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Sparkra, Unit G04, 33 Racecourse Road, Melbourne (2026)

03/05/2023

Are you running a company weighed down by debt? If so, you understand the struggle to keep your business afloat in such a challenging financial situation. But there are steps and strategies you can take to reduce or eliminate your organization’s debt, restoring it to its former glory.
https://tinyurl.com/msts3vwk

Are you running a company that is weighed down by debt? If so, you understand the struggle to keep your business afloat in such a challenging financial situatio

16/04/2023

More than half of the 2 million Australian households struggling to put food on the table have someone in the home in paid work, data from Foodbank Australia shows.

The rising cost of living is seeing many people seeking out food relief for the first time, but if you haven't needed to ask for help before it can be daunting.

Let's take a look at where to start and what your options are.
https://tinyurl.com/4xuueh6t

The rise in the cost of living is the primary reason more Australians are struggling to put food on the table. If you are needing help for the first time, what are your options and how can you get the help you need?

02/04/2023

No matter whether you’re rich or poor, or even young or old, there are plenty of money guidance books out there for anyone who’s in need of a little financial advice.

If you’re eager to learn about how to retire in peace, how to invest, how to be smarter in spending and saving, or how to get out of bad financial habits, these books will hopefully show you how to take control of your future and freedom.

Once you’re confident you’ve found the right finance book, it’ll be the perfect time to snuggle up with a cup of tea on the couch or sit out in the sun with your feet up and start reading.
https://tinyurl.com/mr32znkh

Have you ever wanted to get your money in order but didn’t know how? If you’re ready to turn that dream into a reality, here are the 15 financial books you should start reading.

28/03/2023

In 2019, Australia’s banking regulator, the Australian Prudential Regulatory Authority (APRA), made it easier for people to secure bigger mortgages. APRA did this by easing the ‘stress test’ on new loans when it changed the test to 2.5 percentage points above the lending rate. The previous barometer was 7%. But that absolute rate was considered too stringent when inflation was tame, the economy was lacklustre, house prices were declining, and mortgages rates were only 3% to 3.5%.

Within a year, the pandemic struck. The Reserve Bank of Australia (RBA) went radical. The central bank cut the cash rate from 0.75% to a record low of 0.1% gave banks $188 billion to lend via a facility and placed a yield target of 0.25% on three-year Treasury bonds that was later lowered to 0.1%. Into 2021, the RBA said these low rates would last “until 2024 at the earliest”.

People rushed to borrow at rates below 2%, which set the laxer stress test at up to 4.5%. House prices soared and consumer debt to output now stands at 120% of (nominal) gross domestic product. While this is less than 2016’s record high of 129%, the ratio is among the world’s highest.

When household debt is high, interest rates don’t need to reach double figures to stretch households because the percentage of income consumed by repayments is higher. The Grattan Institute in June last year estimated that a mortgage rate of 7% could be as devastating as those approaching 20% that were experienced in the 1990s.

A variable mortgage rate of 6% today would ensure that mortgage repayments consume about 11% of Australian disposable household income, almost double the 6% of disposable income repayments in 1990 when variable rates topped 18%, the institute says. This reflects that people these days borrow more against their income to buy a home than did their parents because housing costs more.
https://tinyurl.com/bdxve5jp

Could soaring mortgage payments trigger a bigger-than-expected downturn? CFS Investment Specialist Michael Collins looks at the prospects both for and against this eventuation.

27/03/2023

There has been a lot of talk about the risk of financial contagion following the collapse of California’s Silicon Valley Bank. Perhaps too much talk.

While the frequency of bank runs in the past shows the power of emotions to move markets, there’s little reason to panic.

We’re not looking at anything like the circumstances that precipitated the global financial crisis of 2008. If you’ve got your savings in any bank or credit union in Australia or New Zealand, the greatest fear is fear itself.

Just two other US banks, the New York-based Signature Bank and First Republic in San Francisco, have been caught up in the trouble. Internationally, the only casualty is Credit Suisse in Switzerland, whose customers have been saved by loans offered from Switzerland’s central bank and takeover by Switzerland’s largest bank, UBS.

It is likely that until a few weeks ago you’d never heard of Silicon Valley Bank (or Signature or First Republic). But Credit Suisse, founded in 1856, is known around the world. It was regarded as one of 30 systemically important global banks.

What does its troubles have to do with Silicon Valley Bank? Not much, except that fear is contagious, and the bank already had problems that made it extra susceptible to panic.
https://tinyurl.com/769bujtt

The chances of any bank in Australia or New Zealand following the trajectory of Silicon Valley Bank and Credit Suisse is effectively zero.

22/03/2023

Credit card spending has reached record levels as the cost-of-living crisis hits Australian pockets, with warnings about how people could fall into a debt spiral if they keep using their plastic.

Monthly purchases on credit cards reached a record high of $33.5 billion in January according to data from the Reserve Bank of Australia (RBA).

That’s a “whopping” increase of 17 per cent in the past year, representing an extra $4.9 billion on Australian credit card bills.

With one in two Australians experiencing financial stress, there are a growing number of people turning to their credit cards to pay for things they don’t have cash for, according to Finder credit card expert Amy Bradney-George.

