How to invest and prosper in uncertain times

How to invest and prosper in uncertain times

How to invest and prosper in uncertain times (2)Most of us have gone from living our lives, going about our business, taking care of our homes, to a level of uncertainty that caught us all off guard. Who would have thought in a million years that the world would shut down at lightning speed?

No one really saw this coming in the way it has occurred. Yes, we know that there will be pandemics, yes there will be wars, yes there will be global issues that impact us but this COVID-19 pandemic has literally shut down the globe.

And some say, will change the way we live forever.

However, once this is over, we will go on living our lives, going about our business and taking care of our homes, just like we did after September 11, just like we did after SARS etc.

But before we ‘get back to normal’, we need to navigate our way through these uncertain times and more importantly, prepare ourselves for the greatest opportunity coming.

I have said in my previous blogs that a recession or downturn lasts 18 months to 2 years however it is my opinion, we will experience an economic V curve, fast to dive, fast to climb and as a result of the V curve… all bets are off! But only time will tell.

The Uncertainty

Unless you have been sleeping under a rock, you’d be well aware of the constant and relentless avalanche of negative media happening right now.

Headlines sprouting things like the number of job losses, numbers of COVID-19 deaths increasing, border closures, school closures, trillion-dollar government stimulus packages etc, etc.

In addition to that, the share market has fallen to levels lower than experienced during the Global Financial Crisis (GFC), currencies have nosedived, including the Australian dollar and even crypto currencies like Bitcoin have dropped in value. Even house prices are declining.

You’d be right to think the economic world is coming to an end.


The Silver Lining

It’s not all bad news, in fact, there’s a silver lining and as an Educator and Property Investor myself, I want to share with you how you can prepare and prosper in these uncertain times.

Firstly, you need to keep a cool head, focus on your numbers and line up your financial ducks so that you are ahead of the game.

You need to review your spending habits (budget), buffers and equity levels. How much do you have in your redraw / offset account?

You want to make sure you are set to go by having your deposit monies ready so you can buy your next property.

Are you pre-approved? Now would be the time to do that. Having your finances in place, ready to go will mean that you can move quickly when you find that perfect deal.

When this V bounce happens, it will move quickly so be prepared!

Why am I so optimistic?

Let’s look at the positives:

  • The government is doing its thing to lessen the impact this pandemic has on all Australians via a number of stimulus packages.
  • The banks have been told to provide mortgage relief, up to 6 months, for those experiencing financial stress. And they are lowering the long term fixed interest rates.
  • Jobs are being protected via government subsidies and businesses are receiving support packages to keep people employed.
  • It is quickly becoming a buyer’s market and there will be little to no competition when it comes to negotiating prices on property deals.
  • When the upswing of the V curve hits, investors who are in the market will enjoy capital growth.
  • Variable interest rates are at their lowest ever in history.

Some are saying that the Reserve Bank of Australia (RBA) will drop interest rates again when the board next meets however even if they do, it won’t make a difference.

The banks are operating independently of the RBA and are not passing on the interest rate cut to customers or are only passing on a small part of it.

Next Steps…

In my role as CEO eLINK Finance, I’m seeing the banks moving on the long-term fixed interest rates which spells good news for borrowers, especially the 2- and 3-year fixed rates, they get as low as 2.19 per cent for owner occupiers.

Now is the time to prepare!

Prepare yourself for the next upswing in property prices and make sure you get in when everyone else is crippled by fear.

Once the next upswing happens, the media frenzy will focus on “property prices booming” which in turn activates the FOMO Effect – Fear Of Missing Out.

This is when the pandemic will mostly be over, everyone is feeling better about themselves, the economy, the weather and don’t want to miss out on all the riches being had by those already on the property ladder.

The FOMO effect will cause property prices to rise rapidly… all while the savvy investors, who lined up their financial ducks earlier, sit back and enjoy the ride.

Will that be you? I hope so. 😊

P.S. If you need help with preparing your finances for the next property upswing, then click here to request a call.

P.P.S. In my upcoming blogs, I will continue to keep you up to date with my thoughts on where we are at with the property market and prices so you can be ahead of the game.

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