Not so long ago one of the most effective, low risk wealth creation strategies was to use spare savings to pay down a mortgage, either directly or via the well disciplined use of an offset account. If your mortgage interest rate was 8% per annum, that’s the effective, after tax investment return this strategy delivered, […]
Archive for the ‘Debt Management’ Category
Is paying your mortgage off quicker really the best option?
By admin • January 8th, 2020How much Income do you need in Retirement?
By admin • July 2nd, 2019Many people will say that they are dreaming of retirement, but some are not taking the necessary action to make it a reality. In fact, there are not too many people who know the answer to a straightforward question: How much income do you need in retirement? Let’s take a look at what the Association […]
Buy now; pay later; manage carefully
By admin • November 28th, 2018Before heading off on an overseas holiday, Sam decided to buy an expensive new camera to document his travels. The camera store offered a ‘buy now, pay later’ option, and attracted by the ‘no interest’ promise of the credit provider, Sam signed up. All was well to begin with. Sam had a great time on […]
Are falls in interest rates good or bad for homebuyers?
By admin • May 30th, 2017
A fall in interest rates is usually greeted with delight by homebuyers. The lower the interest rate the less the mortgage repayments on a particular house, right? Well, maybe. However, lower interest rates also mean borrowers can service a bigger loan. In a competitive housing market that can push up prices. So, what’s really going […]
Tap and go – is it too easy to use our credit cards?
By admin • May 30th, 2017
Talk about hammering the plastic. In November 2016 Australia’s 16.7 million credit card accounts were used to make 226 million transactions with a total value of $27.8 billion. We are currently paying interest on $32.2 billion worth of credit card debt, running up an annual interest bill of over $5.6 billion (that’s $5,600,000,000!). It’s not […]
Super or the mortgage?
By admin • November 29th, 2016Many people wait until their home loan is paid off before investing more in super. However, if you are currently making more than the minimum home loan repayments, you may be better off when you retire if you make additional super contributions instead. Why super? There are two key reasons why topping up your super […]
Offset accounts: A better way to manage your mortgage
By admin • November 29th, 2016If you want to repay your mortgage quickly and still have easy access to your additional repayments, an offset account may be worth using. What’s an offset account? An offset account is a transaction account that is linked to your home loan and the money you deposit in it offsets the loan balance before interest […]
Keys to de-stressing a mortgage
By admin • October 26th, 2016“Don’t sail out farther than you can row back.” This Danish saying is sound advice for anyone thinking of borrowing to buy a home, particularly now that interest rates are low and house prices are generally rising. According to a paper (1) for the Centre of Policy Development and University of Canberra, Australians have a […]
A tale of two retirements – which would you choose?
By admin • September 15th, 2016Sam and Sally Smith have worked hard all their lives, paid their taxes and, now they have retired, they feel they are entitled to a full age pension. Jan and Jim Jones have also worked hard and paid their taxes. However, concerned that Australia’s aging population and ballooning pension bill will make it increasingly difficult […]
What is an annuity?
By admin • September 15th, 2016The term ‘Annuity’ is often mentioned in the financial press or TV advertising, but what actually are annuities and how do they work in practice? The word annuity itself originates from the meaning ‘annual’ and can by definition, be described as ‘a yearly allowance’. To explain them in plain English is as a ‘really long […]