The RBA yesterday cut the cash rate by a further 0.25%. Great if you have a mortgage but not so good if you are relying on interest or term deposits for your income. Here are a few ideas for both sides of the coin:
Home Borrowers – take advantage of the cut and get ahead. If you spend the extra dollars in your pocket it won’t go far (other than a little instant gratification). Keep paying the same off your mortgage and save years – check out any of the calculators on bank websites to see just how much you can save!
Investment Borrowers – that sharemarket or property investment you’ve been considering may be looking a little more attractive with a lower interest cost.
SMSF’s – 30.5% of all SMSF assets in Australia were in cash and term deposits as at June 2012 according to the ATO.
Retirees – the “safety” of cash may actually be costing you money soon. After taking inflation into account there is little real return.
Both SMSF’s and retirees should see now as time to review the alternatives. What are your key aims – capital protection, income, growth? Maybe it is time to consider:
- Australian Shares with fully franked dividends
- Australian or International Government or Corporate Bonds
- Listed Property
- Residential or Commercial Property