SYDNEY (AFP) – Australia’s parliament narrowly passed a 42 billion dollar (28 billion US) stimulus package Friday in a bid to stave off recession in the face of the global economic crisis.

The parliamentary approval leaves the government free to immediately implement its spending plans, with Prime Minister Kevin Rudd stressing the need for swift action throughout protracted negotiations during the bill’s passage.

Rudd was jubilant after parliament backed the plan, saying the package was in the national interest and would help Australia’s centre-left Labor government fight the global economic recession.

“The most irresponsible thing to do today, with the worst global economic recession since the 1930s staring us in the face, would be to do nothing,” he told parliament.

The package includes spending of 28.8 billion Australian dollars on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of 12.7 billion dollars to eligible workers, farmers and students.

Rudd said the Treasury estimated the plan would boost economic growth by 0.5 percentage points in 2008-09 and 0.75-1.0 points in 2009-10, supporting up to 90,000 jobs.

“Without parliament’s support for this plan, growth would be slower and unemployment would be higher,” he%2

>>>>  Finance, Business and Company News – Yahoo!7.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes.
So the first four men were unaffected.
They would still drink for free. But what about the other six men? The paying customers?

How could they divide the $20 windfall so that everyone would get his fair share?’

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $ 20,”declared the sixth man.
He pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a Dollar, too. It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, this is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.

Professor of Economics

University of Georgia

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible

1. How good will your portfolio be if we have another world war?
2. How good will your portfolio be if we have a worldwide recession or depression?

Well, with regards to Q 1, I still have no concrete answer for, and hopefully never will. With respect to Q 2, however, I can now (i.e. only now) say from experience… “It’s all ok”!

My portfolio now numbers 13 properties. When interest rates were 9% plus it was of some concern. We would have remained OK for a couple of years at those high rates because the equity we have built up provided us with a buffer (safety net).

Now every 1%  rate cut puts an additional $35,000 a year in my pocket. We’ve had 4% slashed from our rates in recent months (less what the banks failed to pass on) and the season of low interest seems set to continue for some time.

I use a separate line of credit for my property expenses (i.e. rates, body corp and so on); only paying interest charges from my cashflow. Interest rates are falling and rents are rising so cashflow is looking better and better. I don’t have to work, so while the world “financial crisis” works its way through the system; affecting us all, I remain content and comfortable holding a large property portfolio.

Increasing Population + Shortage of Rental Properties
= Low Vacancy Rates = Rental Increases

OK; ’so far so good’. With cashflow under control, there’s no stress in us holding a portfolio of 13 properties. BUT, what about growth and the lenders?

Certainly, growth has been flat over recent months but prices have not dropped in most areas. An article in The Australian last month said:

“In fact, the latest RP Data-Rismark Index results show that Australian house prices declined by just 0.8 per cent in the 12 months to October this year, and increased during the most recent three months”.

They are talking about the country as a whole (the good, the bad & the ugly); whereas certain areas have outperformed others. As an investor I discriminate against much property and only accept that which I believe will perform better for me.

I have always accepted that property values travel through cycles. I have every confidence that the short supply of property will mean that the growth in prices will/must kick in again. NB: We were about 80,000 dwellings short for 2008 and the Australian Bureau of Statistics  expect around 100,000 too few to be built this year; with the undersupply continuing around those annual figures till 2018 at least.

The mrd set ‘n’ forget, for busy people TM system that Nick promotes has worked for me personally; in good times and in bad and I have no reason to believe my ongoing confidence will be met with any disappointment! Why? Because I believe the fundamental law of “supply and demand” will ensure any outcome other than that which I expect, will be nothing more than a short term aberration.

For the benefit of those who have not spoken with me, let me explain a little of my personal strategy. It revolves around drawing on equity from my portfolio. For those of us in “retirement”, that means using low-doc or no-doc loans; not easy to secure with competitive rate at the moment.

What next?

My plan; or perhaps “flukish luck” (ha, ha) when Marion and I contracted to buy our 13th investment property; included an “ulterior motive”. We bought a top floor, 3 bedroom apartment adjacent to the Robina Town Centre. We thought we may eventually like to downsize and move into this ourselves.

