Posts by Sandra Morris

Personal Finance: Debt vs More Debt – Are Personal Loans A Good Idea?

So you’ve gotten yourself into a bit of a pickle, and you can’t get out of it without some help. Without a lot of financial options, the easiest solution seems to be taking out a personal loan. But are personal loans a good idea? They seem to be a continued chapter of another financial burden. We take a look at the factors and types of personal loans that could be suitable for you:

A Secured Personal Loan

Having assets such as a house or car can be used as security for the loan. Your provider will take these assets into consideration, and possibly offer you a lower personal loan interest rate, as there is less risk to the provider if there is a loan repayment default. In the event of a default or inability to repay the personal loan, your assets can be legally seized by the lender.

In other words, you will need to make an accurate application with your chosen lender to make certain you are not under financial pressure to pay off the personal loan. It could be a good idea to have repayments automatically deducted from your pay or bank account to guarantee they are made on schedule.

An Unsecured Personal Loan

In this scenario, you won’t have any assets to protect the lender, and your personal loan will incur a higher interest rate. Nevertheless, the same rule of thumb applies, and you need to ensure that repayments are affordable and ongoing for the duration of the loan.

It’s a good idea to compare various lending institutions to make sure you get the best possible deal. A dollar saved is a dollar earned and a step closer to becoming financially solvent.

Interest Rates

As with other types of loans, there are several ways of making repayments. The most popular methods are Variable Interest Rates and Fixed Interest Rates.

Variable interest rates are influenced by the final decisions made by the Reserve Bank of Australia. Changes to the Reserve Bank cash rate filters down to the banks and their customers. Taking out a variable rate is the option to make additional repayments on the personal loan without incurring any additional fees – which can be a major perk. On the downside, the nature of variable means that your interest rate can go up or down at any time, and repayments could become unsustainable if finances are tight.

Fixed interest rates can provide you with confidence in knowing that your repayments will remain steady for the entire duration of the loan. The downside is that fixed interest rates are generally higher than the prevailing variable rate at the time of taking out a loan.

Additional repayments on top of your scheduled repayments may also not be allowed with a fixed rate, or will incur a fee. Extra charges in the case of early termination or a change of loan agreement are also the norm for a fixed interest rate loan.

All information sourced from:

Insurance: Rundown on Life Insurance

Your life is worth the investment and considering life insurance can secure you and your family in times of great need. For example, if you were to leave dependants behind, your policy will ensure they are financially secure and able to meet ongoing expenses.

According to George from Aussie Finance Blog, “everyone is ultimately vulnerable to health complications and accidents, so it’s hard to understand why anyone with available finances would remain uninsured. It’s true that nobody wants to contemplate death for themselves or their loved ones, and when things are going along nicely, life insurance is easily forgotten. However, there’s no denying that life insurance cover could prove invaluable in a time of need.”

Let’s take a look at the different types of life insurance options available and are suitable to your needs:

Term Insurance

The most common life insurance policy is a term insurance. You are able to choose the length of your insurance plan, with policies generally set for a period between 10 to 25 years. The agreed payment, or ‘sum assured’ is agreed upon when you take out the policy, but remember to read the fine print as some policies don’t pay out if you die soon after taking out cover. If the set policy time-frame expires before you die, there is no pay out. There are several term insurance variations:

  • Level term insurance: The ‘sum assured’ amount of cover remains the same for the duration of the policy.
  • Decreasing term insurance: Your pay-out will reduce over time, usually in keeping with reduced mortgage repayments or other debts.
  • Increasing term insurance: Your pay-out increases over time to keep pace with the cost of living, and is usually pegged at 5%, or in line with inflation.
  • Guaranteed premiums: Your payments will remain the
    • same over time, assisting you with budgeting.
    • Reviewable premiums: This can be less expensive initially, but is subject to review, with the potential for payment increases over time.


