Australian personal finance news, tips and advices.
by AFB
By Kate Browne
Nothing unravels a blossoming relationship quite like a bad credit history. Seriously!
Ok I know what you’re thinking “yeah right sure finance lady, it’s not about how you look or how you come across personality-wise or even if you are a dog or cat person it’s all about your credit report…give me a break.” And well that might be true, bear with me…. If you are going on a date it just might be worth checking your credit report – as well as the mirror – before heading out the door. ... (read more)
by AFB
Every day countries publish economic reports, meetings of Central Banks are held, as well as governors give speeches. These events usually occur at a scheduled time. To keep abreast of the upcoming events traders use an economic calendar where the time of their release and the degree of importance are displayed.
An important economic event can significantly change the market price of the asset in a matter of minutes. Traders respond to news reports in different ways. Some traders expect such news and recommend not to miss the opportunity to benefit, while others stop trading before the releases and wait for the market to calm down. ... (read more)
by AFB
As humans, we are always busy making one plan or another, especially when it has to do with everyday, weekly, monthly, or annual events that bring us success and happiness. A higher percentage of people never take the time to consider funeral planning, whether for themselves or their loved ones. Although it is not a pleasant topic for thought or discussion, a funeral is a significant part of everyday living and should be given due attention. This is especially true when it comes to the financial aspects of conducting funerals, which might put a whole lot of stress on your loved ones on top of their grief.
There are several reasons why you should consider a funeral plan, these include but are not limited to the following;
by AFB
In order to avoid being ripped off, you need to take your time and compare mortgages from a few vendors. This needs to be done correctly, if you desire a good result. You should also understand that the type of mortgage you choose will go a long way to determine the rate you pay. Other factors that might impact on rates include your deposit, credit rating, and others. Listed below are some of the steps that would help you engage in successful and great comparison shopping. They are as follows:
by AFB
It is possible to borrow up to 105% of a property’s value through some lenders, with the help of a guarantor. This has a number of benefits, including allowing you to buy a property without a deposit, and – as we explore later, can also save you from the cost of lender’s mortgage insurance (LMI) that can apply to more highly leveraged loans.
A guarantor is a person who provides additional security to a lender for a loan. They agree to become legally liable for repaying a debt if the borrower defaults on their repayments.
Not all lenders offer these types of loans, but several do. Guarantors are usually immediate family members, like parents or spouses. Some lenders even call them family pledge loans, rather than guarantor loans.
You might be wondering why you’d need to borrow more than 100% of your property’s value. It’s important to understand that when you buy a home or investment property, there can be up-front costs in addition to the purchase price, including:
by AFB
Source: Pexels
Though money can take you places, there is no guarantee that a bigger investment leads to success. The invention of the internet is indeed a blessing to many who dream of pursuing a business. As long as you have an internet connection, a laptop, and comfortable space, you can start any online entrepreneurship venture even with minimal cash.
You’re in the right place because today, we are about to reveal opportunities that’ll improve your financial future – the digital way. The best part is that you don’t need hundreds or thousands of dollars in order to get your business up and running.
Where to Source Ideas for Your Digital Business
Since you are planning to build an online business, there’s no other place to get inspiration from but the internet. For a start, you can type in any niche you like into Google and see what results come up. Explore individual websites to know what’s going on in your space.
Aside from that, we want to show you a definitive list of online business ideas to spark your imagination. Consider these options and you might just find one that appeals to your personal interests.
Business Idea #1: Freelance writing
Working as a freelance writer is the perfect idea for the writer at heart. If you love the written word and enjoy expressing your thoughts, surely you can find so many platforms where you can apply as a content writer. These potential marketplaces include Upwork.com and Freeeup.com. Applying on these sites is for free.
You can find multiple content writing opportunities especially now that more and more site owners look for someone to produce content on their behalf. If you have less than $50, you could even start a blog where you can feature your portfolio for everyone to see.
Business Idea #2: Dropshipping
You many or may not have heard of the term dropshipping. In case this is your first time to encounter the concept, dropshipping is an e-commerce strategy where you, as a business owner, don’t stock items in your online store but instead source it from a third party provider that will ship them directly to your customers.
When you venture into dropshipping, you don’t need a huge capital. You pay the wholesale provider only after a customer makes an order from you. What’s more, you can manage your online store regardless of the time and place. This means that you’ll be able to enjoy a relaxing vacation while making money.
