What Are You Doing With Spare Cash?
An interesting thought crossed my mind the other day about what we do with our cash.
Most people are still reeling from the goings on of the last 18 months and most people are still feeling the effects of it in one way or another.
Things seem to have settled down, but what we need to be aware of is, “Where to from here?”
• Is the market slowly going to start climbing
• is it going to stay stagnant, or
• is it going to go down again
No-one really has a true idea at the moment, but what I have been wondering about is what you are doing with your cash.
Last year the Rudd Government secured monies in the bank and that was comforting at the time.
But let’s look at the next 5 years. If you have money sitting in an account that is attached to your home loan I am wondering if it would not be a good idea to move that money away from this account and place it in another account. In the US bank accounts attached to home loans were frozen and this brought to mind this situation in Australia.
In no way do I think there is a ‘freezing’ problem, but when you are in business of any kind it pays to err on the side of caution.
Greed is thought to be an underlying factor in the cause of the now economic crisis and when you think about it, the savvy had probably got themselves organised before it happened.
Anyone who has been around the markets for many years, or has studied the markets going back over time, recognises that there is a ‘bust’ after the ‘bubble’. Trouble is no-one wants to acknowledge it when all things are rosy. People just want to keep on making money.
So what I am suggesting is that you have a separate cash account and if the ‘bubble’ starts getting bigger again in the next 7-10 years remember the pitfalls of the last 18 months and keep that account topped up when things are looking extra rosy. It is a bit like a rose in full bloom, isn’t it. It gets bigger and bigger and more beautiful, then almost overnight the petals drop off.
Filed Under: Property Investment Tips • Tax Tips
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