    Factors that will be considered:

    The good news is that life insurance premiums are currently much lower than they were previously. Factors that influence the cost of your insurance cover include:

    • Your age
    • Health considerations
    • Occupation
    • Smoking status

    If you stop smoking after taking out cover, let your insurance company know, as they may reduce your monthly premiums. Honesty is important, and if you provide false or misleading information regarding your health or smoking status your policy will be invalidated and you won’t get a pay out.

    Family Income Benefit

    Instead of being paid a lump sum, your family will be provided a regular monthly tax-free income for the remaining duration of the policy term after you die. The downside is that if the policy expires shortly after you die, your family will only get monthly payments for a short period of time.

    Whole of life cover

    This kind of policy provides a guaranteed pay out, and as a consequence premiums are much higher than for term insurance. You will also be paying premiums until you die, even if you have already cleared your mortgage and are in a good financial position.

    Over 50s life insurance

    This policy option is popular with those who have been a little slow getting around to life insurance cover. An attraction is that you will be accepted even if you have a medical or illness history. However, these policies commonly have a maximum age limit, and will need to be in place for a period of time for a claim to be considered. Premiums can be inexpensive, but cover is also relatively low, and will only assist with immediate expenses, such as funeral costs.

    All information sourced, detailed and provided by: Aussie Finance Blog

Lifestyle: Are Credit Cards Worth It?

For most cardholders, credit cards can be your ticket to a wide range of great spending opportunities such as shopping, business, and travel. But for others who will often misuse their credit cards, owning a credit card may lead to financial hardship in the long run. Aussie Finance Blog gives us a preview of the perks and disadvantages of owning a credit.

Convenience: A credit card will save you the trouble of finding a nearby ATM, and you will need to carry less cash with you.

Statements and records: You can easily keep track of expenditure, receive ongoing bank statements and retain records for tax purposes.

Cash flow: A credit card is a convenient way to obtain a cash advance at a time when you need it most.

Build a good credit rating: Having a history of controlled credit card use will supply banks and other lenders with a good impression of your money handling skills. It will also help negate past bad credit history.

: Credit cards can make you feel you have an abundance of ready cash. A credit card used inappropriately can result in overspending, leading to repayment difficulties.

Extra paperwork: It’s not uncommon to lose track of spending. You will need to keep receipts in order to check them against bank statements.

Missed payments: If you miss a payment, you may end up paying much more than required for your purchases.

High interest rates: High interest rates can often outweigh benefits. Many purchase savings offered by credit cards are also available elsewhere.

A cycle of debt: Customers sometimes obtain a new credit card to alleviate debt on their present card. This approach leads to a cycle of debt, with increased monthly payments.

Credit card teaser rates: Companies lure customers with attractive introductory interest rates. Although initially helpful, the expiry of the introductory rate is also the start of a new rate which can be much higher and difficult to manage.

Verdict: Are credit cards as bad as they seem? Credit cards are like tools, if you use them correctly and responsibly there won’t be any negative consequences. What do you think about credit cards?

Personal Finance: The Best Way To Save Up Your Money

Dinners on a budget, using no-frills home brand products and skipping small little splurges here and there may seem like the only real way to save money. But there are more refined tricks and life hacks that could easily save you a buck or two. Here are a few tips from The Simple Dollar that could help you sustain your finances and give you a lot more security.

Give yourself a goal

Setting yourself a goal can be the most challenging and rewarding ways to save money. Identify your purpose, why do you want to save money? What are you working towards? Are you saving up for a goal, a house, a holiday trip or an expensive pair of shoes? Give yourself a number and calculate between your salary and how much you’ll need to divide and set aside in order for you to reach your goal.

Keep track of your spendings

It’s not always easy to remember where all of your money is going. Keeping record of your spendings can help you track your patterns and bad habits in order for you to reduce excess costs and keep you spending on the right things.

Move bank accounts to take advantage of perks and earn more interest

According to The Simple Dollar, “if you’re paying a monthly fee for your checking or savings account, you would benefit from researching some of newest banking offers out there. Not only do some banks offer sign-up bonuses simply for opening an account and setting up direct deposit, but some offer attractive interest rates to new customers as well.

It’s true that interest rates are not what they once were, but it’s still worth a look. Some of the best free checking accounts and best savings accounts can be found online. Here’s a guide on how to make that switch.”