We are now very close to having a number of our properties revalued so as to clear the security from our owner occupier. This is to allow us to then change the security supporting some of my loans away from my own home onto some of my earlier investment properties. With our own home unencumbered (and debt free), we will sell up, pocket the lot and move into the 3 bedroom apartment.

I accept new valuations at this point in time will not be great; but that’s fine, our goal is to simply clear the security from our owner occupier so when we sell we remain in control of all the cash we receive. We will do this without having to qualify for any new loans. No need to be concerned about the availability of a low-doc or no-doc offers – we won’t need either!

I already have an offset account set up for our 3 bedroom apartment. Therefore, after selling we will have $550,000 clear (conservatively) to put into an offset account that sits against (what will be) our new principal place of residence. NB: Selling is something we encourage you rarely ever do. In this instance, it allows us to fund the retirement we want. Because it has been our principal place of residence there will be no capital gain tax. A tailored solution that works for us, even in the face of the global credit crisis!

Some may ask: “Why don’t you simply pay out the loan on your new apartment instead of keeping the debt and putting what funds you get from the sale into an offset account”?

Good question! “Because to do so would mean that I would immediately lose control of the $550,000. If I wanted to get at any of the equity created in the new unit (by paying it off), I would have to go through the exercise of making a fresh loan application; and risk being knocked back etc, etc.

My strategy to have the existing debt on the unit 100% offset still ensures we have a $ZERO (non tax deductible) interest bill, while still allowing us the freedom to draw on the $550,000 as I need it over the next “however many years”; without the need to prove serviceability! Now when you add to that the two hundred plus thousand dollars we currently have available in other lines of credit, one can begin to see that no matter how tight credit for a retiree may become, we will be pretty much set for a number of years to come.

The “crisis” will pass, however, in the meantime a clever strategy and proper financial structuring will allow us to avert any interruption our retirement plans may have otherwise suffered. Then, when things get back to normal and my property portfolio  AND RENTS double in value again we will revalue the lot, increase our credit lines and continue to enjoy our retirement (with growing asset & income base). I am a month off 59 now. When Marion & I started on this journey I was about to turn 50 and I have been self-funded now for 3 years.

7 years + 13 Properties + A Financial Crisis = Never Work Again!

I can hear the voices screaming from all around cyber space “It’s ok for you! You have a significant property portfolio”. Compared to most maybe, compared to others… I’m crawling! Guess how you get hold of a large property portfolio yourself?

Start with a small one… but START!

Now is a good time to do it. Did I say “good”? I see the current “Perfect Storm” as being a ‘once-in-a-lifetime’ opportunity. Interest rates the lowest in 45 years (and falling); with property prices very affordable AND a rental crisis that’s only going to get worse.

My message to anybody who over the past years, didn’t get started because of their “WHAT IF” questions is: This works; so get started!

If your “WHAT IFS” are still plaguing you then maybe you should do nothing but sit tight for a few years and ask me again. I suspect, however, that I will have the same answer for you then.

* Please note: I am not a financial advisor, accountant or a finance broker – I’m just a very comfortable self funded retiree. The examples and opinions above are a compilation based on my own personal experiences, both in creating a $4.5mil property portfolio, starting with only $50k equity and also in helping a large number of people achieve similar goals of million dollar property portfolios. If unsure then consult your own accountant; hopefully one with some property experience and a personal retirement plan that is working. Financial advisors, in my opinion, rarely understand or recommend property, as their commissions come from other investment products. It should be a case of “don’t believe what people say, believe what they do!”

To ask me any questions or arrange a chat regarding how my chosen retirement plan may work for you, click here

Would you like me to guide you through an mrd complimentary & no obligation “Finance Structure & Cashflow Health Check”? Then simply complete the online secure form and I’ll be in touch with you next week; click here

Happy Investing,

Martin Bell
mrd Customer Care Program… because investing is personal

In the current round of Web Seminars we are offering, I highlight four key factors that are a MUST… if you expect to draw any credible conclusions.

