1 00:00:00,200 --> 00:00:03,800 Speaker 1: Attention and intention, how to use these interest rate cuts 2 00:00:04,160 --> 00:00:08,520 Speaker 1: to your financial advantage, both today and well into the 3 00:00:08,680 --> 00:00:40,560 Speaker 1: long run. This is Sugar Mama's Fireplay. Hello, and welcome 4 00:00:40,560 --> 00:00:43,600 Speaker 1: back to another episode of Sugar Mamma's Fireplay. I just 5 00:00:43,680 --> 00:00:46,280 Speaker 1: want to take a quick moment to say how grateful 6 00:00:46,280 --> 00:00:48,520 Speaker 1: I am that you are here, how happy it makes 7 00:00:48,560 --> 00:00:51,720 Speaker 1: me knowing that you're listening to this episode every single 8 00:00:51,960 --> 00:00:55,360 Speaker 1: Monday morning, and that I get the opportunity and the 9 00:00:55,440 --> 00:00:58,640 Speaker 1: honor to be able to guide you, to give you 10 00:00:58,760 --> 00:01:02,160 Speaker 1: great financial information and education, but also to empower you 11 00:01:02,720 --> 00:01:07,240 Speaker 1: to work on your financial wellbeing, to build passive income, 12 00:01:07,440 --> 00:01:10,920 Speaker 1: to reduce the debt, to build up those emergency savings, 13 00:01:11,280 --> 00:01:14,960 Speaker 1: and to feel so much relief and financial harmony in 14 00:01:14,959 --> 00:01:17,720 Speaker 1: your life as you look at all those exciting financial 15 00:01:17,720 --> 00:01:19,760 Speaker 1: goals that you might be working on now, but also 16 00:01:19,800 --> 00:01:22,200 Speaker 1: the new ones that you are ready to launch and 17 00:01:22,240 --> 00:01:25,160 Speaker 1: start working on in your financial future. So thank you 18 00:01:25,200 --> 00:01:27,280 Speaker 1: so much for being here and allowing me to be 19 00:01:27,319 --> 00:01:30,200 Speaker 1: a part of your Monday morning routine. Now, today, I 20 00:01:30,240 --> 00:01:32,720 Speaker 1: want to talk to you about the interest rate cuts, 21 00:01:32,760 --> 00:01:34,959 Speaker 1: what they mean for you, and how to make them 22 00:01:35,040 --> 00:01:37,880 Speaker 1: most of them, not just today, but well into the future, 23 00:01:37,920 --> 00:01:40,280 Speaker 1: because I don't want to just be a quick fix 24 00:01:40,319 --> 00:01:42,160 Speaker 1: when it comes to financial stresses in your life. I 25 00:01:42,200 --> 00:01:45,520 Speaker 1: want to be able to give you solutions, ideas, inspiration, 26 00:01:45,800 --> 00:01:49,280 Speaker 1: and strategies so you can go from strength to strength. 27 00:01:49,320 --> 00:01:51,639 Speaker 1: It's not just about paying off debt, but it's perhaps 28 00:01:51,680 --> 00:01:55,520 Speaker 1: about investing, or it's about preparing to have a wonderful retirement, 29 00:01:55,640 --> 00:01:58,520 Speaker 1: or all the other various investment strategies that we talk about, 30 00:01:58,560 --> 00:02:01,280 Speaker 1: like debt recycling. It's a journey. It's not about quick 31 00:02:01,320 --> 00:02:05,600 Speaker 1: fixes and short stories. It's about really allowing the financial 32 00:02:05,600 --> 00:02:08,280 Speaker 1: well being to infiltrate in your life in so many 33 00:02:08,320 --> 00:02:10,800 Speaker 1: different areas and obviously reap all the wonderful benefits that 34 00:02:10,840 --> 00:02:14,239 Speaker 1: come from this. Now, as you know, we recently had 35 00:02:14,520 --> 00:02:18,000 Speaker 1: a very much welcomed interest rate cut of twenty five 36 00:02:18,120 --> 00:02:22,080 Speaker 1: basis points, and thank goodness, most of the banks have 37 00:02:22,240 --> 00:02:25,440 Speaker 1: passed this on, and of course there is talk that 38 00:02:25,440 --> 00:02:29,079 Speaker 1: there may be another interest rate cut just around the corner, 39 00:02:29,120 --> 00:02:31,720 Speaker 1: in fact, in just a matter of days, that is 40 00:02:31,760 --> 00:02:35,200 Speaker 1: the twentieth of May. Now, as we look at these 41 00:02:35,200 --> 00:02:37,240 Speaker 1: particular cuts, I just want to sort of point something 42 00:02:37,280 --> 00:02:39,720 Speaker 1: out to you if you didn't know this about me, 43 00:02:39,919 --> 00:02:42,840 Speaker 1: I'm actually really protective of you. I want to make 44 00:02:42,880 --> 00:02:45,760 Speaker 1: sure that you were getting the best general advice, that 45 00:02:45,840 --> 00:02:48,720 Speaker 1: you understand all the different options that are available, and 46 00:02:48,760 --> 00:02:51,120 Speaker 1: it's easy to work out what is good for you 47 00:02:51,240 --> 00:02:53,160 Speaker 1: or what is right for you and your loved ones. 48 00:02:54,000 --> 00:02:56,840 Speaker 1: So I want to talk about what happens in what 49 00:02:56,919 --> 00:02:58,920 Speaker 1: to do with the cut that we just had, but 50 00:02:59,120 --> 00:03:03,079 Speaker 1: also what to do if we get more cuts. So 51 00:03:03,400 --> 00:03:05,959 Speaker 1: this is the big thing for me, and I really 52 00:03:05,960 --> 00:03:07,520 Speaker 1: want to make sure that you understand this so you 53 00:03:07,520 --> 00:03:11,440 Speaker 1: can have the attention, the awareness, and of course you 54 00:03:11,520 --> 00:03:16,800 Speaker 1: make some great decisions and choices with intention and precision. 