15 December 2019
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If you really care about not being poor - read this and act!

Don’t just stand there, do something! This is my best advice to anyone reading this who admits to having cash concerns, either now or into the future.

Call me a blinkered money man but I’m perplexed as to why we are continually being told that Australians have money worries, they have mortgage stress and are concerned that their super won’t give them a comfortable life in retirement but not enough people are doing much to change the problems creating these dollar dramas.

Yep, too many of us have an execution problem and I’ve seen it over and over again when it comes to most self-improvement efforts. Somehow that damn little voice, who talks us out of doing difficult things that could make us healthier, richer, smarter or thinner, gets inside our head and we give into our bad habits that forced us to sign up for self-improvement, albeit for too short a time.

I recently talked to a lady who had read a money book that had sold really well, but when I asked her what she did as a consequence of the book she admitted that she did not adopt any new money-making or money-saving strategies. She said that was because she was already getting it right, say by being in a good super fund, or because she did not see the significant benefit of making changes.

This could have been code for she could not beat the lethargic attitude she, and most of us, have towards turning bad or slack habits into good or top notch ways of life.

I recently set my network a challenge by writing a great story on the best super funds, the cheapest home loans, the cheapest credit cards and the cheapest personal loans. I thought this would be the most read story I would have written all year but the data said it only rated as high as some of my other most read stories.

In case you missed it, let me give you the big discoveries of that story, which included a credit card with an 8.9% interest rate!

This is a no BS look at the best financial products out there. You can use this guide to make a switch or to compare your super fund, your home loan, your credit card, your personal loan, etc.

Best Super Funds

This comes from SuperRatings and here are the top 5 funds over 5 years:

Now here’s the performance over 3 years:

And below is a one year showing for super funds and what you can see is that the funds that have consistently done well have been HOSTPLUS – Balanced, Australian Super – Balanced, and CareSuper – Balanced. Also note that Cbus – Growth has been up there over three and five years, which I think is a better guide than simply a one-year good performance. Intrust Core Super also deserves an honourable mention.

Home Loans

Here I will spotlight the cheapest loans and you can decide if you want to pay more for any bells or whistles that you can add to the ‘price’ or interest rate of a loan.

If you want to apply online, U-Bank has a 3.69% variable home loan and the comparison rate — the rate you should look at to compare rates — is 3.69%. Bank Australia has a 3.65% home loan but the comparison rate is 3.66% and this deal ends on June 30, so it could get a little dearer.

For a walk-in loan Aussie has a 3.69% home loan with a comparison rate of 3.7%. For a loan you can arrange over the phone my Switzer Home Loan is 3.89% for both advertised and comparison rates, which would put us 9th on the Rate City’s comparison table for cheapest home loans.

Clearly, if you are paying more than 3.89%, you are not interested in not wasting your money!

Important Info: The comparison rate is the advertised rate plus any fees or charges that push up your monthly repayments and therefore increases the real interest rate you are paying!

More Important Info: Financial experts will always say the past results are no guarantee of future results but in the absence of a crystal ball that tells us what lies ahead I like fund managers who have a consistent knack of doing well.

By the way, all of the super funds mentioned above are not outrageous chargers and so they are not rip-off merchants.

If you put good returns and reasonable charges together you have a great formula for building super wealth in your super fund!

Cheapest Credit Cards

The cheapest credit card I’ve found is the McGrath Pink Visa Card with an interest rate of 8.99% on purchases, balance transfers and cash advances. And half of the annual fee of $40 goes to McGrath Foundation. Also, by paying your account’s outstanding balance in full every month you can make use of up to 55 interest-free days on purchases. The card is issued by Community First Credit Union if you are interested and you can apply online.

Check your interest rate on your credit card as they can be as high as 20% plus but these might come with benefits such as frequent flyer points. You need to do your homework on whether the high interest rates are worth paying.

Of the well-known cards, the Virgin Money Low Rate Credit Card and Bendigo Bank Low Rate Mastercard come in at a rate of 11.99%, which looks about the best rate from this kind of financial institution.

Personal Loans

A mob I’ve never heard of called Harmoney have a 6.99% fixed rate loan which has a comparison rate of 7.69%, and these rates are pretty good for personal loans.

Be careful of advertised rates because one new lender has an 8.42% fixed rate but when you add in fees the comparison rate goes to, wait for it, 10.79%!

There are lots of personal loans around 10% and many higher. If you have a good credit history you should be a good chance to get the money from the cheaper lenders in the market.

Interestingly, Latitude loans are, according to Finder.com.au, 13.99% fixed but the comparison rate is a whopping 15.19%! I guess Alec Baldwin doesn’t come cheap!

Lesson?

If you don’t go out and pursue the lowest cost financial product possible then you can only blame yourself if you find you have a life where money is too tight to mention and you’re living simply in the red!

Now who wouldn’t find this info valuable? It was so surprising, especially when I saw how low the credit card rate was, it shocked even me.

The rate switch for someone on a 4.7% home loan with a $500,000 mortgage could be a $5000 saving a year. The credit card saving could be $500, a year while the personal loan saving on a $10,000 loan could be $800! And the super gain over a lifetime in a dud, overcharging super fund could mean kissing literally hundreds of thousands of retirement dollars goodbye!

After decades helping people build wealth and great businesses it’s so obvious that most of us are programmed to under-achieve or, to be blunt, fail!

For years I kidded myself I could lose 10 kgs. But when I got a TV gig and told my son I’d get running - after he told me I looked like “crap”! -  he hit me with what I tell my business and finance audiences.

And this is what I say: “Just about everything you want is just outside your comfort zone. And if you can’t make yourself rich, or create a great business or lose weight or get fit then invest in success and get someone to help you achieve YOUR goals.”

It’s great advice and so I found the toughest dietician in town who was so mean that I committed myself to following her weight loss strategy to the letter of her unreasonable law but it worked!

At the core of a successful change of you has to be a real commitment to wanting that goal to happen. Then you have to take action.

Deep down you have to want it so badly that you can virtually will it to happen.

And at a time like this I just can’t resist pulling out that great motivation line that “If it’s to be, it’s up to me.’

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