1.    Record Population Growth
2.    Investors Have Fled The Market
3.    Home Ownership Unattractive
4.    New Construction Has Stalled Badly

1. RECORD POPULATION GROWTH

Australia is currently experiencing the fastest population growth in 200 years. Our population is predicted to grow by 350,000 this year for the first time in over 200 years. That represents approximately the combined total population of Geelong, Cairns & Bunbury; or the whole of Canberra.

The 1850’s Gold Rush years, Post World War 1 (1919 onwards) and post World War 2 (1946 onwards) saw our 3 previous population explosions. Today we see a similar pattern emerging; i.e. rapid and prolonged growth, too few workers and pro-immigration government policies.

Record population growth means a significantly stronger demand for new housing! Given our record numbers of new migrants will generally rent for a season, demand for rental properties will continue to strengthen.

2. INVESTORS HAVE FLED THE MARKET

Rising interest rates in recent years have squeezed rental yields making property look unaffordable. Add to the mix a booming stock market (averaged over 20% per year between 2004 and 2007) and one can see why property has not been the preferred investment vehicle of recent years.

Since becoming familiar with the term “subprime”, seeing the global credit crisis unfold… and hearing of property values in the US & UK falling by 30 & 40%, many would-be-investors have opted to stay on “strike”. It’s fair to say that since the highs of mid 2004 only the ‘brave’ have continued to invest in property.

Investor demand accounts for about 50% of all new housing starts and about 70% of unit starts. Therefore, that investors have fled the market means significant negative impact on the supply of new housing and increased demand on existing rental accommodation.

3. HOME OWNERSHIP HAS BEEN UNATTRACTIVE

As with investors. the housing affordability barrier, rising interest rates (& general living costs) and of course the US initiated subprime crisis has left many would-be home owners lacking the confidence to purchase.

Scared, priced out of the market, unable to secure funding or unable to service a loan? regardless of the reason why new home ownership has been unattractive; the result has been that many renters in recent years have simply continued to rent. This has placed further pressure on existing rental housing stock

4. NEW CONSTRUCTION HAS STALLED BADLY

Since 2005 the absolute number of completed residential properties has fallen and they are forecast to continue falling in 2009. The US subprime crisis cemented this downward trend in demand for new properties. Add to that, in recent years we have seen the high profile bankruptcy of some large developers along with massive financial pressure on many smaller developers. The cost of finance has skyrocketed for developers… i.e. if they can find a lender who will back them. Understandably, developers are very nervous… many have simply shelved their new projects until such time as they see clear evidence that investors have returned to the market.

Developers going broke, developers shelving projects and/or developers unable to secure funding means new construction has stalled badly and as a result greatly reduced the supply of new property further adding to pressures on existing housing stocks.

DISSECTING THE EVIDENCE

• FACT: We are experiencing the greatest housing shortage in 200 years
• FACT: Because of the new Federal Government’s immigration policy, we are experiencing the strongest population growth in 200 years
• FACT: Since about mid 2004, broadly speaking investors have fled the market
• FACT: Since about mid 2004, broadly speaking home ownership has remained unattractive and renters have continued renting
• FACT: Since about mid 2004 the construction of new dwellings has stalled badly
• FACT: In mid 2004, national rental vacancy levels were about 3.5%. This level is considered a balanced market. Rental vacancy levels have dropped to below 1.5% now and are expected to continue to drop to historical lows of between 0.5% and 1% in 2009. These levels represent a stressed market
• FACT: When the demand for rental housing grows at a faster pace than supply, increased demand can be offset by diminishing vacancy levels
• FACT: When vacancy levels reach just 1% it is said that we have NO VACANCY, as the 1% represents the few days between tenants moving and carpets being cleaned etc… prior to a new tenant moving in
• FACT: Therefore, once vacancy levels fall to 1%… there is no room left to offset increasing demand by diminishing vacancy levels
• FACT: When demand increases and supply decreases and vacancy levels are already stressed; i.e. no vacancy… market forces mean rents have to go up… and significantly where population growth is significant
• FACT: Interest rates are the lowest they have been in years and are expected to reach (near) record lows by mid 2009

Now you have the FACTS, rather than simply “opinions”; may I suggest you draw your own conclusions as to what might happen with Australian property in mid to late 2009?