55 00:03:17,240 --> 00:03:19,560 Speaker 1: Because I don't want this interest rate cut just to be, 56 00:03:19,919 --> 00:03:22,280 Speaker 1: you know, a sense of financial relief. I want to 57 00:03:22,280 --> 00:03:25,400 Speaker 1: flick the switch and actually go deeper and wider with this. 58 00:03:25,440 --> 00:03:27,639 Speaker 1: I want to just to see this interest rate cut 59 00:03:27,680 --> 00:03:30,480 Speaker 1: and future interest rate cuts as an opportunity to really 60 00:03:31,280 --> 00:03:36,160 Speaker 1: get ahead financially, proactively reduce the financial stress in our 61 00:03:36,240 --> 00:03:38,720 Speaker 1: lives today, but also feel well into the future, to 62 00:03:38,840 --> 00:03:42,320 Speaker 1: realize how many options out there now exist to improve 63 00:03:42,320 --> 00:03:45,080 Speaker 1: our financial wellbeing, and of course to make a serious 64 00:03:45,200 --> 00:03:48,320 Speaker 1: dent on our debt. So we're going to talk exactly 65 00:03:48,360 --> 00:03:51,600 Speaker 1: about this right now today, and I want you to 66 00:03:51,640 --> 00:03:54,440 Speaker 1: look back in say, five years time, going, gosh, I'm 67 00:03:54,480 --> 00:03:56,360 Speaker 1: so glad I listened to that particular episode on Sugar 68 00:03:56,400 --> 00:04:00,680 Speaker 1: Mama's Fireplay because the things I learned from that episode applied, 69 00:04:01,200 --> 00:04:05,040 Speaker 1: and I am so glad I did. So let's get started, 70 00:04:05,360 --> 00:04:08,320 Speaker 1: all right. First of all, what to do when interest 71 00:04:08,360 --> 00:04:11,840 Speaker 1: rates drop? Now, the first thing is to find out 72 00:04:11,840 --> 00:04:15,960 Speaker 1: whether your lender actually passed on the full rate cut. 73 00:04:16,520 --> 00:04:18,599 Speaker 1: Often people you know will see on the headline's interest 74 00:04:18,640 --> 00:04:20,480 Speaker 1: rates have been cut, and they assume that their banks 75 00:04:20,480 --> 00:04:23,880 Speaker 1: will apply that cut in full to their mortgage. But 76 00:04:23,920 --> 00:04:27,320 Speaker 1: it's not necessarily the case. There's often a delay as 77 00:04:27,360 --> 00:04:30,360 Speaker 1: the banks you make a decision and obviously make that announcement, 78 00:04:30,400 --> 00:04:33,960 Speaker 1: and then the rate is actually applied, but then they 79 00:04:34,000 --> 00:04:37,559 Speaker 1: may not necessarily apply it in full. They might maybe 80 00:04:37,720 --> 00:04:40,680 Speaker 1: apply half of the interest rate cut. So you want 81 00:04:40,720 --> 00:04:43,520 Speaker 1: to know exactly what your bank have done, how have 82 00:04:43,640 --> 00:04:45,560 Speaker 1: they passed that on to you? If they kept that 83 00:04:45,640 --> 00:04:48,600 Speaker 1: interest rate cut for them for themselves. Now, once you've 84 00:04:48,640 --> 00:04:50,080 Speaker 1: found out what they've done, I want you to go 85 00:04:50,120 --> 00:04:54,679 Speaker 1: and check the rate that they're offering new customers. Now, 86 00:04:54,800 --> 00:04:57,440 Speaker 1: this is an important thing to do because if you're 87 00:04:57,480 --> 00:05:00,279 Speaker 1: if they're offering a lower interest rate to new customers 88 00:05:00,320 --> 00:05:02,840 Speaker 1: than what you are paying, that is a sign there 89 00:05:02,880 --> 00:05:04,400 Speaker 1: is a bit of a wiggle room for you to 90 00:05:04,440 --> 00:05:07,480 Speaker 1: contact the bank and ask that they beat that rate 91 00:05:07,680 --> 00:05:12,440 Speaker 1: or as an absolute minimum, match that rate. So whilst 92 00:05:12,440 --> 00:05:14,640 Speaker 1: we've recently had a cut, then potentially might be a 93 00:05:14,680 --> 00:05:19,080 Speaker 1: second cut just by making this phone call to your bank. Now, 94 00:05:19,120 --> 00:05:22,120 Speaker 1: if your bank says, sorry, no, we can't match the 95 00:05:22,200 --> 00:05:25,560 Speaker 1: same rate as what we're offering you customers, you need 96 00:05:25,600 --> 00:05:29,359 Speaker 1: to ask them why, because that is simply not good enough. 