Borrowing capacity has probably never been tighter in the 20 years since I started ProSolution! This is delaying investment plans for some clients. However, I expect this to be temporary and an easing in borrowing capacity might not be too far away. How borrowing capacity rules have changed over recent years In 2019, the banking…
A Goldilocks investment strategy means that you are making the most of your financial opportunities without overdoing it and taking unnecessary risks. That is, your level of investing is exactly right (i.e., perfectly balanced). Underinvesting means that you risk not having enough investment assets to enjoy a comfortable retirement. Overinvesting means that you have taken…
Many lenders are taking a number of weeks (sometimes months) to approve loans at the moment. These delays have been caused mainly by significantly higher mortgage application volumes and the operational disruption from onshoring back-office services due to Covid lockdowns in the Philippines and India. As such, banks are prioritising applications for borrowers that have…
In my book, Investopoly, I outlined 8 investing rules that if followed, will help you build wealth and avoid making costly mistakes. These 8 rules are evidence-based which I have refined over the past 20+ years. Rule number one is; to play the long game. Arguably, it’s the most important rule because I’ve observed that this is…
In mid-2021, I wrote this blog: “Don’t buy a property in this market…” because, at that time, many property buyers were over-paying for a property just to get into the market. I call it the FOMO premium, for lack of a better term (more about this below). My thesis was that since it’s never wise to allow…
Even though it’s compulsory to invest money in superannuation, many people do not understand their options once they retire. This blog provides a summary. However, of course, everyone’s situation is different. Some super funds have different rules and there may be exceptions to some rules, so it’s important you receive personalised advice from an independent…
I think we need to be prepared for the possibility that the next couple of years might be a bumpy ride in terms of the economy, financial markets, interest rates, and so forth. The media thrives on higher levels of uncertainty, so be prepared for plenty of doomsday predictions and lots of negativity. The silver…
If Australia slips into a recession, it will most likely be the RBA’s fault. It has completely botched the management of interest rates to the detriment of borrowers, the economy, and the bond market. Here’s why… In its defence Firstly, in the RBA’s defence, it has been navigating uncharted territory over the past 2.5 years….
Some investors have been spooked by the RBA hiking interest rates over the past months, particularly since it has spent the past two years telling us that rates would not rise until 2024. Higher interest rates at the same time as rising prices (inflation) are a two-fold blow to household budgets. Where are interest rates…
Vocal market commentator and fund manager, Chris Joye wrote in the AFR in November last year that Australian house prices could fall by 15% to 25% after the RBA starts increasing interest rates (here’s a copy of that article). Of course, there are many property doomsayers that perpetually (and often inaccurately) predict property market crashes….
