Taming the Inflation Dragon and Understanding why the Reserve Bank must increase Interest Rates

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Don’t worry, I am not about to give you a lesson in economics. I am asked this question quite often and thought I would try and address it as simply as possible.

I can totally understand why most people are baffled as to why the Federal Reserve Bank of Australia raises interest rates when many home owners are struggling to pay the mortgage, have high petrol bills and groceries seem to be getting a lot more expensive.

Why do they have to inflict more pain? One reason is that the Reserve Bank’ is very concerned that inflation is above their target band of 2-3%pa. The latest inflation figure released revealed that the underlying inflation rate was 3.6%pa which was a shocker. The experts are saying that interest rates will have to rise again in March.

Read more

Wealth Creation Tip #1 - Podcast

Some times it’s the simplest things that can save us the most amount of time and money. In our first edition of “Wealth Creation Tips” we look at clutter….

Audio runs for 1 min & 30 sec….click the play button & start saving money:

Who Controls My Super When I Die?

Q. I heard that I can’t control who gets my Super when I die. Is this true?

Josie’s Answer - Well done. You are on the ball. Yes, it is true that you can’t control who gets your super when you die.

It can be ultimately determined by the Trustee of your super fund (some stranger who has never met you!) If you have retail superannuation fund e.g. AMP, MLC etc or an industry fund (not a self managed super fund) it can be challenged in the Superannuation Complaints Tribunal (SCT). Read more

I have a Question about “Wills and Separation”

Q. I am separated and wondering if my will is automatically revoked?

Josie’s Answer - No. However, the rules vary between each State.

We recommend you seek specialist legal advice. Wills should be reviewed every 3-5 years or whenever a major life event occurs e.g. separation, birth of a child. Read more

I need help Consolidating my Super?

Q. I have a few superannuation funds which I am trying to consolidate and finding the whole process very frustrating. Any suggestions?

Josie’s Answer - Congratulations on trying to organise your financial life.

As you know having a few super funds probably means that you are paying extra fees, which will only hurt you financially in the future. There may also be a financial planner or two also receiving some commission and probably not giving you any service.

The problem these days is that you need to provide documents which are certified by an acceptable person. Acceptable documents include your driver’s license, passport, birth certificate (plus many others). Read more

Accountant or Financial Planner - Which is best for me?

Q. I am confused as to whether I need to seek advice from a financial planner or accountant in relation to my investments?

Josie’s Answer - Your accountant is a great help to get through your personal finance maze.

Technically they are really good on tax matters e.g. which work expenses you can claim on your tax, but personal finance is about a lot more than tax. If an accountant does not have an Australian Financial Services License or is one of its authorized representatives, they are not licensed to provide advice on financial products. Read more

Positive or negative gearing - Which is the best way to go?

Q. I am about to purchase an investment property. It is better to positively or negatively gear?

Josie’s answer - I am always puzzled why investors want to brag about their negatively geared investment.

Negative gearing means the expenses you have incurred, such as interest payments and maintenance is more than the income you have received from your property investment. Read more

We’re Having Trouble Saving for a home - Any Suggestions?

Q. My wife & I are finding it very difficult to save for a deposit on a new home. Any suggestions?

Josie’s Answer - This is a very daunting task considering that most new borrowers need to save approximately 10% of the home value in order to get into their first home.

You should you think about opening a high interest savings account (see Rate City) and have a portion for your salary (at least 10-20%) automatically transferred into this account each month. Read more

Am I Eligible For Super Co-Contribution?

Q. I am eligible to receive the $1500 superannuation co-contribution from the Government during the 2007/08 year. When will my superannuation fund receive the payment?

Josie’s answer - The co-contribution is payable when a few administrative processes have been completed.

Firstly you need to lodge an income tax return with the ATO as they need to confirm your total income was less than $28,980 (assessable income, plus any fringe benefits). Read more

Investing in the Australian Sharemarket

Q. Do you think people should put some of their hard earned money into the Australian share market?

Josie’s Answer - Just like investing in property, investing in the share market is a long term commitment (7 years plus, but preferably longer).

The share market does go up and down and that can be nerve racking for investors, simply because everyday on the television the All Ordinaries Index, which represents the top 500 companies is broadcast nationally. Immediately, you will get that warm and fuzzy, sometimes euphoric, but at the other times that glum feeling. Read more

« Previous Page