• With the cost of renting about to soar and the cost of ownership dropping significantly (i.e. rental incomes up and interest charges down), what do you expect the market will do?
• With stock market volatility and uncertainty and interest earned on cash deposited dropping away, what do you expect the market will do?
• With serious increases to the first home owners grant, what do you expect this group to do?
• Given rental properties vacated by first home owners will not produce a glut… because vacancy levels are at an all time low (stressed market) and the population is growing by the size of Canberra each year, what do you think the market will do?

Can I go out on a limb and tell you what I think; I may be wrong, but I don’t think I am?

1. I expect rents to soar in 2009
2. I expect interest rates to continue to drop next month and in 2009
3. I expect confidence to come back to the market, drawing back owners and renters alike
4. Given there is a lag of a few years from when developers decide to build again and new stock being ready to live in… I see no relief for the poor tenant for at least a few years
5. I also believe that the combination of all that I have just outlined will result in the next property price surge

So, in summary…

Those who have been building a property portfolio as their preferred vehicle for funding their retirements (NB: assuming they bought the right residential property in the right areas) are soon going to experience the property investors trifecta:

1. Rising incomes (rents)
2. Falling costs (interest)
3. Increasing equity (values)

I would love to address the subject “We are not the USA” and compare the FACTS relating to how we are different and why what happened there will not happen here; but I will save that for another day.

May I invite you to register your interest for either our next FREE Web Seminar this Wednesday evening… or if you let us know what other time(s) best work for you, we will run them according to demand CLICK HERE.

Happy Investing,

Nick Lockhart
mrd customer care program… because investing is personal

You can register for next Wednesday evening; December 3rd… or nominate a preferred time when you would like us to host one… and if enough people want a lunch time or weekend one e.g. we’ll arrange it!

CLICK HERE TO REGISTER FOR THIS FREE EVENT NOW!

You will learn…

• Four important factors that must be considered if you want to accurately analyse the state of our property market
• Rental market equilibrium; how is it reached and what does it mean
• What are balanced and stressed rental markets and what must follow
• Changing property cycle and fresh wealth creation opportunities
• How the US property market works and why they got themselves into so much trouble
• Why the value of your home will NOT follow that of Europe and the USA
• Plus much more (including answers to YOUR questions, at the end)

Risk is avoided by right knowledge. Don’t assume that you will not learn anything and don’t assume this is a veiled disguise to sell property. mrd is and remains committed to mentoring and providing quality education to those hungry to learn… FREE of charge!

This is an opportunity to INNOCULATE yourself against small mindedness, fear and negativity… or just get a hold of the FACTS so your financial decisions will not be the result of confusing opinions but rather considered reasoning. CONFUSION can produce NO good thing but understanding will empower you to make those decisions that are right for you!

• Register NOW
• Join in our “Virtual Conference Room”
• Gain knowledge
• Dispel confusion
• Eliminate unnecessary risk
• Secure a competitive edge for 2009

The presentation takes about 90 minutes, followed by Q’s & A’s. Hang around and ask a Q or sit back and listen to those asked by other people.

Feedback from our previous 3 Web Seminars: testimonies from attendees

So may I respectfully encourage you to put aside 90 minutes and from the comfort of your own home allow me to take you beyond opinion to economic analysis. I’ll focus on a comprehensive market analysis; from an economics paradigm.

“What In The World Is Going On With Property” Web Seminar

WHERE:
- Online (Broadband connection & Speakers or headphones required)

WHEN:
- Wednesday 3rd December 2008

TIME:
- 6:00pm in WA
- 6:30pm in NT
- 7:00pm in QLD
- 7:30pm in SA
- 8:00pm (NSW, ACT, VIC & TAS)

DURATION:
90 minutes (or less); plus time for questions at the end

PLEASE NOTE:

1. Registrations are essential as we need to send you an invitation link that you click at the allotted time to bring you in on the event
2. In keeping with our policy of keeping education FREE, mrd will be picking up the entire cost of this event; so register now by either phoning or using our secure online link

• Telephone Registration: 0424 144 103
• Register Online – CLICK HERE

CLIENT FEEDBACK FROM EARLIER WEB SEMINARS – Click Here

Thanks, I look forward to “seeing” you there.