Business Idea #3: Vacation rentals
Do you have some extra unused space in your home? Instead of buying a land and starting a real estate business which would be way expensive, you can take advantage of the services of an online hospitality marketplace such as Airbnb.
Source: Pexels
All you need to do is apply as a host in Airbnb. List your space on the website and agree to their terms and conditions. Airbnb will also let you know how much profit you can potentially make when a person books your room through their platform. However, you’re always free to decide on your price.
Business Idea #4: Affiliate marketing
In affiliate marketing, you earn a commission when someone purchases another brand’s product or visits their website. When visitors reach your site, they click on your affiliate link which leads them to the brand that credits your action.
For you to find affiliate marketing opportunities, you need to use the services of an affiliate network. Affiliate networks help you grow your affiliate business by acting as the middleman. Through an affiliate network, you find advertisers to connect with whose products you’re willing to promote.
Business Idea #5: SEO Consultant
If you love the idea of helping new site owners boost the visibility of their business in search engines, become an SEO consultant.
To get clients to avail your SEO services, first you need to set-up a website where you feature your offer. Another smart marketing tactic would be to create an online course about SEO and put it up on Udemy. That way, people will learn to recognize you as an expert.
To pursue a business idea as an SEO expert, it’s important to research, read industry leading blogs, and watch training videos. While experiencing SEO firsthand by being able to successfully rank websites is the great, you can always start out small. Try practicing keyword research, increasing website speed, and optimizing pages. After all, there are plenty of free SEO tools to use.
Wrap Up
Did you find something that interests you on our list of online business ideas? Don’t worry if you weren’t able to, because there are still a lot more to explore online. Hopefully this article helped you in a way to turn your dreams into reality even on a shoestring budget.
by AFB
What this realistically means is that black credit cards have a higher spending limit. Black cards also come with fairly steep annual fees, greater opportunities for points rewards and a whole bunch of other perks and enticements to sweeten the deal. Banks analyse spending and repayment data when ascertaining customer value, with responsible spenders in the higher wage bracket identified as prime candidates for a black credit card.
Every bank now has its own black credit card version, although the term ‘Black Card’ was the focus of a trademark dispute between competing financial institutions a few years back. It may therefore come as a surprise to know that the original black credit card is actually known as the American Express Centurion Card. This most prestigious of all credit cards is in a league of its own, and although informally known as the Black Card, bears little resemblance to other black credit cards.
For starters, the American Express Centurion Card is invitation-only, and is reserved for mega-rich individuals. Annual fees cost several thousand Dollars and card holders have no spending limit. One investor used their AMEX Centurion Card to purchase an artwork at auction valued at US $170 million.
As expected with a premium product, black credit cards offer features that will result in value and savings if used wisely. There are fees involved, and although prestigious, a black credit card can be the wrong solution in the hands of a spendthrift, or when used as a means to escape from financial hardship. Therefore, it’s important to know if you really do require a black credit card. There are some questions worth asking:
Some investigation is required before choosing a black credit card. Features and special offers are moving with the times and banks are eager to tap in to the wealthy market sector. There may be more room to negotiate when applying for a black credit card so don’t be afraid to ask for special treatment from your bank manager. Here are some black credit card features worth considering:
A black credit card is most useful when used for major expenses and purchases. People whose occupation requires extensive air travel, or those in the business of buying and selling on a large scale will find a black credit card invaluable, and indeed quite profitable.
Australians love to accumulate frequent flyer points and miles, along with other rewards courtesy of their credit card. Australian banks entice customers with special introductory offers, low interest rates, bonus points and miles, and a host of special rewards. Here are a few (not all) black credit card offerings from Australian banks.
If you’re interested in black credit cards issued by banks in New Zealand, I suggest you start with a comparison site, like creditcardscompare.co.nz.
Please note that the credit card offer details were checked on 18th November 2016 and the banks might change the details, so the below information is just a guideline, not accurate product information!
Exclusive Offer: 100,000 bonus Qantas points if you apply before 5 January and spend at least $5,000 on eligible products or services within 90 days. Other benefits include complimentary travel insurance, special concierge services and VIP airport lounge admission.
Check details on the product page.