97 00:05:30,080 --> 00:05:32,880 Speaker 1: And once they've given you that answer, you can politely 98 00:05:33,040 --> 00:05:36,359 Speaker 1: and obviously respectfully let them know that you'll be shopping 99 00:05:36,400 --> 00:05:38,680 Speaker 1: around for a better deal. And that is your sign 100 00:05:38,720 --> 00:05:41,680 Speaker 1: to go and reach out to a mortgage broker and 101 00:05:41,760 --> 00:05:43,960 Speaker 1: let them do all the heavy lifting and shopping around 102 00:05:44,000 --> 00:05:46,880 Speaker 1: for you to get you a better interest rate. Loyalty 103 00:05:46,960 --> 00:05:50,599 Speaker 1: tax is expensive, don't get complacent because there are serious 104 00:05:50,640 --> 00:05:53,359 Speaker 1: savings to be had in this. Now, you want to 105 00:05:53,360 --> 00:05:56,159 Speaker 1: make sure whilst you're doing all of this work, is 106 00:05:56,200 --> 00:05:59,839 Speaker 1: that the interest rate obviously has been applied, but more importantly, 107 00:06:00,279 --> 00:06:04,320 Speaker 1: how has this interest rate been applied? Now? Some banks 108 00:06:04,360 --> 00:06:07,760 Speaker 1: will pass on that reduced rate, but keep your repayments 109 00:06:08,360 --> 00:06:12,599 Speaker 1: exactly as they were prior to the cut. Now, this 110 00:06:12,680 --> 00:06:15,880 Speaker 1: is really important because it actually helps you get ahead 111 00:06:16,040 --> 00:06:20,080 Speaker 1: faster without having to lift a finger, whilst others might 112 00:06:20,120 --> 00:06:25,120 Speaker 1: actually automatically lower your monthly or fortnightly repayments in alignment 113 00:06:25,279 --> 00:06:29,440 Speaker 1: to that cut. Regardless, it is absolutely crucial to know 114 00:06:29,640 --> 00:06:33,080 Speaker 1: what is happening to your repayments because obviously that impacts 115 00:06:33,160 --> 00:06:36,479 Speaker 1: your cash flow. Now, depending on when you signed your 116 00:06:36,520 --> 00:06:39,360 Speaker 1: mortgage papers, quite often there was a little box that 117 00:06:39,400 --> 00:06:42,040 Speaker 1: you may have ticked and it would have been a 118 00:06:42,160 --> 00:06:45,599 Speaker 1: question as to how you want interest rate cuts applied 119 00:06:45,600 --> 00:06:47,960 Speaker 1: to your homelands, and you would have selected one or 120 00:06:48,000 --> 00:06:50,320 Speaker 1: the other. Now that is where they would have applied 121 00:06:50,320 --> 00:06:52,880 Speaker 1: that particular rule. But for most people they can't actually 122 00:06:52,920 --> 00:06:55,880 Speaker 1: remember which box they ticked, and most people will actually 123 00:06:55,920 --> 00:07:01,039 Speaker 1: automatically select the option to lower their monthly payments. But 124 00:07:01,200 --> 00:07:04,680 Speaker 1: you must find out exactly how the bank have passed 125 00:07:04,680 --> 00:07:07,560 Speaker 1: on that cut, because that will then indicate how they're 126 00:07:07,560 --> 00:07:12,080 Speaker 1: going to be applying future cuts as well. Now, this 127 00:07:12,160 --> 00:07:14,640 Speaker 1: is the challenge they have for you, and I say 128 00:07:14,640 --> 00:07:18,720 Speaker 1: this with a complete respect, compassionate understanding of the rising 129 00:07:18,760 --> 00:07:21,840 Speaker 1: cost of the bin and how tight everyone including my 130 00:07:22,000 --> 00:07:24,600 Speaker 1: own family are doing right now with just trying to 131 00:07:24,680 --> 00:07:28,440 Speaker 1: keep your head above water. Now, let's just all take 132 00:07:28,440 --> 00:07:31,240 Speaker 1: a big step back as well. We've had thirteen interest 133 00:07:31,320 --> 00:07:34,280 Speaker 1: rate rises, so the fact we are still hanging in 134 00:07:34,320 --> 00:07:38,160 Speaker 1: there is admirable and we should really feel proud of 135 00:07:38,160 --> 00:07:42,080 Speaker 1: ourselves and just give ourselves a much needed pat on 136 00:07:42,120 --> 00:07:45,400 Speaker 1: the back. But he's also the other thing. It shows 137 00:07:45,480 --> 00:07:47,480 Speaker 1: us how strong we are. We're so much stronger than 138 00:07:47,480 --> 00:07:51,160 Speaker 1: what we realize. So if you've been coping with higher repayments, 139 00:07:51,600 --> 00:07:53,960 Speaker 1: try your very best to keep them at the same 140 00:07:54,000 --> 00:07:57,080 Speaker 1: amount if you can, even though the bank may have 141 00:07:57,120 --> 00:08:01,400 Speaker 1: reduced your minimum repayments automatically. And of course if you 142 00:08:01,400 --> 00:08:05,440 Speaker 1: can only meet halfway, that's okay, that's still amazing. Just 143 00:08:05,560 --> 00:08:08,560 Speaker 1: as much as you can try and reduce sitting on 144 00:08:08,600 --> 00:08:12,680 Speaker 1: the minimum repayments when it comes to your mortgage. Now, 145 00:08:12,800 --> 00:08:16,480 Speaker 1: to help give you some information will obviously fuel your motivation. 146 00:08:16,520 --> 00:08:19,280 Speaker 1: I want to give you some examples to see really 147 00:08:19,320 --> 00:08:23,240 Speaker 1: what savings can be had by paying more than the minimum. 