Happy Investing,

Nick Lockhart
mrd customer care program… because investing is personal

That means that aside from those 20 who missed out last time, we can accommodate another 30 people; actually 27 now as 3 of those spots have already been taken up.

At The Conclusion Of This Event You Will Understand

• The current state of the Australian property market
• Which way property rents & values are likely to head, when… and why?
• What impact the current economic global slowdown will have on the value of your home and your investments

Nothing good is produced by confusion! So when it comes to you successfully navigating your way forward; in these more turbulent times… DON’T BE CONFUSED; it is a sure recipe for disaster!!!

So if:

• The constant negativity in the media has left you unsettled… even a little; or
• You question where things are at… and what the future may look like; or
• You have been told that Australian property values could fall by up to 40%; then…

It’s time for your inoculation!

My goal for this event is simple:

“DISPEL CONFUSION“

Gaining well researched and sound KNOWLEDGE will position your to make the very best financial decisions in 2009 and beyond. So may I respectfully suggest you place a PRIORITY on participating in this event at this time?

Put aside 90 minutes and, from the comfort of your own home, allow me to move beyond opinion to economic analysis. I want to focus specifically on an analyse of market rents and market values… from an economics paradigm.

MY PROMISE is simple. This “value add” evening will not resemble what I am seeing a bit of lately… desperate real estate agents “pushing their thing”, any way they can. That’s simply not in the DNA of mrd!

BE WARNED:

• There are a lot of “mixed messages” and numerous opinions being bandied right now
• Without sound research and clear understanding this will produce confusion
• Where confusion reigns nothing good is produced
• RIGHT NOW people are making financial decisions, from a position of confusion
• Mistakes are being made every daily

By participating in this FREE event, you will discover that I agree with some of the claims being made by various economists and analysts (some claims line up with warnings that mrd has been sounding for years). You will also learn that I strongly refute other claims being made by some… and I will show you exactly why.

I am not suggesting that you suffer through 90 minutes listening of my subjective (biased) opinions. NO! I will objectively unravel economic reality and look at the ACTUAL current state of our property market. Then, based on solid research and indisputable economic laws… suggest the most likely outcomes for property values and rentals moving forward.

Thanks for the encouraging feedback from those who participated this week. It seems everybody was pleasantly surprised and found the information more relevant and more beneficial than expected.

“What In The World Is Going On With Property” Web Seminar

WHERE:
- Online (Broadband connection & Speakers or headphones required)

WHEN:
- Wednesday 19th November 2008

TIME:
- 6:00pm in WA
- 7:00pm in Qld
- 7:30pm in SA & NT
- 8:00pm (NSW, ACT, VIC & TA)

DURATION:
90 minutes (or less); plus time for questions at the end

Registrations are essential as we need to send you an invitation link that you click at the allotted time to bring you in on the event.

In keeping with our policy of keeping education FREE, mrd will be picking up the entire cost of this event; so register now by either phoning or using our secure online link.

• Telephone Registration: 0424 144 103
• Register Online – CLICK HERE
• Find Out More About This Event – CLICK HERE

CLIENT FEEDBACK FROM EARLIER WEB SEMINARS:
Click Here

Thanks {SPOUSES_SALUTATION}, I hope to “see” you there.

Kind regards,

Nick Lockhart
mrd; Keeping Education FREE!

Those who participated offered encouraging feedback and commented that they thought the information given had been personally beneficial and insightful.

Tomorrow night (Wednesday 12th) I am hosting the 2nd of these two events… and I invite you to participate. I would love the opportunity to clear the air with regards to:

- The current state of the property market

– Which way property rents & values are likely to head; and when

- How will property be affected by the current economic global slowdown

Have you been ‘freaked out’ or concerned by the negative media coverage of recent weeks? Have you heard it said that Australian property values could fall by 40%? To give you the best chance of making right financial decisions for 2009 and beyond; I encourage you to put the time aside to participate in this event! NB: I will not focus on property investing in any traditional sense; instead I will be looking at rents and values from an economics perspective.

