Friday, August 29, 2008

Product Newsletter 1 Sept 2008

(right) another investment nearing completion - in the Ipswich growth corridor.

"Too many of us are not living our dreams because we are living our fears." Les Brown


Capital city growth rates for the 12 months to 30 June have been issued by the Australian Bureau of Statistics.

Perth was down 0.9 per cent, but all other capitals were in positive territory

Hobart was up 3 per cent, Canberra 7.2 per cent, Melbourne 14.1 per cent, Brisbane 14 per cent, Sydney 4.4 per cent.

Capital growth is important, but as rents are markedly higher in Brisbane, land tax is the lowest (up to $500,000), and forecast growth is higher there, an astute investor should only be looking at south east Queensland.

Remember – the ideal product should appeal to the ideal tenant, and it should also offer maximum tax benefits to the investor, with the least expenses. And for safety, your investment property should be located in a growth corridor adjacent to a major economic zone.

Of course you don’t need me if you’re just looking for “an investment property”. However you will need my professional expertise if your funds are insufficient for 20-25 years of a dignified retirement, and you’re looking for a hassle-free, above-average result to give you more.

If you want to discuss my very successful formula in more detail, contact me – Bernard Kelly – anytime.

My email is or just hit the return button on this email.


In the past month, each of the big four banks have cut the interest rate on their fixed rate loans. The most recent cut was from the ANZ - its one-year fixed rate will be trimmed by 0.5 per cent to 8.49 per cent from September 1.

We all know that floating rates reflect the price which the Reserve Bank of Australia sells money into the financial markets.

So that pricing occurs after the RBA cuts its rates.

However fixed rates are set by the banks in anticipation of where the RBA’s cash rate pricing will be over the next few years.

Which is why the fixed rates are coming down right now – for example you can get 7.8% for five years right now if you switch to HSBC.

That’s a long way below the advertised 9.3% that you often see quoted for floating rate loans, and still a full 1% below the actual market rate most of us are currently paying for our floating rate loans.

So now is the time to lock in your fixed rate loans.

Don’t leave it until the RBA is down near the bottom of its interest rate cycle, because by then the professionals will be thinking “rates can only go up from here”, and so the fixed rate deals will have already gone up, in anticipation.

If you need an introduction to a funding strategist at the peak of their profession, contact me – Bernard Kelly.

My email is or simply hit the return button on this email.


Many of my private clients come to me still carrying substantial mortgages even within 10 years of retirement.

This can be a major millstone, because if you try to pay off such a mortgage out of earned income, you may have nothing – except some super – to take into retirement.

And as you can’t support a mortgage after you have retired, you may have to dip into your super to repay the bank.

It is interesting to reflect on how we have come to have such large mortgages late in life - when our parents didn’t have this problem at all.

The difference is that we are now marrying later, and having children later. And those children often don’t finish their education until they are in their 20s.

So the trade- off has become supporting children through their last years of education, or planning for retirement.

Fortunately an investment property can neutralise most late-career mortgages and then your second and third will be available to boost funding to enable you to plan for 20-25 years of dignified retirement.

If you would like me to help you explore your options, contact me – Bernard Kelly anytime.

My email is or simply hit the return button on this email.