 Sell your goods

If you own any high quality products that are of value and not in use, it’s always a good idea to sell it to someone in need. This rewarding trade can help you earn a few extra dollars whilst also freeing up your home space for more important things. Consider selling your items on online platforms such as

Sign up for every free customer rewards program you can.

The Simple Dollar suggests that, “no matter where you live, you’ll find plenty of retailers who are willing to reward you for shopping at their store. Here’s the basic game plan for maximizing these programs: create a Gmail or Yahoo address just for these mailings, collect every card you can, and then check that account for extra coupons whenever you’re ready to shop. You can add to those rewards and discounts by using rewards credit cards to earn points on purchases at a wide range of stores that can be redeemed for cash back or other benefits.”

The 30-day rule.

The most important rules of personal finance is waiting 30 days before deciding to make a purchase. According to The Simple Dollar, “After a month has passed, you’ll find that the urge to buy has passed as well, and you’ll have saved yourself some money simply by waiting. If you’re on the fence about a purchase anyway, waiting a while can give you a better perspective on whether it’s truly worth the money.”

Avoid convenience foods and fast food.


As well as eating healthier, avoiding packaged frozen foods, takeaway or fast food can save you a lot of money as fast food items tend to cost a lot more whilst feeding you less.


News: CBA Delivers $2.4 Billion for First Quarter Profit

Commonwealth Bank of Australia has recorded a $2.4 billion profit in its first quarter, with slight slowdown in income growth compared to the previous year.

CBA said the decline was due to the falling interest rates, stronger currency and higher insurance claims.

In total, CBA’s full-year cash profit to June 30 amounted to $9.45 billion.

Westpac announced on Monday that its full-year profit amounted to $7.82 billion, while National Australia Bank delivered $6.48 billion and ANZ reported 18 per cent decline in profit to $5.9 billion.

Alipay CBA

News: Alipay Enters Australian Market With Commonwealth Bank Partnership

Commonwealth Bank of Australia have signed an agreement with third-party payment platform Alipay to allow Chinese tourists and students to use Alipay in Australia.

The deal will also enable Australians to use Alipay for purchases over AliExpress, a platform for Chinese merchants to reach global consumers.

“We are constantly working on payment solutions that offer flexibility and choice for our customers so the prospect of bringing them closer to a globally leading mobile payments provider, and its 450 million active users, is truly exciting,” said Kelly Bayer Rosmarin, group executive of institutional banking and markets at CBA.

Alipay said the deal is targeted at the 19,000 Chinese tourists who visit Australia every week.

“Australia is a popular destination for Chinese travellers and Chinese students studying overseas,” said Douglas Feagin, senior vice-president at Ant Financial Services and head at Alipay International. “We want Alipay users to enjoy the kind of convenience they are used to at home.”

Alipay’s parent company, Ant Financial was valued at $US75 billion in September.

China is the world’s largest market for mobile payment, with a transaction volume of $US235 billion in 2015.

Market: Latest Stock Market News – US Election

It has been reported on Monday that international stock markets has risen. With the Dow Jones industrial average increased by 371.32 points, this has suggested positive news for Clinton following the FBI email investigation.

According to an article on CBC, “Investors have been anxious in recent weeks over signs that the presidential race was tightening. Stock markets hate instability, and a Clinton presidency is being interpreted as a continuation of the status quo.”

CBC also reported that “A broader market index, the S&P 500, ended Friday on its longest losing streak since 1980 — nine days in a row — on fears that Republican candidate Donald Trump may ascend to the White House.” There was confidence on Monday as the market with the S&P reaching 46.34 points, to 2,131.52

Phil Blancato, CEO of Ladenburg Thalmann Asset Management has stated that “This is not a rational market. This is a reaction to less uncertainty,” “In those kinds of markets, people are jumping into stocks that they think are cheap. And what are the cheapest right now? Financials and health care.”

For Toronto’s stock market, the S&P/TSX composite index is rising by 143.20 points to just over 14,652.45.