148 00:08:23,800 --> 00:08:26,320 Speaker 1: Say you've got an eight hundred thousand dollars mortgage, and 149 00:08:26,400 --> 00:08:28,120 Speaker 1: say you're on a thirty year term that you just 150 00:08:28,200 --> 00:08:31,280 Speaker 1: recently took out, if your interest rate drops from say 151 00:08:31,360 --> 00:08:34,920 Speaker 1: six point two five percent per annum to six percent, 152 00:08:35,040 --> 00:08:37,680 Speaker 1: assuming that the full twenty five basis points was passed 153 00:08:37,720 --> 00:08:41,120 Speaker 1: on by your bank and its entirety and your payments, 154 00:08:41,360 --> 00:08:44,160 Speaker 1: assuming again that they have automatically reduced an alignment to 155 00:08:44,200 --> 00:08:47,079 Speaker 1: that interest rate cart they'll be going from four nine 156 00:08:47,160 --> 00:08:49,960 Speaker 1: hundred and thirty down to four thousand, eight hundred, So 157 00:08:50,080 --> 00:08:53,480 Speaker 1: technically you're saving about one hundred and thirty dollars per month. 158 00:08:54,160 --> 00:08:57,160 Speaker 1: But here's the thing. If you can find a happy 159 00:08:57,200 --> 00:08:59,920 Speaker 1: medium balance where you decide to I guess, meet halfway 160 00:09:00,360 --> 00:09:03,040 Speaker 1: and keep your repayments that say four thousand, eight hundred 161 00:09:03,080 --> 00:09:05,960 Speaker 1: and sixty five, and obviously that meaning that the other 162 00:09:06,040 --> 00:09:08,800 Speaker 1: half of that interest rate cut gets put back into 163 00:09:08,840 --> 00:09:11,480 Speaker 1: your budget, I guess create some relief and a layer 164 00:09:11,520 --> 00:09:15,040 Speaker 1: to get back on top of things. You potentially save 165 00:09:15,640 --> 00:09:19,680 Speaker 1: thirty nine thousand, nine hundred dollars in interest over the 166 00:09:19,720 --> 00:09:22,800 Speaker 1: life of that loan and pay off your home loan 167 00:09:23,080 --> 00:09:27,680 Speaker 1: just over one year sooner. Now, that's just assuming that 168 00:09:27,720 --> 00:09:29,839 Speaker 1: we have no more interest rate rises and of course 169 00:09:29,960 --> 00:09:33,640 Speaker 1: no more interest rate cuts. That's almost forty thousand dollars 170 00:09:34,160 --> 00:09:36,560 Speaker 1: with after tax money that gets to stay in your 171 00:09:36,640 --> 00:09:39,600 Speaker 1: pocket by doing this, and that is just by meeting halfway, 172 00:09:39,600 --> 00:09:42,160 Speaker 1: that's an extra sixty five dollars per month on the 173 00:09:42,200 --> 00:09:45,600 Speaker 1: home loan. So please know that this isn't actually about 174 00:09:45,800 --> 00:09:50,480 Speaker 1: punishing yourself or depriving yourself. It's actually about attention, being 175 00:09:50,600 --> 00:09:52,840 Speaker 1: aware of interest rate cuts and how they're being applied 176 00:09:52,920 --> 00:09:56,600 Speaker 1: or not to your payments, and then taking an intentional 177 00:09:56,800 --> 00:10:00,319 Speaker 1: decision and action as to how you're going to use 178 00:10:00,360 --> 00:10:04,120 Speaker 1: these to your financial advantage. So it's very much about 179 00:10:04,120 --> 00:10:07,400 Speaker 1: discipline here and avoiding that sneaky thing that we all 180 00:10:07,400 --> 00:10:11,080 Speaker 1: know is called the lifestyle creep. No, these small changes 181 00:10:11,240 --> 00:10:14,200 Speaker 1: matter way more than you realize, So I really want 182 00:10:14,200 --> 00:10:17,600 Speaker 1: you to use this to your financial advantage and use 183 00:10:17,640 --> 00:10:20,720 Speaker 1: this as an opportunity to sit down review your budget 184 00:10:20,920 --> 00:10:24,480 Speaker 1: and see what you can safely afford and how you 185 00:10:24,480 --> 00:10:28,760 Speaker 1: can actually increase your mortgage repayments above those minimum repayments, 186 00:10:28,800 --> 00:10:31,200 Speaker 1: and ideally make sure that you try and have this 187 00:10:31,280 --> 00:10:34,880 Speaker 1: applied in an automatic repayment, and that might be just 188 00:10:35,480 --> 00:10:38,560 Speaker 1: going into your Internet banking and adjusting the minimum repayment 189 00:10:38,600 --> 00:10:40,520 Speaker 1: to bring it up to what it previously was. Before 190 00:10:40,880 --> 00:10:44,600 Speaker 1: or perhaps setting up an additional automatic extra repayment so 191 00:10:44,679 --> 00:10:47,520 Speaker 1: has the same impact on your cash flow. As I said, 192 00:10:47,520 --> 00:10:50,600 Speaker 1: this is just a simple example of just an extra 193 00:10:50,720 --> 00:10:53,439 Speaker 1: sixty five dollars per month. Break that down over a week, 194 00:10:53,600 --> 00:10:56,960 Speaker 1: it's not even twenty dollars. So this is money that 195 00:10:57,120 --> 00:11:00,679 Speaker 1: is really being used wisely. Now to help you stay 196 00:11:01,160 --> 