What does the future hold for interest rates?

Posted on Wednesday, March 24, 2021
“What’s going on with interest rates?”   It’s one of the most common questions I get, and the answer needs to take two factors into consideration: 1.     What’s the RBA planning to do? Answer: nothing, for a least a few years. 2.     What will the banks do? Answer: they’ll look to shift fixed rates sooner rather than later. Remember, a low cash rate (set by the RBA) means home loan rates will remain low, but right now the bond market is arguing with all central banks that they globally can’t keep interest rates around current low levels. The RBA says wages will need to take off before they’ll look to raise interest rates. And to keep interest rates in the bond market down, it has been buying three-year bonds, which simultaneously drives their price up and keeps interest rates down.   Fortunately, you don’t need to understand how the bond market engages with central banks, but the bottom li ... Read the rest of entry »

JobKeeper's about to end - buckle up for a bumpy ride!

Posted on Thursday, March 18, 2021
D-day is just 11 days away. That’s when JobKeeper ends and those relying on it to keep them afloat, will be left to sink or swim.   We’ve known for a long time it’s coming but it is going to be a huge shock to a lot of people who are not prepared, and a lot of businesses that are not financially able to keep people on the books without support.   The government has had plenty of time to implement more targeted support but for a lot of people it simply won’t be enough.   The mood isn’t so dire though. Most people feel buoyed by the increasing value of real estate. Only yesterday on Channel 9 we were told that Australia's property market has recorded its strongest rise in almost five years, with the average price of a residential home now more than $720,000. New figures released yesterday from the ABS found residential property prices rose in all capital cities in the December quarter of 2020.   This is simple outcome of increased demand and li ... Read the rest of entry »

Single? My top 5 tips for securing a home loan

Posted on Wednesday, March 10, 2021
It’s a common perception that in order to convince a bank to give you a mortgage, you must have access to two incomes in order to service the loan.   Interestingly though, new statistics from the ABS suggest that’s not the case, with 25% of houses sold in Australia, sold to single people.   In addition, for several years the stats have shown that single women buy houses at double the rate of single men. Young women find that in some cases buying is as affordable as renting, while older women may seek a home solo following a divorce or the death of a partner.   Little over 30 years ago, a single woman needed a male guarantor to secure a home loan. Fortunately that’s changed, but the process for any single person can still be a challenge.   Here are my top five tips for winning over the bank:   1. Have a savings history – Showing that you can manage your expenses and save money i ... Read the rest of entry »

Using JobMaker to stimulate business growth

Posted on Thursday, March 4, 2021
As JobKeeper draws to a close this month, businesses are going to need to find new ways to stimulate their survival and growth. I know it may not make a lot of sense on the surface but hiring one or more new employees might be a good way to do that.   What I’m referring to is the government’s JobMaker hiring credit. It’s been designed as a pseudo-replacement for JobKeeper, by compensating businesses for creating jobs.   In the past week I’ve assisted a business to recruit a new team member and apply for the credit and it’s surprisingly straightforward! It’s in the same section of the government’s business portal and can be completed in just a few clicks.   In order to qualify, a business must increase its headcount and payroll. To be eligible, new employees must: be 16 to 35 years old; commence employment between 7 October 2020 and 6 October 2021; work or be paid for an average of at least 20 paid hours per week during the re ... Read the rest of entry »

Another (alleged) financial fraudster: how could this happen again?

Posted on Wednesday, February 24, 2021
You have to wonder how this can happen. Or should I say, happen again?   Despite all the royal commissions and compliance requirements that have come about as a result, somehow a financial advisor has managed to (allegedly) defraud her clients of $25 million.   Sydney financial adviser (except she wasn’t a financial adviser, because she wasn’t licensed) Melissa Caddick has been accused of using investors’ money to fund her lavish lifestyle, including luxury goods and jewellery.   The Sydney Morning Herald has reported that from 1 January 2018 until 18 September 2020 a total of $20.279 million was deposited into Caddick’s accounts and she has since withdrawn all but $700,000 of that.   She vanished in November last year when ASIC froze her accounts and seized a million dollars worth of bling.   As a 25-year licensed financial adviser and 21-year Certified Financial Planner, stories like this send a shiver down my spine. So as an investor ... Read the rest of entry »