How is your health?
When we think of health we often think about the health of the body and mind.
What about your financial health? How is your financial health?
As a result of all the attention that we are paying to our physical health, the good news is that in Australia we are living longer. As of 2014, we are one of only six countries in the world with a life expectancy over 80 for both males and females. (The other countries are Japan, Italy, Switzerland, Iceland, Israel and Sweden). According to recent ABS statistics, the average life expectancy has increased from 78.1 for males in 2004, to 80.3 in 2014; and from 83.0 for females in 2004, to 84.4 in 2014.
The downside is that in order to be able to enjoy a quality of life, we need to increase our financial resources, so we can live up to the increase in life expectancy.
According to a recent Sydney Morning Herald article, Australia has quite a high cost of living compared to other OECD (Organisation for Economic Co-operation and Development) countries. And you thought that you were just imagining the high cost of living!
Australia’s aged pensioners are second worse off (behind South Korea) out of all the OECD countries, with 36% of aged pensioners living below the poverty line. The average for all the OECD countries is 12.6%.
Compulsory Superannuation contributions were introduced in 1992, which means that a large portion of today’s aged pensioners would have benefited from this scheme. The scheme was introduced as a way of increasing financial resources for retirees and yet, we still have a high portion of the aged living below the poverty line.
Are you taking responsibility for your financial future or are you going to rely on social security payments for your golden years? In the U.S, social security payments are tipped to be exhausted by 2033. How will Australia’s social securities coffers be looking in 2033?
Either way, it is wise to lay the groundwork now, as wealth creation and investment is best viewed as a long term strategy.
Will your golden years be a time of enjoyment or a time of stress?
The time to lay the groundwork is now.
Contact me to discuss how a review of your mortgage can be used as a part of your wealth creation strategy. You might be in a better position than you think to improve your wealth NOW!
It certainly has been an interesting year in the world of Finance & Mortgage Broking - interest rates at an all time low; property prices peaking (in Sydney anyway); decline of the mining sector; China coming to terms with capitalism and the U.S in apparent recovery.
As for next year.....it's anyone's guess.
Either way, we have some exciting news regarding next year....
As we have had such a busy year, we are going to reward ourselves by moving into larger premises early next year. We are still going to be offering the personalised and professional service that you are used to, just out of a different (and larger) space. If you are in the area, feel free to drop in for a coffee and a chat.
Our new contact details, from 18/01/2015:
Suite 1 / 187 Katoomba St, Katoomba (above Kent + Lane)
Phone: 0414 673 359 (same as current)
Landline and fax number: TBA
In the meantime, I would like to wish one and all, a joyous Christmas and an abundant New Year.
Stay safe, stay sane, and I look forward to connecting in the new year.
Are you looking for something to do in the Christmas holidays? Do you need to find a productive activity for the children?
Why not consider doing some improvements or renovations around the house. Here are some ideas to get you started....
Do you need finance for your home improvement project?
You bought your home some time ago and you watch your mortgage decreasing, as the value increases. Do you even know how much your home is worth? It may be worthwhile to obtain a market appraisal from your local real estate agent, as property prices have been on the move lately. The difference between your mortgage amount and your home value is your equity, which can potentially be used to help with funding any improvements or renovations that you would like to undertake.
Contact us for a no-obligation chat, to find out how you can use the equity in your home to help with funding renovations and home improvements.
APRA (Australian Prudential Regulation Authority) has been trying to curb the skyrocketing Sydney market, however it is going to take some time to catch this wild horse. Read about this recent $70 million sale in Sydney
The main action that APRA has undertaken is to restrict lending for investors, in the belief that this will slow down the market. Investor lending has been on the increase for many years now and it is believed that investors are pushing first home owners and other owner occupiers out of the market. However, more gen Y'ers are opting to buy an investment property first, while they are renting or living at home. This means that the line between investors and first home buyers is becoming blurred, so the statistics may not be all that they seem.
APRA has limited the percentage of investment loans that banks are allowed to have on their books. So banks have responded by various actions, such as increasing LVR on new loans and increasing interest rates on existing loans. Each bank varies in its policies and these keep changing on a daily basis, keeping this mortgage broker on her toes!
However, it' not all doom and gloom for investors....There are a number of non-bank lenders that are NOT regulated by APRA who are stepping up to the mark, happy to provide lending for investors.
If are looking to purchase an investment property, don't let the hot Sydney market put a dampener on your plans. Yes the prices are crazy and yes, it's probably not the best time to buy in Sydney. With the media bombarding us with news of the Sydney market, it is easy to forget that there are other property markets all over Australia. These other markets are at various stages of the property cycle, providing many different opportunities for savvy investors.
According to many experienced property investors, the optimum time to purchase is at the 'Start of Recovery' or 'Rising Market' phases. There are many areas around Australia that fall into this category. Of course due diligence needs to be done, and other factors considered, such as rental vacancy rates, rental yield, demographics, infrastructure and employment opportunities. As an example, a quick online search uncovered this dual income property in regional Orange in the low $400k's
When you go searching for your next property, go with the confidence of knowing just how much you can borrow. Despite what the media says, lending for investors is still possible, but it is a matter of finding the right lender for your circumstances. Allow me to assist you in this process.
1. Apply with the right lender first go
Each and every bank has their own opinion as to what types of loans and customers are high or low risks. For example some lenders will not lend to someone who has just started a new job whilst others have no problem at all lending to someone who has only been in their job for just one day!