Money Magazine February 2019

Welcome back. Are you a glass-half-empty or glass-half-full investor? Research says that seeing the glass half full not only makes you happier but also healthier and wealthier. That makes sense given confidence (and capacity) are the main drivers of investing. Feel good about things and you will put plans in place to achieve positive results. Feel bad and you do nothing. Unfortunately, investors will have plenty to worry about in 2019. As our guest economist, Craig James, points out in his column (page 84) the S&P/ASX 200 is a long way off its August high, and the rate at which the Fed has increased interest rates in the US, the relationship between China and the US and slowing global growth will all continue to play on investors’ minds. But the…

Take time out for a cuppa and a winning deal I have been an avid subscriber to Money for seven years now. With a young family at hand, full-time work commitments, rental properties to manage, an SMSF to invest with, insurances to organise and so on, sometimes when my magazine arrives I have only opened the last month’s edition the day before! However, even though the busyness of life is ever present, I ensure that every month I pull at least one project out of Money to improve my family’s budget and finances. In the December-January Best of the Best issue, after reading about the Best Value Mobile Plans – High Usage, I made a cuppa tea at work and simply changed my telco provider from last year’s winner (Moose…

I have been reading with interest the recent commentary on the changed lending behaviours by our banks. I find it intriguing how there is almost a sense of indignation about how the spending behaviour of loan applicants is now being scrutinised and pared back. To be honest, if I were seeking to re-finance in this climate I would find it somewhat humiliating as well. But the reality is that this indignation is merely based on a recent history of lax lending by banks. How quickly we have been normalised to the idea of easy credit! We now think we can just skip down to the bank whenever we want and waltz back with a few hundred thousand dollars to buy our dream home. Think how much better off we would…

PAUL CLITHEROE Paul has been the chairman of Money magazine since its launch. Paul says: “It would be great to have one really nice, custom-tailored suit. I tend to buy the ‘two suits on special’ offers. But the bespoke suits are really expensive and I just can’t bring myself to do it.” TERRY RYDER Terry is the founder of hotspotting.com.au and author of four real estate books. Terry says: “I’ve spent a lot of money on overseas travel throughout my life and right now I have half a dozen bucket-list trips planned in my mind. But currently I’m prioritising investment and debt reduction so I’m forcing myself to delay gratification.” ANNETTE SAMPSON Annette has written extensively on personal finance and she has written several books. Annette says: “There’s a joke…

Normally my Christmas Day is overshadowed by heading to my boat Balance early on Boxing Day to race to Hobart. Our route-planning software “expedition” and weather updates tend to leave me a bit preoccupied. Equally, as pretty much anything fatty and yummy consumed after about noon is likely to be regurgitated as we head to sea into the fast-running south currents, even eating is a little restricted. But this year I took a break from bouncing around Bass Strait and headed to the beach with my family, now rapidly growing with my son and his wife announcing they are due to have a baby this year, my middle daughter’s engagement and a couple of bouncing puppies owned by the kids. Rather than focusing on yachting, I could decide on what…

Last year, the Australian Prudential Regulation Authority (APRA) removed two of the restrictions it had imposed on banks which had made it harder for investors to buy property. In the first half of the year, APRA ended the cap on investor loan growth. A 10% benchmark was introduced in 2014 but APRA felt that this measure had achieved its desired outcome. Later in the year it also removed its restriction on interest-only residential mortgages which was originally set at a benchmark of 30% of all new loans. This measure well and truly achieved its goal as new interest-only loans are currently about 16% of all new loans. The big question is whether this loosening of the reins by APRA will revive property prices. The answer is probably not. The scrapping…