WARNING: There are a lot of “mixed messages” being bandied out there right now and people are making financial decisions based on these messages / opinions. Some claims being made I agree with; some line up with long term warnings I have been sounding for years. Others, I strongly refute. I am not interested in simply offering yet another subjective (biased) opinion. I want to objectively unravel the economic reality surrounding the current state of our property market. Then, based on solid research and indisputable economic laws … suggest the most likely outcome for property values moving forward.

“What In The World Is Going On With Property” Web Seminar

WHERE:

Online (Broadband connection & Speakers or headphones required)

WHEN:

Wednesday 12th November 2008

TIME:

6:00pm in WA

7:00pm in Qld

7:30pm in SA & NT

8:00pm (NSW, ACT, VIC & TA)

DURATION:

About an hour and a bit; plus question & answer time at the end

Registrations are essential as we need to send you an invitation link that you click at the allotted time to bring you in on the event. The response for this week’s web seminar has been very strong and is near capacity. We will either have to upgrade the “virtual meeting room” that we have booked to one that can accommodate more people or look at running a third event for next week… and defer some people from this week event.

In keeping with our policy of (wherever possible) keeping education FREE, mrd will be picking up the entire cost of this event. Register for FREE; either online or by phone.

- Register Online or

- Telephone Registration: 0424 144 103

- Find Out More About This Event

Thanks {SPOUSES_SALUTATION}, I hope to “see” you there.

Kind regards,

Nick Lockhart

Register NOW for FREE to participate in Nick’s 2nd mrd web seminar – next Wednesday evening.

On Wednesday evening just gone, Nick clearly articulated FACTS that assisted those who participated to decipher between subjective emotion and objective facts. The result was everybody went away encouraged!!!

Here are just a few testimonies of this landmark FREE event:

1. Chris V Says: Congratulations Nick and to your team on a great webcast. It is very refreshing to hear some opinions (based upon facts) about Australia’s and indeed the world’s economic position with regard to property investing. All the facts for FREE from the comfort of my own armchair!Keep up the good work.
2. Marion C Says: Hi Nick, I have just listened to the webinar. It was great and I learned lots.
3. Shane P Says: Really enjoyed the webinar. It’s good to get the optimistic view with the research behind it, obviously no one knows exactly what’s in store but based on what has happened before now will probably go down as a great time to buy. I would love to chat about a plan going forward.  Would love a copy of the DVD.  Thanks for the follow up.

If you missed last Wed night, we are running another Web Seminar next Wednesday night as well!

NB: Due to the different time zones, these sessions will be held as follows:

2nd “What In The World Is Going On With Property”

FREE Web Seminar; Wednesday 12th November 2008

• 6:00 pm in WA
• 6:30 pm in NT
• 7:00 pm in QLD
• 7:30 pm in SA
• 8:00 pm in VIC & NSW & TA

You will benefit from participating in this online event! We will address the latest issues and up to date, relevant questions many are asking right now.

To read more about this event click here.

To reserve your “virtual” seat simply click here or call 0424-144-103.

mrd, Keeping Education FREE

Last month there was talk that the RBA would drop official interest rates by 50 basis points or 0.5%. I believed there was justification for them dropping rates by a full 100 basis points; or 1%. I kept my opinion to myself and as history has shown, they did…

The majority of the talk from economists, journalists and commentators is that this afternoon the RBA will reduce rates by another 0.5% (50 basis points). A few economists disagree and say that with inflation still high and the impact of the Australian Government’s stimulus package yet to kick in (in about a month they unleash $10.4b on the economy) there will be no rate cut… or perhaps just 0.25% (25 basis points).

I disagree. Personally I believe there is justification for a rate cut of at least 0.75% and perhaps another full 1%.

Yes we have higher inflation, but the job of the RBA is to keep it between 2% and 3% over the cycle and right now the need to avoid recession is paramount. With the exception of Qld & WA (the resource rich states) the rest of Australia – especially NSW – is doing it very tough. Our biggest threat is that unemployment will rise out of control, further fuelling a drop in both business and consumer confidence; already pushed lower than has been economically justified, by irresponsible negative journalism and those ‘painful pessimists’ being given way too much air play.

I can no more pick what the RBA will do than I can a Melbourne Cup winner… but I can offer Nick’s opinion that the announcement of just a 0.5% rate cut this afternoon will only be “tinkering at the edges”. Personally I half expect the Reserve to go further. Regardless, today’s announcement means a happy day for Katrina and me. Who needs to pick a winner on the horses; we are guaranteed a BIG win?