00:11:03,320 Speaker 1: really motivated, I'm gonna share with you one of my 197 00:11:03,400 --> 00:11:06,880 Speaker 1: absolute favorite tools I personally built myself, and yes it 198 00:11:06,960 --> 00:11:10,120 Speaker 1: is free. So when you're reviewing your budget and you 199 00:11:10,160 --> 00:11:13,280 Speaker 1: actually can sort of see what's possible, I recommend jumping 200 00:11:13,320 --> 00:11:16,480 Speaker 1: onto the Sugar Mama website, go to the calculator section 201 00:11:16,640 --> 00:11:20,160 Speaker 1: and go to extra repayments calculator. I'll go and link 202 00:11:20,200 --> 00:11:22,960 Speaker 1: it in the podcast notes. You Now, what this tool 203 00:11:23,040 --> 00:11:26,240 Speaker 1: does is it helps you visualize the impact of very 204 00:11:26,280 --> 00:11:31,679 Speaker 1: small extra repayments. Now, unlike standard extra lump sum extra 205 00:11:31,760 --> 00:11:35,840 Speaker 1: payment sorry, this one actually allows you to combine the 206 00:11:35,880 --> 00:11:39,680 Speaker 1: impact of an additional lump sum repayment on top of 207 00:11:39,760 --> 00:11:43,480 Speaker 1: those extra repayments. So for example, you know, say you 208 00:11:43,480 --> 00:11:46,320 Speaker 1: get a tax refund or a bonus, you can actually 209 00:11:46,360 --> 00:11:50,319 Speaker 1: add this in on top of increasing your extra repayments, 210 00:11:50,720 --> 00:11:53,960 Speaker 1: so you can see exactly how much time and money 211 00:11:54,440 --> 00:11:58,680 Speaker 1: you can save by actually applying this advice to your budget, 212 00:11:58,679 --> 00:12:01,120 Speaker 1: to your cash slow, to your financial goals, and of 213 00:12:01,160 --> 00:12:04,440 Speaker 1: course your mortgage. And when you see the impact and 214 00:12:04,480 --> 00:12:06,560 Speaker 1: see how much money you can potentially say it is 215 00:12:06,920 --> 00:12:09,960 Speaker 1: beyond motivating. You get so excited and every fact you're 216 00:12:09,960 --> 00:12:11,640 Speaker 1: actually you inspires you to go back to your budget 217 00:12:11,679 --> 00:12:13,120 Speaker 1: and see what other money you can come up with, 218 00:12:13,520 --> 00:12:14,959 Speaker 1: do you know, take out of your budget to put 219 00:12:15,000 --> 00:12:17,680 Speaker 1: towards you know, enjoying a mortgage free life, which we 220 00:12:17,840 --> 00:12:21,240 Speaker 1: know would be fabulous. So when those numbers are in 221 00:12:21,280 --> 00:12:24,480 Speaker 1: front of you, it's really hard to actually ignore the 222 00:12:24,640 --> 00:12:27,959 Speaker 1: power these facts and figures actually have over you in 223 00:12:28,000 --> 00:12:31,160 Speaker 1: improving your financial wellbeing. And as I said, you know 224 00:12:31,679 --> 00:12:34,120 Speaker 1: yet this another public casted before the average Australian gets 225 00:12:34,160 --> 00:12:35,880 Speaker 1: back about two and a half thousand dollars a year. 226 00:12:35,960 --> 00:12:39,040 Speaker 1: So if we go back to that example of you know, 227 00:12:39,080 --> 00:12:42,880 Speaker 1: the mortgage, the eight hundred thousand dollars mortgage, and applied 228 00:12:43,040 --> 00:12:45,920 Speaker 1: a two and a half thousand dollar lump sum repayment 229 00:12:45,960 --> 00:12:50,000 Speaker 1: on top of the extra sixty five dollars per month repayments, 230 00:12:50,440 --> 00:12:52,679 Speaker 1: that actually will save you not just thirty nine thousand 231 00:12:52,720 --> 00:12:55,520 Speaker 1: dollars a year, but actually close to fifty one thousand 232 00:12:55,559 --> 00:12:58,120 Speaker 1: dollars a year, and you'll have your homelan paid off 233 00:12:58,240 --> 00:13:01,560 Speaker 1: fifteen months sooner. Now, again keeping in mind that's just 234 00:13:01,800 --> 00:13:05,680 Speaker 1: one tax refund in one year, imagine if you do 235 00:13:05,760 --> 00:13:07,880 Speaker 1: that every single year, it's going to have an incredible 236 00:13:07,920 --> 00:13:11,640 Speaker 1: impact and really shaving off tens of thousands of dollars 237 00:13:12,040 --> 00:13:14,079 Speaker 1: off your home loan on top of what we've already shown, 238 00:13:14,520 --> 00:13:18,959 Speaker 1: and potentially save you years off your homeland. Imagine being 239 00:13:19,040 --> 00:13:22,320 Speaker 1: having your homeland paid off and save ten, fifteen, twenty years. 