Are the savings in our bank safe?

Q. I am wondering about savings we have with Suncorp Bank.  Is it safe or should we pull it out for the time being also which banks have frozen accounts already?

Josie’s answer: If your money is sitting in a savings account within a bank, building society or credit union that is based in Australia, then the Government has guaranteed that you will not lose your money, for the next three years anyway.    You will not find a better guarantor.

Foreign banks may be covered by the guarantee, provided they agree to pay a fee, but this can be a little confusing.  For example, ING’s parent is based in Holland, but they are covered by the guarantee as they have an Australian subsidiary (up to a $1M.  If greater than $1M then they will be charged a fee).

For example, institutions such as Duetche, Credit Suisse do not have an Australian subsidiary in Australia, just a branch office who reports to their parent overseas.   Therefore, different rules apply to them.  Some commentators argue that this is fair as they made the decisions they didn’t want to operate under the same rules and regulations that apply to our banks, building society and credit unions. Read more

Josie v Money Matters listener - understanding economics

Q. I was listening to your program on GoldFM last Sunday morning. I found it amazing the number of incorrect economic statements that were made concerning the federal governments “stimulus”package.

The bottom line is that the so called stimulus will have no impact as it is based on the mistaken belief that consumer spending drives the economy, when in fact business spending is the driver.

Any surplus is held by the Reserve Bank, and is still part of the money supply, so that it is money created out of thin air (as central banks have an addiction to which is one of the causes of inflation), but a draw down in money balances (often erroneously referred to as idle balances). Read more

5 simple ways to avoid overspending at the shops

Beat the Retailers at their own Game

We are all prone to overspending. Ladies, just look at all the clothes you have purchased over the years, and half of them you probably don’t wear. If I calculated how much I have spent just on clothes since I started work at 15 years of age, I would no doubt be horrified (best to stick my head in the sand!).

The men are not going to get away with it either. From my experience they tend to purchase big ticket items, such as big screen TVs, power tools, and stereos. Read more

Podcast - Scott Pape “The barefoot investor”

On Sunday morning 12/10/08 after an episode of Money Matters, Kel and I sat down with the best selling author the ”Barefoot Investor“,  Scott Pape.

Scott shared his thoughts on Generation Y and their problems with credit card debt, how they can save and create wealth, managing mobile phone expenses and whether it is worthwhile seeking financial advice.   An entertaining discussion …. do you know what Twitter is?  A highlight for me, was his comment that personal finance is 80% behaviour, 20% knowledge.  How true.

Scott is a regular voice on National radio (Austereo network) and writes a a weekly column for the Herald Sun, the Courier Mail and the Daily Telegraph.    He is a man who sees it how it is.  By his own admission, he “keeps it real”.

Scott understands that young people growing up are faced with a lot of pressures and, if they are to be successful, they are required to compete in an extremely competitive economic environment, where having a degree is by no means a ticket to a successful career and financial happiness. Read more

 

 Barefoot Investor Scott Pape - Podcast [15:51m]: Play Now | Play in Popup | Download

Our property investment is losing money. Please help.

Q.  Five years ago we bought an investment property in Port Douglas. It is a dual key apartment and is in a complex with 40 other apartments. We pay an interest only loan of over 400k. I am at my wits end because there are only a few months of the year that the rentals pay for the interest payments - around $3000 a month.

My husband and I have used our savings and have withdrawn $25000:00 from his super fund to assist in the payments. If we sold the unit at present we would lose about 80 -100k. We are close to retiring age and don’t want a huge debt hanging over our heads.

The other partner is my sister who can’t afford to put much money towards payments as she is on her own and doesn’t earn a lot of money. We thought that the rentals would cover the payments but with all the competition up there now, the units are rented at a lower price. Have you any suggestions? Read more

How safe is our fixed term deposit with Suncorp?

Q.  How safe is our fixed term deposit of $260,000 with Suncorp that we have deposited for 3 years? I have heard a few rumours that Suncorp could be sold and wonder how safe are our funds a) if suncorp is not sold and b) if suncorp is sold. My husband and I are both now retired and wanted to be sure of our investment.

Josie’s answer:   Lots of rumours flying around at the moment that Suncorp will be gobbled up by the Commonwealth Bank or ANZ.  CBA have already pounced on Bank West.

Oh the poor banks they really seem to be really suffering at the moment (with my tongue firmly in my cheek!).   Suncorp are a second tier bank, which means they don’t have the same rating as the big four i.e. Commonwealth, ANZ, NAB and Westpac. Read more

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