Opportunity Cost
There are two ways to think about the price of anything. The first is the number of dollars it would cost to purchase that thing. The second is to think about what else we could spend our money on. This is called ‘opportunity cost’ and it is always worth remembering when you make a purchase.
Your most important asset
What is your most important financial asset? Is it your home? Your superannuation fund? Your investment portfolio? Your sports car (probably not!)? Actually, it’s you.
Not all debts are the same. Even if the interest rate is.
Did you know that two loans that look identical can have a radically different impact on your financial management? The difference lies in whether interest on a loan is deductible or not.
What makes debt deductible?
There is a big difference between the economic impact of deductible debt and non-deductible debt. This article examines how you can decide whether interest is deductible or not.
Season’s greetings from the world’s most stable economy
As 2017 draws to a close, Australia continues its record breaking run of economic growth. It is quite the gift for all of us. As our way of saying thanks for the good fortune of living here, here are some fun things to celebrate about life in Australia. Please enjoy the holiday period and we look forward to seeing you in 2018.
2017 has not been very interesting
2017 has been a year of low interest - record low interest rates, that is. But record low prices don’t last forever. Interest rates will rise again. In the meantime, make 2018 your year of repaying non-deductible debt. That might make it your best year ever.
100% off everything!
Continuing our theme of behavioural economics, this week we look at anchoring? Anchoring is how people can be mislead into thinking they have bagged a bargain. It also tricks people into selling good investments and keeping bad ones.
More on mental accounting
Last week’s blog was all about mental accounting. This week, we continue the theme and look at some bigger picture ways in which mental accounting can lead us astray.
The best gift voucher in the world
Christmas is coming you might be tempted to buy a gift voucher for someone you care about. Think twice. Gift vouchers are actually irrational.