240 00:13:22,400 --> 00:13:26,840 Speaker 1: That would be unbelievable and something I highly doubt you'd 241 00:13:26,840 --> 00:13:29,760 Speaker 1: ever regret. Now you really so you can really see 242 00:13:29,800 --> 00:13:32,880 Speaker 1: now these numbers really do matter. And if I look 243 00:13:32,880 --> 00:13:35,240 Speaker 1: at the average Australian mortgage, which is round about six 244 00:13:35,360 --> 00:13:38,400 Speaker 1: hundred and forty two thousand dollars at an interest rate 245 00:13:38,440 --> 00:13:42,040 Speaker 1: of six point twenty five percent, those repayments are just 246 00:13:42,040 --> 00:13:46,240 Speaker 1: just under four thousand dollars per month. Now, assuming you 247 00:13:46,240 --> 00:13:49,079 Speaker 1: know that rate of twenty five percent basis points get 248 00:13:49,120 --> 00:13:51,520 Speaker 1: supplied to the loan, and that person was to keep 249 00:13:51,520 --> 00:13:54,040 Speaker 1: the mortgage of payments the same, they would actually save 250 00:13:54,120 --> 00:13:56,800 Speaker 1: comfortably fifty three thousand dollars interest over the home loan 251 00:13:57,440 --> 00:13:59,120 Speaker 1: of the life of the loan, and actually have that 252 00:13:59,160 --> 00:14:03,200 Speaker 1: mortgage paid off twenty months sooner. Again, this is just 253 00:14:03,240 --> 00:14:06,440 Speaker 1: the impact of a simple one hundred dollars per month. 254 00:14:06,880 --> 00:14:08,920 Speaker 1: Now again that can one hundred dollars is a lot, 255 00:14:09,160 --> 00:14:10,600 Speaker 1: and I don't mean to turn my nose up at 256 00:14:10,600 --> 00:14:12,959 Speaker 1: that at all. But if you think about that again, 257 00:14:13,120 --> 00:14:16,600 Speaker 1: per day or per week, it's a couple of coffees 258 00:14:16,840 --> 00:14:19,560 Speaker 1: during the week, or it's saying no to uber ey 259 00:14:19,560 --> 00:14:22,200 Speaker 1: it's say two times per month, or no to buying, 260 00:14:22,280 --> 00:14:24,800 Speaker 1: say a new pair of jeens, you know for the season. 261 00:14:25,400 --> 00:14:27,760 Speaker 1: You know, these are the choices that you have within you. 262 00:14:28,200 --> 00:14:30,920 Speaker 1: So if you can have that awareness and then intentionally 263 00:14:30,920 --> 00:14:33,240 Speaker 1: apply them, you know you're going to be making some 264 00:14:33,320 --> 00:14:36,880 Speaker 1: really wise decisions and it becomes a really powerful wealth 265 00:14:36,920 --> 00:14:41,120 Speaker 1: building tool to have in your toolkit. Now, another great 266 00:14:41,160 --> 00:14:44,520 Speaker 1: tool that I recommend or I guess tactic is to 267 00:14:44,600 --> 00:14:48,200 Speaker 1: understand your why. Tapping into your why is going to 268 00:14:48,240 --> 00:14:53,440 Speaker 1: be a powerful, endless source of motivation. If you are 269 00:14:53,560 --> 00:14:55,600 Speaker 1: like me and you're dreaming of a life with a 270 00:14:55,640 --> 00:14:59,440 Speaker 1: lot less financial stress, a lot more breathing room, greater 271 00:14:59,560 --> 00:15:03,480 Speaker 1: freedom or holidays, you know, maybe switching to part time 272 00:15:03,560 --> 00:15:07,680 Speaker 1: work or an earlier retirement. Then one of the smartest 273 00:15:08,040 --> 00:15:11,000 Speaker 1: financial moves that you can make for yourself is to 274 00:15:11,040 --> 00:15:13,880 Speaker 1: have a go at beating the bank and paying off 275 00:15:13,880 --> 00:15:17,280 Speaker 1: your mortgage faster than the thirty year prescription that they 276 00:15:17,360 --> 00:15:20,360 Speaker 1: have given you. Yes, the banks put us on a 277 00:15:20,400 --> 00:15:22,840 Speaker 1: thirty year term. It's how we get our loans, you know, 278 00:15:22,880 --> 00:15:25,120 Speaker 1: approved in the first place. Is what we often need 279 00:15:25,200 --> 00:15:28,360 Speaker 1: to have that serviceability box ticked in our loan application. 280 00:15:28,560 --> 00:15:30,160 Speaker 1: But just because they put you on a thirty year 281 00:15:30,240 --> 00:15:33,120 Speaker 1: term does not mean that you need to follow it. 282 00:15:33,520 --> 00:15:36,920 Speaker 1: You really are perfectly capable of paying that off so 283 00:15:37,120 --> 00:15:41,400 Speaker 1: much sooner. But again, it's about having that attention, being 284 00:15:41,440 --> 00:15:45,160 Speaker 1: aware of it, and applying it with intention. So every 285 00:15:45,280 --> 00:15:50,280 Speaker 1: dollar above your minimum mortgage repayment significantly reduces your interest, 286 00:15:50,560 --> 00:15:54,400 Speaker 1: your risk, and your anxiety, and it buys you way 287 00:15:54,440 --> 00:15:58,680 Speaker 1: more control, so much more peace of mind and obviously 288 00:15:59,000 --> 00:16:02,840 Speaker 1: a greater sense of future flexibility. And for the record, 289 00:16:03,280 --> 00:16:05,080 Speaker 1: you want to try and do this as soon as later, 290 00:16:05,240 --> 00:16:09,520 Speaker 1: Please don't get into the headspace where you start procrastinating 291 00:16:09,520 --> 00:16:11,440 Speaker 1: and making excuses and think, you know, let me just 292 00:16:11,560 --> 00:16:14,320 Speaker 1: enjoy three months of having a smaller mortgage repayment, and 293 00:16:14,360 --> 00:16:16,400 Speaker 1: then I'll coe back and apply it because I can 294 00:16:16,440 --> 00:16:19,720 Speaker 1: pretty much guarantee it that there'll be another excuse in 295 00:16:19,800 --> 00:16:22,720 Speaker 1: three months time, and maybe there'll be more cuts applied 296 00:16:22,720 --> 00:16:25,160 Speaker 1: in the meantime, and you know that lifestyle creep is 297 00:16:25,240 --> 00:16:26,920 Speaker 1: kicked in, and then you're scratching your head, going, hang on, 298 00:16:27,000 --> 00:16:28,840 Speaker 1: why am I struggling so much? We've had four interest 299 00:16:28,920 --> 00:16:31,640 Speaker 1: rate cuts and I'm still struggling to make ends made 300 00:16:31,640 --> 00:16:34,840 Speaker 1: and I'm still living paycheck to paycheck. Don't become a 301 00:16:34,920 --> 00:16:38,400 Speaker 1: victim to the lifestyle creep. Get in there quick, automate 302 00:16:38,480 --> 00:16:41,040 Speaker 1: everything as much as possible, and aim for as much 303 00:16:41,040 --> 00:16:44,000 Speaker 1: as you can safely afford within the boundaries of your 304 00:16:44,040 --> 00:16:47,320 Speaker 1: budget to see what extra repayments you can apply, and 305 00:16:47,400 --> 00:16:49,960 Speaker 1: of course, even better, make sure you contact the bank 306 00:16:50,240 --> 00:16:53,840 Speaker 1: and let them know that any further interest rate rises, sorry, no, 307 00:16:53,880 --> 00:16:58,560 Speaker 1: any further interest rate cuts are applied where they automatically 308 00:16:58,760 --> 00:17:02,920 Speaker 1: maintain your mortgage payments regardless of how much interest rates 309 00:17:02,960 --> 00:17:05,360 Speaker 1: come down, and you will start to feel so much 310 00:17:05,400 --> 00:17:07,560 Speaker 1: better as every time you log into into banking you'll 311 00:17:07,560 --> 00:17:09,760 Speaker 1: see that your mortgage is finally going in the direction 312 00:17:09,800 --> 00:17:13,400 Speaker 1: that you would like down so much sooner and again, 313 00:17:13,440 --> 00:17:16,320 Speaker 1: it becomes your source of motivation, especially when you've tapped 314 00:17:16,359 --> 00:17:19,639 Speaker 1: into your why and what that means. So what I 315 00:17:19,680 --> 00:17:22,480 Speaker 1: recommend you do as a quick fun exercise is to 316 00:17:22,520 --> 00:17:25,119 Speaker 1: write down three to five points as to why you 317 00:17:25,119 --> 00:17:28,080 Speaker 1: would like a mortgage free life, as I mentioned before, 318 00:17:28,160 --> 00:17:31,480 Speaker 1: things like more holidays, being able to cut down to 319 00:17:31,680 --> 00:17:34,800 Speaker 1: part time work, be able to maybe start to invest in, 320 00:17:34,880 --> 00:17:37,000 Speaker 1: or looking at like a debt recycling strategy you can 321 00:17:37,040 --> 00:17:39,560 Speaker 1: now afford to because you have that cash flow, or 322 00:17:39,560 --> 00:17:42,199 Speaker 1: perhaps it means you can start putting more money into superannuation, 323 00:17:42,400 --> 00:17:44,440 Speaker 1: or perhaps it means you can start helping more people 324 00:17:44,440 --> 00:17:47,159 Speaker 1: around you, whether it be helping your kids out financially, 325 00:17:47,200 --> 00:17:49,320 Speaker 1: helping them, you know, save up their own deposits they 326 00:17:49,359 --> 00:17:51,520 Speaker 1: can have their own place, or even just having that 327 00:17:51,680 --> 00:17:54,320 Speaker 1: freedom and cash flow to spend and invest in you, 328 00:17:54,720 --> 00:17:58,760 Speaker 1: whether it be doing further education, improving your health and wellbeing, 329 00:17:59,240 --> 00:18:02,080 Speaker 1: or even just get to charity. And when you've written 330 00:18:02,080 --> 00:18:04,600 Speaker 1: down your three to five benefits of having a mortgage 331 00:18:04,600 --> 00:18:07,080 Speaker 1: free life, make sure you put it somewherehere you can 332 00:18:07,119 --> 00:18:09,600 Speaker 1: see it every day, whether it be by your toothbrush 333 00:18:09,720 --> 00:18:11,480 Speaker 1: for every time you brush your teeth twice a day, 334 00:18:11,880 --> 00:18:14,040 Speaker 1: or one of my personal favorites is in the shower 335 00:18:14,240 --> 00:18:17,600 Speaker 1: or perhaps in the car right near the ignition button. Now, 336 00:18:17,640 --> 00:18:19,920 Speaker 1: as we work towards wrapping up today's episode, I also 337 00:18:19,960 --> 00:18:22,760 Speaker 1: want to remind you to be cautious and also to 338 00:18:22,760 --> 00:18:25,640 Speaker 1: be wise. I want us to all be very realistic 339 00:18:25,680 --> 00:18:29,080 Speaker 1: about this current interest rate cut and of course future 340 00:18:29,119 --> 00:18:33,000 Speaker 1: interest rate cuts, but we need to reride ourselves. Nothing 341 00:18:33,280 --> 00:18:37,320 Speaker 1: is guaranteed. If