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Use your equity to invest
I previously talked about equity in "use your equity" and looked at using equity to minimise your interest costs. Here, I'll take that a bit further and talk about leveraging on your equity to hopefully improves your wealth by using that equity to invest.
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Use your equity
The other day a friend asked me to help her with a personal loan to pay for her upcoming wedding. She applied for a personal loan with one of the major bank. The loan was approved and the rate offered was something like 14%. My friend was happy to accept the rate but the bank wouldn’t release the money because they wanted receipts to prove that she is spending the money on the wedding! The bank wouldn’t just give her the cash. Very frustrating when you’re planning a wedding! She asked me what she can do to get the cash without having to go through with all the trouble of receipts and bank cheques.
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Balance transfer - what you should know
Let face it, we all have credit card debts. Whether it’s because of over indulgence (maybe you couldn’t resist that nice pair of shoe too many times or a nice Omega watch on sale). The fact is more and more people are carrying credit card debts, the most expensive form of debts. It’s no wonder that there are so many “balance transfer” offers out there. Some offer 0% interest for 6 months, even 12 months. Others will offer you very low interest for the life of the balance transfer, like Citibank’s Ready Credit offering 6.99% for life, sound like a very good deal isn’t it? What’s in it for the bank then?
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what is negative gearing?
Negative gearing is not about making tax losses, far too many people think of negative gearing as a tax strategy rather than a tax effective investment strategy. You’re decision to invest should be based on the potential of the investment making you richer or increasing your wealth in the long term, and giving the tax man less is an added benefit! Not the other way around, you should not enter into a loss making investment purely to reduce your taxes, you may be risking a lot more to save a few dollars in tax.
Take a break with a funny video
In the news
- Finally, some breathing space for debts holders with interest rates likely to fall in the very near future. RBA left rates unchanged but warmed us up for a cut. Maybe by end of year? - Theage. Despite talks of rates likely to fall, the market crashed today with resources stocks bleeding left right and centre. Good time to buy for the brave. The Age. AUD continues to slide as a fall in interest rates is expected soon, Economist are predicting that the AUD will slide further to around 88c by next year! I hope you hedged if you need foreign currencies. - news.com.au. At least there is some good news with oil prices falling, I hope we won't go back to the $1.7 a litre days. Financial Times. and finally, Google Street View available in Aus, hmm what can you use it for? Maybe to check out a house before you actually go there to inspect it? or maybe to stalk someone? I was just wondering, how much did this cost Google? and how can they make money out of it?
Recent Articles
My thoughts
- Brokers
August 5, 2008If you read my article Friends for Foes you probably figured that I am not a fan of the "small time" brokers. With the credit crunch hurting bank's profits, bank have significantly cut back their brokerage rates. Not sure if that's good or bad for the customer, only time will tell. My feeling is that brokers will have more incentive to push you to the highest pay lender!
Another development on the brokerage front is the practice by lenders to shift the brokerage costs to the borrower. This has always been an unwritten rule by the banks however lately this message is being repeated by the people up top! So more reason not to use a broker. Look at it this way, the broker is the middle man, he gets a cut of the bank revenue, the banks can't afford to hand over a large chunk of their revenue to the middle man any longer, so they will try to recoup it from you, the customer!
Here is a real example, I had to charge double for an application fee for a business lend because a broker was involved. If the customer came straight to me, I would have been able to charge them half the application, that's a lot of money!
- today is not a good day on the market
July 18, 2008Despite gains overnight on Wall St, the ASX didn't fair too well today, especially banks and resources. The two industries I am heavily weighted in. Overall my portfolio is down nearly 3% today. Is there an end to this misery? I am an investor not a trader (that's what I tell myself every time my portfolio takes a hit hehhe)
I can take comfort in the fact that most of my stocks are some what blue chips with a few quality speckies in the mix, so I am just waiting for the bull to return. Where is the bull? some body please let the bull out, the bear have been on the stage for too long now.
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