Commonwealth Bank Diamond Awards Credit Card ... (read more)
by AFB
Factors that Influence
Geopolitical turbulence, macroeconomic policy, government legislation, and technological breakthroughs all rank among the most influential world events on forex prices. Events which affect the forex market can be as benign as a democratic election which returns the predicted outcome, or as unpredictable as the outbreak of a war, or a natural disaster.
Trading the News
Each participant in the currency market is constantly anticipating price movements. To accomplish this, traders rely on news reports and market data to inform their positions. This is one reason why veteran traders will spend as much time scanning live news feeds as they do watching the currency charts. It is called “trading the news”.
As geopolitical factors change, they create movements in the market: encouraging a seller to raise their prices, or convincing a buyer to lower their offer in response to a growing risk. Learning how to best interpret the news and apply that knowledge to investment decisions is, therefore, a vital technique for every forex trader.
by AFB
Since Australian business—just like the global economy—never sleeps, a round-the-clock payment system that can get payments into the right hands in less than a minute is a real boon for the country. The NPP is the real-time payments infrastructure that Australians need to kick their economy up to the next level.
Designed for low-value payments, NPP Australia will allow customers, businesses, and other organisations to make payments and receive payments without hassle. This secure system will connect financial institutions, such as banks, credit card companies, and third-party payment processors (such as PayPal) to consumers and businesses.
Payments will be data-rich, meaning that payers and payees will have not only a timestamp to record the transaction, but also a record of the flow of currency and other information relevant to the transaction. Businesses will be able to track the successes or failures of their products and services, and consumers will be able to track their spending.
What makes NPP Australia such a boon to the Australian economy is that funds can change hands quickly. Payees can access their funds nearly as quickly as they receive payment. With the NPP, even when payees and payers have accounts in different banks, the system will free up funds at almost the speed of payment. Instant payment—and almost instant access to funds—without the extra fees that platforms like PayPal offer—will create a better way to do business.
Originally set to launch in October 2017, the NPP will delay its launch until Australia Day, 26 January 2018, according to a 2 October 2017 article in the Guardian. The platform will offer several services from which each financial institution can choose from to provide for their customers.
Organisations and businesses who want to optimise the financial end of their business can leverage the power of the NPP to pay their creditors and employees at near real-time speeds. On the other side of the fence, they can also receive payments from their customers and have the money in their accounts within seconds.
Financial institutions that want to take their business to a whole new level can connect to the NPP platform to lessen their customers’ wait time to receive funds. Those who do not connect to the platform risk being left out in the cold, since today’s customers want convenient payment options in real time.
Customers who want a more convenient way to pay for goods, services, and existing bills will welcome the advent of the NPP. Having a centralised payment platform on which they can pay for practically anything will simplify their lives and free up time that otherwise they would have spent paying bills the old-fashioned way. Customers can even use the system to make a mobile payment—an added convenience.
To link an account with the NPP, customers and institutions will need a service called ‘PayID’ to create a seamless, simplified payment process instead of a BSB or account number.
A PayID is a unique ‘address’ that allows people to link their financial accounts to a more memorable piece of information. Most users prefer to use their email address or telephone number for their PayID, since they use them practically every day. Since few people know their BSB or account numbers by memory, this service will make the payment process all the more easy for users. Businesses and other organisations will want to integrate this function into their payment system so their customers can use the system with no worries about remembering account numbers.
To create a PayID, you need to register your chosen ID name with a financial institution that plans to use the system. Your institution will link your PayID to your actual account. That way, when you need to pay someone, you needn’t share your actual account number. All you need is to give them your PayID—and your BSB and account numbers will remain private. No more worries about stolen account numbers. With PayID, your information is safe.
PayID will work with the new Osko by BPAY service, a product designed just for the NPP. Eventually, it will include three services, but at the launch of the NPP, it will provide only one: Payment.
Payment: This Osko service will allow you to make instant payments in real time. Funds will be available almost instantaneously. It will work no matter which financial institutions you or the other party uses. You can also send a description—up to 280 characters—with your payment, so you and your payee will have a record of what the payment is for.
Transactions done through Osko by BPAY will take place using the Fast Settlement Service from the Reserve Bank. The makers of Osko have embedded a slew of safeguards to make sure your transactions are safe.
