How to Save on Your Mortgage - Australian Investment Education

How to Save on Your Mortgage

Low interest rates have offered a great opportunity to investors to enter the market cheaply over the last few years, but that is about to change. In this week’s Money and Investing Show, tune in as host Andrew Baxter runs through some nifty ways to keep up on your repayments with higher interest rates:

Interest Rates and Mortgage Repayments
Interest rates have remained unchanged at very low levels for the last 10 years making it very cheap to borrow. As host Andrew Baxter points out however, those approaching the end of their fixed rate terms will be concerned in hearing that interest rates are soon to be increased in the US and swiftly followed by the Reserve Bank of Australia. Increased rates mean higher repayments, and higher repayments mean less money in your account to spend. In this podcast, join Andrew and Mitch as they explore some options to help soften the blow when the due dates for those upcoming repayments to keep up with.

Starting a Business
For homebuyers who are struggling to meet their mortgage repayments, an increase in income is a highly welcomed prospect. In many cases, the idea of a ‘dream job’ is centered around the concept of working for yourself. An added benefit for those that are successful can be the extra income you can make by virtue of owning your own business. Long-term business owner and host Andrew Baxter explains some of the difficulties associated with launching your own business such as the time it takes until you are generating cash flows after a major capital outlay and just how difficult it can be to figure out the key processes and ways of doing things that are necessary to making a business successful. All too often new and emerging businesses fail. Years of work can go into building a business to help you pay off your mortgage, then all of a sudden it fails and you have nothing to show for it.

Buying a Business
Operators who struggle to launch a business often revert to buying a business. Like starting a business, buying a business involves a major investment at the outset, but it does come with some benefits. Take franchises for example, you pay to take ownership over a business where you are provided with the day-to-day processes, equipment and activities which have been proven to generate cashflows for other franchisees. However, host Andrew Baxter points out that buying a business instead of building one prevents an owner from learning the intricacies of what leads into making that business successful. If you put something together, it is much easier to recognise the part that is missing than if you had somebody else assemble it for you.

Side Hustles
2021 was a truly strange year for professionals and businesses around the world. Millions of workers who were accustomed to working in an office every day were now confined to working from home, and with this came an increase in people undertaking what we call ‘side hustles’. Many working people are happy in their job, but the added pressure of paying a mortgage can prompt employees to seek just a little bit more regular income. Side hustles are ventures which generally require little capital and time outlay that someone may do ‘on the side’ to generate some extra income. Steady income that is not labour intensive is the goal for many workers, but host Andrew Baxter points out as a business owner himself, side hustles are all well and good until they interfere with the duties you have been entrusted with by your employer. It is all about discovering a process which is repeatable and reliable  in terms of results. Ironically, countless side hustles have evolved into what we now see as business empires.

Trading as a Side Hustle
The great variety of financial instruments traded in the market offers a well of opportunity. Andrew Baxter has been trading in markets for decades and has used trading as his form of a side hustle. By developing a process which only requires a small investment of time each day, he was able to generate a cashflow which has proven to be reliable and effective.