Wondering how to pay off your home loan sooner? We look at some things you could do.
Australian home loan interest rates remain at historic lows, and the opportunities for paying off a mortgage early are better than ever. Used in conjunction with low rates, here are some extra steps that can speed up loan repayments and reduce your loan balance.
Debt is a multiplier. If used correctly, it can fast track your wealth creation, but if used irresponsibly it can destroy your finances and even your livelihood. The Australian economy relies heavily on debt to fund growth. Business enter into debt to fund the purchase of income-producing assets, tools and stock. Governments use debt to fund the development of expensive infrastructure projects.
Investors use debt too. It increase their exposure to the movements of the market through what is know as gearing. Gearing can multiply the profit of an investment, but the downside is that gearing is also know as leverage because, like using leverage to move an object, it multiplies the effects of the market movements on your investment.
As accountants, we strive to help our clients build resilient and successful businesses. In the current business environment, there are both challenges and opportunities.
One component of resilience is to have a clear vision for the business. That means everyone should understand the business ‘destination’, the ‘why’ or the ‘rationale’ for the business. Without this, the business may limp along from project to project from year to year and not provide the best environment for leaders, employees, customers, and other stakeholders.
In times of change, challenge, and opportunity, a clear vision can be exactly the tonic a business needs to distinguish itself and achieve success. Let’s consider some examples of vision statements.
Many of you have no doubt heard about the hype surrounding the video games retailer GameStop (GME) over in the USA. In case you missed it here is a quick recap. Its shares, trading at around $US10 at the start of January, leapt to around $US380 in a matter of days as a coordinated group of retail investors using the reddit chat board “WallStreetBets” noticed that a disproportionately high number of GME shares were being “short sold”.
Many businesses (and certainly many of our clients) find themselves busy with the day-to-day selling, paying bills, marketing, hiring and firing, talking to the bank, managing the office and so on. They know they should plan for the future but who ever gets time for that? They get caught up in the endless cycle of tactical business management.
We encourage and help our clients to take the time to do some serious planning. Consider the following:
1. A strategy is not a plan.
2. A plan is not a strategy.
3. Who decides strategies and plans?
4. When should goal setting, strategizing and planning occur?
5. Some parts of your plan will not make sense.
6. Making plans requires some formality.
7. Revisit plans frequently
8. Write it down.
9. Share the plan.
10. Get some advice.
