Episode 40 -  The only way is up

Tim Farrelly is the founder and Principal of Farrelly’s Investment Strategy, an independent investment advisory firm based in Sydney, Australia. Since 2003, his company has helped countless investors create dynamic investment portfolios through their subscription and consultation services.

Tim joins me today to discuss why the only way is up regarding interest rates and the potential impact it can have on borrowers and investors. He explains why banks are raising interest rates on interest-only loans, how the “wage-price spiral” impacts the economy, and how borrowers and investors can prepare for interest rate hikes. He also shares how the population’s overall debt impacts the economy’s vulnerability and the impact that very low interest rates can have on investment markets.

Don’t miss this week’s segment of Reuben’s Rants where I share my thoughts on the recent news of two of Australia’s largest banks, Commonwealth Bank and Westpac Bank, cutting 0.3 percent of interest rates on their online saver accounts, dropping rates down to a whopping 0.5 percent.

And stay tuned to the end of the episode for my Propellerhead of the Week segment to learn strategies to maximize your deductions on your tax returns.

“Interest rates will probably go up, but not very much. We may even see one more rate cut before they go back up.” - Tim Farrelly

This week on The Finance Hour Podcast
Why Tim believes interest rates will eventually go up - but not very much.
Why the cost of banks funding themselves have gone up and how it is impacting interest rates.
Why banks are raising interest rates on interest-only loans.
What are prudential requirements?
What the “wage-price spiral” is and how it impacts the economy, inflation, and interest rates.
How to prepare for the increase in interest rates.
The pros and cons of offset accounts.
How the level of debt people have impacts the economy’s overall vulnerability.
The impact of very low interest rates on various investment markets.

Tim Farrelly’s Top Tips for Preparing for Interest Rate Hikes:
For borrowers: Prepare yourself for an increase in interest rates of up to 2 percent.
For investors: In the secure part of your portfolio, work out how much you need now and how much can be put away for a little bit. Look for the best opportunities that are completely secure and will give you a much better return.

Resources Mentioned:
Reserve Bank of Australia - 2018 Interest Rate Decisions

Connect with Tim Farrelly:
Tim Farrelly on LinkedIn

Subscribe to The Finance Hour Podcast with Reuben Zelwer!

Thanks for tuning into this week’s episode of The Finance Hour Podcast with your host, Reuben Zelwer! If you enjoyed this episode, please head over to iTunes to leave us a rate and review. Subscribe to the show so you never miss an episode and don’t forget to share your favorite episodes with your friends and colleagues. To learn more about Adapt Wealth Management and to connect with Reuben, visit our website or follow us on Facebook and Twitter.

Episode 40 - &nbsp;The only way is up
Tim Farrelly is the founder and Principal of Farrelly&rsquo;s Investment Strategy, an independent investment advisory firm based in Sydney, Australia. Since 2003, his company has helped countless investors create dynamic investment portfolios through their subscription and consultation services.
Tim joins me today to discuss why the only way is up regarding interest rates and the potential impact it can have on borrowers and investors. He explains why banks are raising interest rates on interest-only loans, how the &ldquo;wage-price spiral&rdquo; impacts the economy, and how borrowers and investors can prepare for interest rate hikes. He also shares how the population&rsquo;s overall debt impacts the economy&rsquo;s vulnerability and the impact that very low interest rates can have on investment markets.
Don&rsquo;t miss this week&rsquo;s segment of Reuben&rsquo;s Rants where I share my thoughts on the recent news of two of Australia&rsquo;s largest banks, Commonwealth Bank and Westpac Bank, <a href="https://www.smh.com.au/money/saving/passive-savers-hit-as-banks-slice-rates-on-deposits-20180710-p4zqog.html">cutting 0.3 percent of interest rates on their online saver accounts</a>, dropping rates down to a whopping 0.5 percent.
And stay tuned to the end of the episode for my Propellerhead of the Week segment to learn strategies to maximize your deductions on your tax returns.
&ldquo;Interest rates will probably go up, but not very much. We may even see one more rate cut before they go back up.&rdquo; - Tim Farrelly
This week on The Finance Hour Podcast
<ul>
<li>Why Tim believes interest rates will eventually go up - but not very much.</li>
<li>Why the cost of banks funding themselves have gone up and how it is impacting interest rates.</li>
<li>Why banks are raising interest rates on interest-only loans.</li>
<li>What are prudential requirements?</li>
<li>What the &ldquo;wage-price spiral&rdquo; is and how it impacts the economy, inflation, and interest rates.</li>
<li>How to prepare for the increase in interest rates.</li>
<li>The pros and cons of offset accounts.</li>
<li>How the level of debt people have impacts the economy&rsquo;s overall vulnerability.</li>
<li>The impact of very low interest rates on various investment markets.</li>
</ul>
Tim Farrelly&rsquo;s Top Tips for Preparing for Interest Rate Hikes:
<ol>
<li>For borrowers: Prepare yourself for an increase in interest rates of up to 2 percent.</li>
<li>For investors: In the secure part of your portfolio, work out how much you need now and how much can be put away for a little bit. Look for the best opportunities that are completely secure and will give you a much better return.</li>
</ol>
Resources Mentioned:
<ul>
<li><a href="https://www.rba.gov.au/monetary-policy/int-rate-decisions/2018/">Reserve Bank of Australia - 2018 Interest Rate Decisions</a></li>
</ul>
Connect with Tim Farrelly:
<ul>
<li><a href="https://www.linkedin.com/in/tim-farrelly-139ab7a/">Tim Farrelly on LinkedIn</a></li>
</ul>
Subscribe to The Finance Hour Podcast with Reuben Zelwer!
Thanks for tuning into this week&rsquo;s episode of The Finance Hour Podcast with your host, Reuben Zelwer! If you enjoyed this episode, please head over to <a href="https://itunes.apple.com/au/podcast/finance-hour-on-j-air/id1209371799?mt=2">iTunes</a> to leave us a rate and review. Subscribe to the show so you never miss an episode and don&rsquo;t forget to share your favorite episodes with your friends and colleagues. To learn more about <a href="http://adaptwealth.com.au/">Adapt Wealth Management</a> and to connect with Reuben, visit our website or follow us on <a href="https://www.facebook.com/financehour/">Facebook</a> and <a href="https://twitter.com/reubenzelwer">Twitter</a>.

Financial planner and principal of Adapt Wealth Management, Reuben Zelwer simplifies the world of finance and give you the information, tricks and tips to get ahead.

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