For each day that you owe money to the bank on a home loan, interest accrues on that loan. You make periodic home loan repayments and if your home loan is a P&I loan (see Home loan products: P&I vs IO loans), the value of your loan, the principal, will slowly trickle downwards. What if […]
Tag: real property
Home loan products: Variable vs fixed rates
I’d like to say we’re almost done with home loans but if I did I’d be lying. There’s so much complexity out there on this topic and it has such a profound impact on your cash flow that I think everyone has a right to know as much as possible before taking the plunge. So […]
Home loan products: P&I vs IO loans
When I was younger (I wasn’t the coolest kid) I used to wonder why anyone would take on a massive home loan and opt to pay off the interest only. When you take on a home loan, you can typically choose from P&I (principal & interest) and IO (interest only) products. Here’s what they mean […]
Home loan products: Owner-occupier vs investment loans
Whether you’re buying your first home or you’re looking to invest in property, chances are you aren’t quite wealthy enough to fork out the hundreds of thousands or even millions of dollars it can cost to buy one outright. Even if you do happen to have a seven figure bank balance, you probably won’t even […]
What makes things go up and down
Even in a pre-covid-19 world, my brother would always ask me why the market (and more relevantly) individual stocks would often defecate themselves. He did not say ‘defecate’. ‘Defecate’ is very much a euphemism here. Everyone’s talking about large dips or rallies in the market these days but if you distance yourself from the market […]
Negative and positive gearing
Negative and positive gearing are very popular topics, especially when we talk about residential investment. Generally speaking, if your investment is negatively geared, then from a finance perspective you’ve likely made a poor investment decision. It’s only from a tax perspective that you may actually derive some benefits. However it’s very important to understand that […]
The coronavirus and global markets
Unless you’ve been living under a rock lately, you’ll know that the world has been gripped by a global disease outbreak dubbed COVID-19. A couple weeks ago, global markets started to react to the outbreak. Why are markets tanking?* For the most part – unfathomable stupidity. I genuinely believe that fear of the virus will […]
Why saving is getting you nowhere
Let’s say you made a declaration to cut down on your routine smashed avo shenanigans because some rich prick told you that delicious green mush is the real reason you can’t afford to own real estate (#okboomer) and you’ve instead opted to set aside more of your fortnightly wages into a savings account to buy […]
Buying your first home – Part 2 of 2
Imagine you were in the market for a pair of birkenstocks. Imagine it was your very first pair. Now imagine the salesperson at the store said that they were running a promotion. The salesperson tells you that all first-birkenstock buyers qualify for a 5% discount. Well that sounds pretty appealing doesn’t it? Not really. Because […]
Accumulating assets
One of the best pieces of advice I ever received early in my career was that if I wanted to be wealthy, I needed to focus less on growing my income and more on accumulating assets. In most OECD countries, this is true from both a finance and a tax perspective. Assets grow faster than […]