inflation picks up again, rates could very 342 00:18:37,359 --> 00:18:41,000 Speaker 1: easily change directions again and go back up again. So 343 00:18:41,160 --> 00:18:44,159 Speaker 1: if we haven't used this window wisely, that is this 344 00:18:44,240 --> 00:18:47,520 Speaker 1: opportunities wisely to get on top of us, mortgage your 345 00:18:47,520 --> 00:18:50,480 Speaker 1: payments and reduce our debt, we may be actually feeling 346 00:18:50,680 --> 00:18:53,359 Speaker 1: the pinch all over again. We could be looking at 347 00:18:53,400 --> 00:18:56,160 Speaker 1: more interest rate rises just around the corner, and we'll 348 00:18:56,200 --> 00:19:00,760 Speaker 1: be regretting that we didn't use this window wisely previously. So, 349 00:19:01,040 --> 00:19:03,520 Speaker 1: as I said, let's use this moment to get ahead 350 00:19:03,600 --> 00:19:06,720 Speaker 1: whilst we can. Let's use this an opportunity to reduce 351 00:19:06,760 --> 00:19:08,840 Speaker 1: our debt as much as we can right now, and 352 00:19:08,880 --> 00:19:11,199 Speaker 1: to make sure we obviously are far more protected for 353 00:19:11,240 --> 00:19:15,440 Speaker 1: any future economic shocks and interest rate rises. Now, whilst 354 00:19:15,440 --> 00:19:18,520 Speaker 1: we can't control what the RBA does or where inflation, 355 00:19:18,640 --> 00:19:22,240 Speaker 1: of course is headed, we can control our response, both 356 00:19:22,280 --> 00:19:26,080 Speaker 1: emotionally and financially. And of course we can be really 357 00:19:26,119 --> 00:19:30,320 Speaker 1: grateful for this opportunity and step up as quickly as possible. 358 00:19:30,640 --> 00:19:32,720 Speaker 1: We can say no to that lifestyle creep that so 359 00:19:32,760 --> 00:19:34,359 Speaker 1: many of us very easily get caught up in, and 360 00:19:34,359 --> 00:19:37,600 Speaker 1: we can stay consistent, focused and actually choose to act 361 00:19:37,640 --> 00:19:41,399 Speaker 1: with intention with our mortgagure payments. So if you've ever asked, 362 00:19:41,400 --> 00:19:43,240 Speaker 1: oh my goodness, how am I ever going to get ahead? 363 00:19:43,440 --> 00:19:45,040 Speaker 1: Oh my goodness, how am I ever going to reduce 364 00:19:45,040 --> 00:19:46,639 Speaker 1: this financial stress in my life? It feels like it 365 00:19:46,680 --> 00:19:49,399 Speaker 1: never goes away, Or how can I actually start creating 366 00:19:49,400 --> 00:19:52,720 Speaker 1: financial freedom in my life? Can I remind you this 367 00:19:53,080 --> 00:19:57,119 Speaker 1: is one of those rare windows. Doing something really small 368 00:19:57,359 --> 00:20:01,120 Speaker 1: like keeping your mortgagure payments steady could have a profound 369 00:20:01,160 --> 00:20:04,159 Speaker 1: impact with the reverse compounding interest on your homeland. And 370 00:20:04,400 --> 00:20:06,560 Speaker 1: this is something that could be life changing for you 371 00:20:06,760 --> 00:20:08,800 Speaker 1: and of course something that your future self will thank 372 00:20:08,840 --> 00:20:11,920 Speaker 1: you for. All Right, well that is it for today's episode. Again, 373 00:20:12,000 --> 00:20:14,000 Speaker 1: thank you so much for tuning in this morning. It 374 00:20:14,080 --> 00:20:15,960 Speaker 1: is always an honor to connect with you, and I'm 375 00:20:15,960 --> 00:20:19,200 Speaker 1: so grateful that you are here. If you enjoyed this episode, 376 00:20:19,240 --> 00:20:21,080 Speaker 1: it resonated with you. Can you please share it with 377 00:20:21,119 --> 00:20:24,400 Speaker 1: someone that you care about, someone that has a mortgage 378 00:20:24,520 --> 00:20:27,480 Speaker 1: And for anyone that wants to actually have a mortgage 379 00:20:27,520 --> 00:20:30,320 Speaker 1: broker or is looking at negotiating a better deal with 380 00:20:30,359 --> 00:20:33,840 Speaker 1: their existing lender, please feel free to reach out to 381 00:20:33,880 --> 00:20:35,399 Speaker 1: me and I can give you the details of my 382 00:20:35,560 --> 00:20:38,280 Speaker 1: own mortgage broker. As you know, this is Adam McCabe 383 00:20:38,280 --> 00:20:41,119 Speaker 1: from Blue Lantern. He's a brilliant mortgage broker. I have 384 00:20:41,240 --> 00:20:44,680 Speaker 1: absolutely no incentive to actually pass on his contact details 385 00:20:44,920 --> 00:20:47,680 Speaker 1: other than knowing that he will do a great job 386 00:20:47,840 --> 00:20:50,040 Speaker 1: for you now. In the meantime, please don't forget to 387 00:20:50,160 --> 00:20:52,440 Speaker 1: follow this show so that you never miss an episode. 388 00:20:52,480 --> 00:20:56,320 Speaker 1: And in the meantime, please keep that financial fire burning bright. 389 00:20:56,600 --> 00:20:59,760 Speaker 1: I'll see you next Monday Morning Chow. For now,