Still squirreling cash away in a term deposit? It might be time to check the interest rate.
On 3 February 2015, the Reserve Bank of Australia (RBA) cut the official interest rate by 0.25% to a new record low of 2.25%. This was the first time the RBA had made a change to interest rates since August 2013.
Wealth management experts share their ideas about planning for big expenses in the future.
My favoured approach is a portfolio of quality listed investment company (LIC) shares for wealth accumulation over the long term.
The largest LICs include Argo Investments, Australian Foundation Investment Company and Milton Corporation.
These companies conservatively invest in a broad portfolio of quality Australian shares and offer investors the opportunity to automatically reinvest dividends to take advantage of compounding.
They are low-cost, with management expenses totalling less than 0.2 per cent of the assets invested.
The portfolio is 100 per cent invested in the Australian sharemarket and is therefore subject to market fluctuations which are relatively minor in the long run.
With interest rates in Australia extremely low, it’s worth considering whether now is a good time to consider a geared investment strategy, or put simply, borrowing to invest.
JOHN Hewison was one of the first members of the Gunnamatta Surf Life Saving Club, but his recent gift of an inflatable rescue boat and motor valued at $18,000 went beyond the call of duty.