Becoming financially free in 2017

In December, the Cash Rate remained unchanged by the RBA. Most experts predicted the interest rate to stay the same and so it has proved to be.

If we look to the US, we can see that rates are beginning to slightly adjust upward.

So what is in store when the RBA meets on the 7th of February 2017 – how will the Banks respond this time?

You may recall that Interestingly, the major Banks begun the process of lifting their rates prior to the RBA announcement in December. The timing of the increases is a surprise, not so much as the increases themselves. There had been speculation that they would move and sure enough, they have started adjusting their rates upwards. The announcements of increases to Investor loans could well be seen to undermine the RBA decision making process.

So, what have the Banks been doing?

Well, the CBA has lifted its Fixed Rates and as expected, so has Bankwest. Last week BoM also announced increases to its Fixed Rates.

In mid-December 2016, NAB lifted its Variable Rates for Interest Only Investor loans by 0.15% citing difficult credit conditions and a need for a disciplined approach to managing its portfolio.

Bank of Melbourne (BoM) has announced a raft of increases aimed at Investors too. Interest Only investment loans have been increased by 0.08% which doesn’t sound a lot but it is a hike nevertheless.

However, the biggest shock is the increase to BoM SMSF loans. Interest Only loans are increasing by 0.43% and P & I loans by 0.35%. These loans would be a very small portion of the BoM loan book yet they are being hammered the hardest. Is it a case of raising rates because they can? It’s disappointing to see a small segment of the market being slugged out of all proportion by a Bank. I would think some clarity from Bank of Melbourne on the rationale behind this move would be appreciated by investors. A similar move by BoM parent company Westpac is sure to be next.

At the beginning of each year we all tend to look back over the year gone by and start looking forward to the year ahead. But how can you best take advantage of this natural inclination to “think things over”?

One of my mentors used to tell me “thinking about things” and not doing something as a result of all that thinking, either through an action or a decision, was the biggest killer of results in life. That’s because the time you spend thinking can never be recovered and if nothing changes as a result of it, there is no movement away from what you don’t want or movement towards what you do want. He explained that it was these little changes or actions that continually kept him moving towards what his idea of success was and enabled him to do more in a single year than most achieve in a lifetime.

So how can you use this to speed your way towards your financial freedom, this year?

Can I make a suggestion? (I’m happy for you to say NO if you want ☺ in which case there’s no need to read on!)

When you follow your natural inclination to look back over the year just gone, grab a pen and jot down some notes as you focus some of your attention specifically on what you did about your wealth.

  • What did you actually DO towards investing in your future in the past 12 months?
  • What didn’t you DO towards investing in your future but you burnt a lot of time “THINKING” about doing?
  • Which of the actions/decisions actually helped you and which ones haven’t yet?
  • Was everything you did in line with your plan for your future wealth?

Now hold on to your pen as your mind now drifts towards the coming year ahead. Use the data that you have noted down above and again focus your attention on what you will DO this year about your future wealth.

  • How will you continue the momentum of what you did do last year to build on for this year?
  • What things that you only THOUGHT about doing last year but didn’t DO, will you do this year and when?
  • How will you avoid the things that didn’t help you last year or adjust them so they do help you this year?
  • What will you DO to make sure you only DO things this year that work with your plan for your future wealth?

Now that you have noted down the start of your action plan for the year, it is time to DO something about it. Time to take action; so the effort isn’t all lost. Don’t think, without doing.

Wishing you a fabulous and prosperous year ahead and one in which you will achieve more towards your financial freedom than most will do in a lifetime.

For more information on Interest Rates or for a comprehensive review of your portfolio book an appointment now with one of our experienced Mortgage Brokers.



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