First of all, they have instituted built-in fraud screening. If a potentially fraudulent situation arises, they can slow down the payments to respond to the situation. Secondly, when you link your phone number or email address to your account with PayID, you’ll never have to share your account number or BSB with either payers or payees. To request a payment or make a payment, you’ll need to log into your bank account through the Internet as well, increasing the level of security for the new system.
BPAY has provided its customers with a secure, efficient way to receive and pay their bills. Once customers sign up for the service, they can have their bills delivered right to their mobile or Internet banking platform. Customers can view their bill and pay it through their online banking platform, adding both convenience and security to the process of paying bills.
What Osko by BPAY does is augment those functions with the ability to pay and receive money in real time. With a PayID, Osko customers will have even more security, since with the PayID, they won’t need to share their actual account number with the payee.
With these new developments in paying bills and receiving money, Australia looks to lead the way among developed nations in the financial arena.
For you—the user—it means that you’ll have a faster, more secure, and more reliable payment service that keeps records for you. It will be easy to use, require little memorisation, and will increase the speed at which you can do business.
by AFB
A diversified portfolio can help protect your income and wealth during various stages of the economic cycle and provide good long-term returns.
Here are seven tips for diversifying your portfolio.
By investing in multiple asset classes, your overall returns will be less volatile because losses or low returns from one asset class are offset against gains or high returns from another. You’ll also be less exposed to one economic event, so if a company or sector you’re investing in doesn’t perform well, you won’t lose all of your money.
An investment portfolio with a 100% allocation to shares, for example, wouldn’t do well during an economic downturn. So it’s important to diversify across different asset classes, such as:
Even within asset classes it’s important to diversify, to provide further protection against unexpected events. For instance, you’ll want to consider investing in various types of bonds (fixed rate, floating rate, inflation-linked). These can help reduce your income risk, interest rate risk, and inflation risk. You can also invest in both corporate and government bonds.
When it comes to stocks, you should have about 15 different stocks in your portfolio for diversification, including blue chip, second-line, and speculative stocks. Together, these offer security, growth potential, and speculative fun to increase your return. This can help manage your portfolio risk and minimise the impact of one stock having too much influence on the portfolio.
As for property, if you’ve already invested in residential property, you should consider investing in commercial property for further diversification.
You can also grow and protect your wealth by diversifying risk. High-risk or “growth” assets have higher returns, whereas low-risk or “defensive” assets have lower returns.
High-risk assets have more volatile returns over the short term, but the higher risk and volatility can be offset by investing in low-risk assets that have lower short-term volatility.
How much of your portfolio you allocate to high-risk and low-risk assets will depend on your:
For example, if you’re near retirement age, you need more predictability in your portfolio because you have less time to recover lost capital. You can do this by increasing your allocation to fixed income to decrease the proportion in high-risk assets.
Different industry sectors perform better at different times, and some sectors are more volatile than others. This shows the importance of investing in multiple sectors within an asset class. Sectors of the Australian share market include:
If you invest in stocks in various sectors, you’ll expose your portfolio to growth in different areas of the economy and it’ll be less vulnerable to a downturn in a specific industry. You can use a financial analysis tools to help you identify top stocks from different sectors to buy and sell.
If you have a stock in the same sector, consider having one leading company (larger capital) and one emerging company (smaller capital). In the healthcare sector, you can invest in a hospital and in a pharmaceutical company. This’ll give you a good mix of companies across your portfolio. And if one company does poorly, you still get the benefit if another company does well.
You can also invest in the following types of companies in the same sector:
If you invest in the Australian market and in international markets, you’ll reduce your exposure to one market. Different markets peak at different times; for example, when the Aussie market is down, the US or Asian markets may be up.
You can invest in international markets directly or via an overseas share option in a managed fund, exchange-traded fund (ETF), or superannuation fund. Just keep in mind that when you invest some of your money overseas, changes in currency exchange rates can increase or decrease your returns.
If you have a managed fund or an ETF, focus on diversifying within the fund by employing the expertise of various investment fund managers to manage each of the different sectors within different asset classes.
Additionally, you can invest in different asset classes and different sectors through your self-managed super fund (SMSF). You can also achieve a diversified fixed income portfolio through your SMSF by holding different types of bonds with varying credit quality. Think carefully about what you invest in as they should be appropriate in terms of your risk tolerance and be in line with the fund’s main purpose of building savings for your retirement.
Diversifying for wealth and success ... (read more)