Mike's Blog
Year End
Christmas is fast approaching and it is timely to look back on the year and consider what we could have done differently and what fine-tuning of our lifestyle plans might need to be implemented in the year ahead.
Floating Loan Reviews
Most of our clients now have multiple floating loan accounts as a consequence of fixed rate expiries. An opportunity therefore exists for clients to merge and reduce the number of accounts that they have. If this would be helpful, please let us know so we can work through the logistics with you.
Loan Repayment Strategy
One way clients can get ahead with their loan repayment plans is to ask our Client Care team to take away some of their surplus funds from their loan account from time to time. You do lose the access to this money, but your loan balance reduces by the amount that is repaid; quite an effective way of shortening your loan’s life. You can do this as often as you like, and usually at no cost.
When Insurance Pays Off...
You know that I am an ardent advocate of adequately insuring yourself and that I regard doing so as an investment in your future welfare. Imagine a neighbour. She is in her forties, has just been diagnosed with a cancer and requires an urgent operation. This is a most tragic situation.
Interest Rates
The official cash rate was held at 2.5% by the Reserve Bank at this month’s review. Persuasive factors included our modest level of economic activity, a relatively high rate of unemployment, the acceptable rate of underlying inflation, and difficult international conditions.
New Property Insurer?
We are currently evaluating the potential services of another property insurer. I will let you know more once we have completed the evaluation, through my regular newsletter or through this blog.
DebtNav
I have been amazed at the extent that some clients are using Debt Nav to manage their monthly expenditure, even to the point of deciding if they can go out for a meal. The system certainly provides visibility as to where you are at with your loan repayment plan and of course, opens up new opportunities for potential savings. Read more about DebtNav here, or just give me a call.
Loan Affordability
Over the past few years, we have been calculating our clients’ loan servicing ability at a higher than normal interest rate. We have generally used a rate of between 8 to 8.5% for this purpose. Our thinking is that if our clients can comfortably service their borrowings at these higher rates, then they should not be too disadvantaged if and once rates start to rise again.
ARE WE NZ's BEST KEPT SECRET?
Our client satisfaction surveys confirm that our clients rate our services very highly, yet we are not top of mind in the general market place. We rely very much on recommendations from our existing client base. Advertising isn't really an option for us as we would simply be compared against the banks and in most people's minds (who don't know any better) the banking system is the 'be all and end all'.
Insurance
The implications of a calamity or disaster (property or personal) on the achievement of your life plans must not be underated as I have mentioned many times. A solid risk management program, and one that can be reviewed every year, should be a serious consideration for us all.
