet, and business asset repairs, not exceeding more than one year.   One trap that a lot of people fall into is thinking all donations are deductible. They’re not. In order for a donation to be deductible it must go to a registered charity. That means pledges to causes through platforms like GoFundMe are not necessarily deductible, because you’re contributing to crowdfunding something, not donating to a charity.   The last thing to consider is trust distributions for family trusts. This year is proving different with the ATO dropping a Taxpayer Alert, a draft Taxation Ruli ... Read the rest of entry »

What a shocker of a week for global markets

Posted on Friday, June 17, 2022
It would be an understatement to say that the Australian sharemarket has tumbled this week with the latest risk being fears of a US or global recession. And it all comes on the back of rising inflation and to curb it, all global central banks are lifting interest rates with the UK and Switzerland are the latest to make the move both lifting rates in the last 48 hours.  As a result global share markets have been sold off as stocks are considered higher risk than the US dollar or bonds and term deposits. Put simply, everything is becoming more expensive and a lift in borrowing costs is likely to put a dampener on consumer spending and raise expenses for business.  And that is what is priced into the US share market and it is likely to happen here! In terms of markets the big loser has been the NASDAQ is down a massive 39.82% from its highs and that is really masking some much steeper falls because the top 10 stocks make up almost 50% of the index. ... Read the rest of entry »

We called it, and there are more rate rises to come!

Posted on Wednesday, June 8, 2022
I hate to say I told you so.   Last week I suggested you should brace yourself for a 0.5% interest rate increase, and unfortunately, I was right.   For many mortgage holders the days of cheap money are well and truly over, and now we could see families and singles – particularly first home buyers – feel mortgage pain for the first time.   If passed on in full by the banks – which they will – the rate rise will add $133 a month on a loan worth $500,000 over 25 years, and $265 a month on a loan worth $1 million.   And it’s only going to get worse. I’m expecting the RBA rate to be 1.6% by the end of next year, so all mortgage holders need to brace for what is about to hit us.   This morning on 6PR Breakfast I was asked what it means for the average aussie, other than increased borrowing costs. Rather than a decrease in spending, I’m expecting a shift.   If you think about the past few years, we’ve seen a move toward goods s ... Read the rest of entry »

Brace yourself for a shock when the Reserve Bank meets next Tuesday

Posted on Thursday, June 2, 2022
Brace yourself for a shock when the Reserve Bank meets next Tuesday. Here’s why:   The GDP number announced yesterday was 0.8%, far higher than economists predicted for the March quarter.   That, coupled with the soaring cost of living thanks to Vlad The Impaler’s war in Ukraine driving energy and food prices up, and you’ve got a perfect storm. What does that mean for you?  Higher inflation increases the likelihood that central banks will raise rates to curtail runaway prices. The RBA is watching and that certainly leaves open the option that they will opt for a 50 basis point hike next week, which will be passed straight onto your variable loan mortgage. Last week I wrote, "an almost certain increase in rates in June by at least 0.25% but budget for a 0.5% increase - stranger things have happened," - now I think it will happen!   In other news, data out this week show Australian house prices fell 0.1% in May, their first declin ... Read the rest of entry »

NZ lifts rates by 0.5%, US expected to do the same - what about here?

Posted on Friday, May 27, 2022
The other night in the US, minutes from the May 3-4 meeting of the Federal Open Market Committee (FOMC) revealed members saw the need to raise rates faster than the market expected, in order to dampen inflation. The meeting resulted in a 50-basis-point rate hike, which was the biggest jump in 22 years. The FOMC said further such rate hikes would "likely be appropriate" at its upcoming June and July meetings. On Wednesday New Zealand’s central bank raised interest rates by 0.5% for a second straight meeting, and forecast more aggressive hikes to come, again to tame inflation. It’s the first time in more than 20 years that NZ has lifted rates by 1% over 2 months in a row. The NZ Reserve Bank’s Monetary Policy Committee lifted the Official Cash Rate from 1.5% to 2%, with the NZ Treasurer saying labour shortages and cost of living pressures were the reason for the rate hike. This leaves New Zealand at 2% and Australia sitting at 0.35%, but we're both f ... Read the rest of entry »
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