Forum Replies Created
Hi John
Merry Christmas to you. Yes there have been some challenges this year, but two interest rate cuts in a row and a solid base we're in overall good shape. Sometimes when looking at our own situation, we can't see the "wood for the trees".
I got this article through a friend in the US and it helps to get an idea of what others think about the situation we find ourselves in.
It's another point of view worth looking at.In short, the U.S. government is in hock to its eyeballs… And Europe is in worse shape than the U.S. But according to the IMF, Australia will be net debt free by 2020.
While the U.S. government will stay busy printing money, the Australian government will stay busy cashing mining royalty checks with no end in sight…
You see, the Australian government owns the mineral and petroleum resources of Australia. (That's different from the U.S., where mineral rights can be privately owned.) And that makes Australia rich…
Australia is chock-full of commodities that are in demand all around the globe…
I remember standing in Iceland a couple years ago, staring at a massive aluminum smelter that was a few city blocks long. The raw bauxite was shipped in from Australia – as far across the planet as you could get. In short, the far corners of the world need bauxite… and Australia has it.
Aluminum is only a tiny part of the big story of Australia's commodity reserves…
Australia leads the world in "economically recoverable reserves" in many commodities… lead, zinc, uranium, nickel, and more. It ranks second in the world in economically recoverable reserves in gold, silver, copper, and more, according to the Australian Bureau of Statistics.
And then there's "China's Gold" – iron ore… the raw material in steel making. China needs it… Australia's got it.
"Where on earth is your money safe these days?" That is THE question. When you look at the debt trends, it's NOT safe in America. And it's NOT safe in Europe.
But the fact that the Australian government owns its resources, and it will be net debt free by 2020, makes Australia a safe country for your money. In a way, the nation's currency – the Australian dollar issued by the government – is solidly "backed" by the country's vast natural resources, owned by the government.
The major risk here is what happens to Australia if China crashes?
There's no mistaking the fact that the Australian dollar is highly correlated to commodity prices. Exports of iron and coal alone make up 39% of Australia's total merchandise exports. If China stops buying, Australia will take a big hit.
However, I think the Australian government is in better shape to handle a crisis than any country in the world. The typical government "tools" to fight back a crisis are to 1) borrow money and 2) cut interest rates.
With no debt and a very high (4.25%) deposit rate, Australia has plenty of room to do both today.
I could go on. But you get the idea…
For the long run, Australia's dollar is safe. And with high interest rates, it's good for the short-run, too.
Australia might just be the last safe country on earth for your money.
After that, I'd then read these three articles (and see how you feel about it things after all this!)http://www.investorsdirect.com.au/articles/what-lies-ahead.html
http://investorsdirect.com.au/exclusive/how-to-find-value-in-any-real-estate-market.html
http://investorsdirect.com.au/articles/big-australia-vs-small-australia.htmlMC & HNY!
Mark
Hello Paul
Welcome to the forum and the world of property investing.
You've posed a good question. As Marketing Manager for Investors Direct, I would naturally say that you should check out some of Bill Zheng's articles (he's our MD) on our website at http://www.investorsdirect.com.au/articles.html
But I say that because I think you would find he has a good "alternative viewpoint" to a lot of what many of the other property "spruikers" out there would say.
I do know that when it comes to mentoring, Bill has many clients who seek his counsel on a regular basis. They come in a for a 6 month review, sit down with Bill who goes through their portfolio with them, asks for an update on their plans and goals, what's happening in their lives right now, what their future plans are and how they are going in achieving their goals. Based on their discussion he then recommends some fine tuning of their portfolio or in some cases.. just a steady as she goes approach.
Coming from a finance, rather than property background, Bill has a lot of "smarts" around money and finance and ultimately that's what a lot of clients are seeking, some financial mentoring. Our Language of Money program for example provides a strong and solid foundation of financial discipline which is the best possible underpinning to any investing strategy, property or otherwise.
JackFlash wrote:mafarelly wrote:It's been written by Bill Zheng, founder of Investors Direct.He's renowned for having his own independent view of the market and doesn't alway agree with other commentators
Another pump and dump thread from an industry insider. Things a bit slow at the office Mark If his views are independent I'm a monkey's uncle. The guys just another property spruiker running a property centric business. His conclusions are based on airy fairy assumptions that an amateur economist would pull apart in seconds. Jack
Hey Jack
Actually things are frantic in the office. (Hence have not had a chance to get back to the forum for days!) Trust you're busy too.
We've all been busy expanding the company, adding new divisions in rental property management and other areas. We are continuing to take enquiries from clients interested in how the properties we are recommending are way outperforming the market, based on Bill's insightful analysis and long experience. His independence derives from the fact we are not beholden to any particular group in any market.
But anyway, maybe you're right. Maybe an amateur economist might do a better job of analysing the markets, the economy etc… because god knows the professionals can't!
Cheers
markMy top tips:
– Have a plan, with a defined goal and a deadline to acheive it by. You won't acheive a goal if you haven't defined it and set a deadline to achieve it by.
– Find a wise mentor who can give you worthwhile, prudent and trusted advice.
– Use a workable, proven and effective system to manage your investments
– Ensure the data and advice you are being given is accurate and based on sound principles and proven strategies
– Avoid the temptation to "get rich quick"