Christmas is just around the corner, presenting the RBA with a natural stimulus OPPORTUNITY before we hit December and many businesses start to wind down. As mentioned the government’s $10.4b stimulus package will kick in in a month and yes that will help. Leaving a rate cut above 0.5% until December (or worse; early 2009) will miss a window of opportunity to give the Australian economy a serious inoculation against very low business and consumer confidence.

I think Melbourne Cup Day 2008 could see a lot of Australian’s and Australian business owners celebrating a great win when the RBA makes it’s announcement this afternoon. If so, don’t be overly surprised. Globally speaking our interest rates are still high and the RBA is mindful of the many businesses contemplating letting staff go prior to Christmas. I believe that some better than expected news is just what is needed.

The government’s stimulus package will go a long way towards getting consumers spending. This will create jobs and lift business profits. My justification for suggesting the RBA could go even further than economists expect is more about confidence and employment than it is about spending, however.

Do you read my articles in our Friday newsletters? I hope you do… in which case you would already know that I have my considered views on many subjects economical. I am not on the RBA board and have no say in what they do to interest rates. So regardless of how far they may move this afternoon, I believe there remains an argument for a cut of at least 0.75%; with more to follow in the months ahead!

CELEBRATE because whether or not you bet on horse races… every mortgage holder will this afternoon celebrate some sort of a financial windfall!

Happy Investing,

Nick Lockhart

PS: Have you been “freaked out” lately thinking house prices in Australia are about to crash by up to 40%? IMPORTANT!!! Before you act on fear, emotion, the counsel from media and/or those pessimists (who are W.R.O.N.G. by the way), why not get the facts? You can register for FREE to participate in one of two web seminars I am hosting – tomorrow evening and next Wednesday evening. I will clearly articulate FACTS and you will go away encouraged!!!

Click here to register for our FREE web seminar now

Have you been “freaked out” lately… thinking house prices in Australia are about to crash by up to 40%?

IMPORTANT!!! Before you act on fear, emotion, the counsel from media and/or those pessimists (who are W.R.O.N.G. by the way), why not get the facts?

Register NOW for FREE to participate in Nick’s 3rd mrd web seminar – next Wednesday evening.

On Wednesday evening just gone, Nick clearly articulated FACTS that assisted those who participated to decipher between subjective emotion and objective facts. The result was everybody went away encouraged!!!

• Are you concerned about the possibility of falling house values?
• Is it too late now to establish a retirement fund?
• Do you feel afraid and pressured to sell?
• Is cashflow a problem right now?
• Do you feel chocked with debt?
• How do you avoid selling… yet still improve your cashflow?
• What are the things that you should be doing right now?
• What are the things that you should NOT be doing right now?

To help you to make better understand where the property market is positioned right now and teach you ways to protect your asset base, I am hosting a couple of web based property market briefings next month.

You are invited to log on & phone in to this event, from the comfort of your own home or office. All you will need is a computer connected to the Internet (broadband connection). We will provide you with a local telephone number and a pin number; so that all you will need to do is call in at the appointed time; at our cost.

NB: Due to the different time zones, these sessions will be held as follows:

2nd “What In The World Is Going On With Property”
FREE Web Seminar; Wednesday 5th November 2008

2nd “What In The World Is Going On With Property”
FREE Web Seminar; Wednesday 12th November 2008

2nd “What In The World Is Going On With Property”
FREE Web Seminar; Wednesday 19th November 2008

Due to the popular demand for this event, we will be repeating it next Wednesday 26th. This event is already filling, register now to avoid disappointment.

4th “What In The World Is Going On With Property”
FREE Web Seminar; Wednesday 26th November 2008

• 6:00 pm in WA
• 6:30 pm in NT
• 7:00 pm in QLD
• 7:30 pm in SA
• 8:00 pm in VIC, NSW & TA

You WILL benefit from participating in this online event! We will address the latest issues and up to date, relevant questions many are asking right now.

To reserve your “virtual” seat simply click here or call 0424-144-103

mrd, Keeping Education FREE