Well, as the year draws to a close Power Financial Solutions would like to wish everyone out there a very Merry Christmas and a safe and Happy New Year.

As we move into 2016 borrowers will need to decide if they want to fix their loans or keep them at a variable rate.  With the US central bank raising interest rates for the first time in 10 years there is normally on a knock on effect in Australia at some stage during the following 12 months.  The key message here is to watch the markets and if you start to feel uncomfortable about a rate rise then book an appointment with me to explore your options.

Each week throughout 2016 we will continue to interview and promote other professionals through our weekly blog series.  This commenced in late 2015 and so far we have interviewed three wonderful people and their businesses.

And lastly, remember to enter our fantastic holiday to Dubai which will be drawn in April 2016.  If you see this competition through Facebook I would really appreciate it if you share it among your own networks so everybody has a chance to win.

Have a safe holiday period and see you in the New Year.

Matt Power

Every Sunday I get my paper delivered.  I always read the sport first. Then I turn my attention to the Bare Foot Investor.

Now, I am not here to discuss the Bare Foot investor specifically. What I want to discuss is the dumb decisions made by many of his readers.

It never ceases to amaze me the trouble people get into.  The following are 3 ways this often occurs:

• Make ill informed decisions without proper and thorough research.
• Receive bad professional advice
• Be taken advantage of through deception

And we work way too hard to throw money to the wolves so to speak.

In my opinion it is best to take a minute to evaluate your current financial position.  Am I on the right path? Will my goals be attainable? What do I need to change if I can’t reach those goals?

Without having a plan the chances of reaching your goals diminish.  We need to ensure that as many people as possible seek the right advice from the right people so columnists like the Barefoot Investor don’t have any letters to respond to.

At Power Financial Solutions we act in the best interests of YOU alleviating any problems from the start.

Well, this morning the third of the majors, NAB, raised it’s interest rate by 17 basis points on its owner occupier loans.  It now joins CBA and Westpac as the other lenders to increase rates in this space.  It is just a matter of time before ANZ and some second tier lenders do likewise.

Why are they raising rates when the official cash rate has not moved?  The lenders will tell you that APRA is pushing them hard to increase their capital reserves as a safety measure.

Whilst this may be true to a certain extent and overall it is protective of our banking system I believe there are other reasons for the increase.  That’s a story for another day.

What does it mean for the borrower?

Well, if you do nothing it means you are going to be paying extra $$ each month.  If you are proactive then it is likely you will save $$.  Obviously really.

Competition will be generated and more exciting deals will be put on the table.  You see not every lender is governed by APRA and therefore not all are affected by the increase in capital reserves.  Even the ones who are affected will be vying for more market share and some exciting offers will come forward.

It is critical in this day and age that as a borrower you seek professional advice from a broker who has access to many lenders to get you the BEST outcome based on your financial circumstances.

Happy Days!!