Investment Property Oz Style

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Investment Property OZ Style

Apologies for the late blog today but I was waiting for the RBA interest rate announcements and it is no surprise that the evils of Investment Property have been blamed over the ditch for the .25% rate hike.

Generally I like the OZ governments fiscal policies but sadly in this case they are ignoring the overall picture in my opinion and defaulting back to the same old same old; prices are rising again, investors are making money, let’s slam them to death with interest rates.  I discussed why this is a bad idea before HERE and I am genuinely surprised that a relatively progressive government has resorted to the same blunt implements that caused this problem to try and solve it.

What we have to hope for is the NZ is smart enough to not follow suit.  I have been saying for several months that I believed the worst was yet to come and certainly amongst insolvency professionals and in the USA we are seeing the cracks starting to show up. Christmas will wipe out countless businesses who on top of not paying GST and PAYE will have holiday pay and no income for 6 to 8 weeks, so expect some carnage in the new year.  We do not need high interest rates as part of that equation.

Of course for investors this is all good news and for educated investors it is an early Christmas but I do worry about the average mum and dad with no plans for retirement and no strategy to grow wealth and no understanding of investment property..

I noticed with much mirth this week that the government in NZ finally noticed what I have been preaching for 3 years, that we cannot sustain our pension scheme. It will cost of 17 trillion dollars by 2050 because of the boomers they suddenly realise. If a relatively simple guy like me could figure this out in 2006 just from analysing basic population stats it is a bit sad and a bit scary that it takes professional economists and politicians forever to work it out don’tcha think

So be glad that the action you are taking now to support yourself in retirement through smart investment property purchases is not only a great idea but will be essential if you don’t want to retire into poverty.

Of course you are buying investment property aren’t you ??

Stay Inspired and Stay Safe ~ Dean Letfus

The Ethical Investors Strategist

PS if you bet on the Melbourne Cup you have too much money.  Sort your future out first HERE