“As prices continue to rise, consumers are depending on credit cards more – including to pay for essentials like food and utilities.”
https://tinyurl.com/5bsxzydz

Credit card spending has reached record levels as the cost of living crisis hits Australian pockets, with warnings about how people could fall into a debt spiral if they keep using their plastic.

20/03/2023

More than 4.7 million Australians will receive a cash boost to their social security payments to help them cope with the soaring cost of living from today.

Australian households spent an average of 11.2 per cent more in December 2022 than in the same month the previous year, according to ABS figures.

The changes will come into place on March 20.

A $37.50 per fortnight increase will go to singles receiving one of three payments including the Age Pension, the Disability Support Pension and the Carer Payment.

The second largest increase of $56.40 a fortnight will go to couples on the same three payments or the equivalent of $28.20 per person in the couple.

The maximum fortnightly rate of pension will increase to $1064 for singles and $1604 for couples, inclusive of the Pension Supplement and Energy Supplement.

People over the age of 22 and without children who receive the Single Jobseeker payment or the ABSTUDY payment will receive a $27.40 per fortnight increase.
https://tinyurl.com/2ecbwuhf

More than 4.7 million Australians will receive a cash boost to their social security payments to help them cope with the soaring cost of living from Monday.

13/03/2023

Research supports scalable transparency and protection for consumers at highest risk from forms of credit.

The study found evidence that those showing signs of financial risk were more likely to hold multiple BNPL accounts.

The likelihood of holding multiple BNPL increases:
2.2 times if in the highest risk of missing payments in next 12 months,
2.1 times if recently maxed out on a credit card,
1.7 times if holding a personal loan,
1.5 times if in the lowest socioeconomic group, and,
1.3 times if receiving government benefits.

The authors acknowledge that the majority of consumers use BNPL safely, finding 77% of consumers who used BNPL were in low or very-low risk grades. Despite the benefits to many, the innovations revealed weaknesses in the Australian credit regulatory framework that put a vulnerable group of consumers at greater risk from forms of credit beyond just BNPL.
https://tinyurl.com/4sehzh92

A submission by Business School academics to the Australian Government's consultation on buy now pay later regulation revealed weaknesses in the Australian credit regulatory framework that put a vulnerable consumers at greater risk from forms of credit beyond just buy now pay later.

12/03/2023

Female university graduates in Australia are earning less than men while racking up more debt from their degrees, new research reveals.

The Futurity Investment Group’s university debt report, which surveyed more than 1,000 Australian graduates, found 70% of males earned more than $60,000, compared with 59% of women. Men were also more likely to be earning more than $100,000 (35% compared with 21% of women).

At the same time, nearly half (46%) of female graduates finished university with a Hecs (Higher Education Contribution Scheme) or Help (Higher Education Loan Program) debt of between $20,000 – $50,000, a rise of 14% in three years and slightly higher than men (43%).

Kate Hill, an executive at Futurity Investment Group, says the type of courses that have higher proportion of women tend to lead to lower paying professions, despite the cost of education being similar to other degrees.
https://tinyurl.com/m2kh79nh

Average student debt balance has risen 10% and taking longer to pay off, affecting major life events such as starting a family

09/03/2023

BNPL has been very popular, particularly with young people.

Some estimates suggest more than 60 per cent of BNPL's users are aged between 18 and 34.

However, there have long been questions around how safe BNPL is to use, and whether more needs to be done to protect the seven million Australians using the largely unregulated service.

For example, BNPL late fees can reportedly equate to interest rates of up to 50 per cent. And, according to ASIC in late 2020, one-in-five BNPL customers were missing payments.

What's most concerning is who is being drawn into this debt.

"People who are really under serious financial stress are taking out BNPL. And that's the real concern," University of Sydney economist Andrew Grant says.
https://tinyurl.com/3ujnxdtp

Some estimates say 60 per cent of buy now, pay later (BNPL) users are aged under 35, but academics say the service has too few compliance checks and protections for young people.

07/03/2023

Tuesday's 10th successive Reserve Bank interest rate hike is the culmination of a process that has added $1,080 to the monthly cost of payments on a $600,000 variable mortgage.

I've calculated this increase in payments — which amounts to $12,960 per year — by comparing payments on the National Australia Bank's base variable mortgage rate before the Reserve Bank started its series of hikes in May 2022 with payments after the NAB lifts its rates in accordance with Tuesday's decision.

And Tuesday's statement from the Reserve Bank indicates there's more to come.

But an end to these rate rises is within sight — possibly as soon as mid-September.
https://tinyurl.com/ywanprjb

The Reserve Bank's statement indicates there aren't too many rate rises left. And history suggests those hikes could come to an end by early spring, writes Peter Martin.

01/03/2023

Potential property bubbles and crashes in the Australian housing market are hotly debated and heavily scrutinised because housing is a lynchpin of the country’s economy. Much of Australia’s wealth—for both individual households and financial markets—is dependent on property investments.

Understanding the economic concept of a property bubble, and the factors that contribute to their development and deflation, can help you better interpret Australia’s property market outlook and the impact of changing economic conditions like—yep, you guessed it, rate hikes.
https://tinyurl.com/2p8t5njt

Is Australian Real Estate In A Property Bubble?

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