Gold has lost $25.10 US an ounce to hit $1,279.40 US an ounce.

The December contract for light sweet crude dipped by 82 cents, closing at $44.89 US a barrel.

The Canadian dollar rose by 0.17 of a cent to finish at 74.78 cents US.


RBA Keeps Interest Rates at 1.5 Per Cent

The Reserve Bank of Australia (RBA) has announced that it would keep the cash rate at 1.5 per cent, only two weeks after governor Philip Lowe said more interest rate cuts might be necessary to prevent rising inflation.

“The board judged that holding the stance of policy unchanged … would be consistent with sustainable growth in the economy and achieving the inflation target over time,” the RBA stated.

“The bank’s forecasts for output growth and inflation are little changed from those of three months ago,” Dr. Lowe said in a statement on Friday.

“Over the next year, the economy is forecast to grow at close to its potential rate, before gradually strengthening. Inflation is expected to pick up gradually over the next two years.”

The RBA also expected commodity prices to stabilise after inflating by 9.5 per cent in October.

Economists expect the rate to remain on hold, at least through 2017.

“Moving forward, if domestic economic data remains strong, there should be no reason for the Reserve Bank to change their stance on monetary policy,” said John Flavell, chief executive at Mortgage Choice. “As such, the cash rate could be left on hold at 1.5 per cent for the foreseeable future.”

“Even though the underlying inflation rate is still below the RBA’s target rate, ‘keeping its powder dry’ is absolutely the right monetary policy decision for the moment,” said Brendan Rynne, chief economist at KPMG. “Waiting for a clearer picture of which way the local and international economic forces are moving is smart.”


News: Chinese Investment in Australia’s Property Market Declines

Chinese property investment in Australia has declined by 37 per cent year-on-year, according to a report by London-based property consultancy Knight Frank.

The Changing Currents, Rising Tides report found that Chinese developers and investors spent US$1.7billion in the first half of 2016, with the volume of office and hotel transactions dropping 65 per cent and 42 per cent respectively year-on-year.

“The volume of Chinese investment in Australia is down considerably year-on-year because of a lack of mega-deals in the first half, as large deals such as the Investa portfolio dragged the 2015 number higher,” said Matt Whitby, head of research and consulting at Knight Frank.

However, Whitby said en-block commercial properties in Sydney and Melbourne remained popular to Chinese investors, who were “attracted by rental growth supported by strong tenant demand and a supply shortage.”

The report also noted that Chinese investors’ interest in foreign real estate market remained strong, “driven by Chinese economic and policy factors and are attracted by favourable local market conditions in gateway cities” in Australia, Canada, the United Kingdom, and the United States.

Dominic Ong, head of Asian markets at Knight Frank indicated that more major deals could be made in the second half of the year, as fewer transaction opportunities and a promising rental market have pulled in investors.

“Activity has picked up in the past few months,” said Ong.

“Some of the most recent transactions in Australia from Chinese buyers include 15 Help Street, Chatswood which sold for $43.8 million to One Pro Investment Group; 20 Bridge Street, Pymble which sold for $78 million to YuHu; 210 George Street, Sydney sold for $160 million to Poly Group; and 61 Lavender Street, Milsons Point sold to Aqualand for $110 million.”


Construction equipment sales in China have improved based on reports from Equipment hunt

Finance Trends: Construction Industry

Financing in the construction industry continues to be a challenge for many contractors in the United States, according to Todd A. Feuerman of Construction Global.

He states that “even during the pre-recession period, lending to construction firms presented challenges to most banks.” Feuerman suspects “that this was due to a number of economic factors, including the sensitivity of contractors to economic cycles, revenue fluctuations from year to year, excess competition and the expansion of the construction industry”.

Additionally, Feuerman concludes that “there are other credit underwriting issues that continue to challenge banks in lending to construction firms, including prominent construction company failures, the unpredictable nature of the work, estimates used in the preparation of financial statements, diminished gross profit margins with continued backlog profit erosion, lending against bonded accounts receivable and addressing “quasi liens” on accounts receivable secured with joint check agreements”.