Answer by Hudson Adviser Phillip McGann
Question: In regards to the banks article (in Hudson Report 29/05/2015). I wondered why they don’t offer better rates for AUS depositors, especially for term deposits , if it costs more for the bank to get funds from overseas? Would it not be cheaper and less admin costs to get the funds from Australians?
1) Funding offshore may well be cheaper than locally depending on offshore interest rates and competition in the local deposit market.
2) Larger tranches of funds can be sourced quickly and easily offshore than in lots of smaller amounts from local depositors.
3) The amount of deposit funds available locally is limited whilst the demand for borrowings in our economy is invariably larger resulting in more offshore borrowing.
Overall the banks source funds from many different avenues to keep a varied and diverse funding base to keep their operations viable. Read in full + comments 0 Comments
Written by Hudson Editor Hayley Mcleod
I was fortunate enough last week to attend a motivational speech by quadruple amputee Matthew Ames. Matthew was 39 years old when what started as a sore throat resulted in the loss of all four of his limbs. He had contracted streptococcal resulting in toxic shock and was never expected to survive. He is the father of four young children aged between two and nine and husband of a very dedicated wife determined to grow old with him. Matthew is currently undergoing a series of surgeries associated with a procedure called osseointegration. He will be the first quadruple amputee to have this done on all four limbs.
The biggest thing I took away from the evening was about accepting and embracing change but that also allowing yourself to have a moment where you don’t accept the change you let it “wash through you” as Matthew said. Why do I think this important to our members because life is all about accepting change and sometimes the advice your adviser will give you will not be what you want to hear or what you were expecting but it is what you do with that advice that could change your life. I am not going to talk about accepting change from a purely monetary perspective however as change isn’t about money it is about a change in oneself – knowing who we are and not necessarily changing who we are but how we adapt to certain situations and what we do with the information and challenges that are presented to us. Matthew was always a strong person and speaking to him after the event I learnt that having all of his limbs removed hasn’t really changed him as a person he was always the person he is today he has just harnessed certain elements and embraced a new lifestyle.
This harnessing of who we are and embracing a new lifestyle can be taken in many forms. If you are made redundant from a job you can choose to see it as a positive or a negative. Yes you will have a loss of income but is there something out there that you have always been passionate about and wanted to try? Is this the time to harness your inner ambition and embrace a new lifestyle? During the GFC many people lost their jobs, their incomes and their homes and I will be honest my husband and I were put in this position. I did not embrace this change very well or my new lifestyle instead I wallowed in self-pity for a long time. Asking myself “why us?” We had always worked hard and it didn’t seem fair. We had just had a baby and both of us were made redundant just before she was born. It was at this time I realised that we should not be wallowing but embracing our new lives as parents – we had been given a rare opportunity…. To both be home with our newborn baby. Today, almost six years later I reflect on this and believe that in some small way I did embrace the change, at the time, I just didn’t realise it. My husband started his own business which he has now successfully grown big enough that he has been able to hire someone to take care of it for him while he studies and pursues something he has always dreamed about. This is not something he would have been able to do if he was working full time for someone else.
I say that I wallowed in self-pity and many people faltered me for this arguing that I needed to pick myself up and harden up and while this is true as Matthew said you also need to have your time to process what is occurring, allow yourself to process the change and take it on board. I believe I needed this time and it has made me a stronger person.
So where am I going with this? Don’t be afraid to make a change in your life. Deep down you know who you are and you know your strengths and weaknesses; believe in yourself and trust yourself to make the right decision but make sure you have good people around you to support you and help you make that decision. Matthew also believes in having a strong support network; something that is vital in every aspect of one’s life whether it be in the home, at work or helping with your financial situations.
While having your life turned upside down is often the catalyst for making life changing decisions don’t be afraid to know who you are, trust who you are and take a chance.
To learn more about Matthew's story visit: http://renovatingmatthew.com/matthews-story/Read in full + comments 0 Comments
Written by Hudson Editor Hayley Mcleod
There is a great deal of concern surrounding Australia’s mining sector and the lack of “new” mining projects emerging; leaving people to ask….. Is the resources boom over?
Many economists believe that this is not the case and in 2014 mining contributed 0.86% points to Australia’s GDP followed by banking (finance) and insurance coming in at 0.48% points.
According to Mark Cully, Chief Economist of the Federal Department of Industry and Science, the resources boom actually consisted of three booms. The price boom lasted for about eight years and peaked in 2011. The overlapping investment boom lasted for about six years (with $400 billion worth of resources projects; with overall business investment spending peaking in the last quarter of 2012 at an astonishing 19% of gross domestic product), and now we're in the early stages of the production boom.
He believes that while resource prices are still falling from their 2011 peak and that mining investment spending is rapidly coming to an end the production boom is set to last far longer than the others did.
While previously global demand for resources such as iron ore, coking and steaming coal, liquefied natural gas and petroleum were outstripping supply this is not the case anymore, which has led to the decline in mining and export in Australia, but as with any resource once the commodity cycle changes and when China’s economy picks up the growth in the resources sector will again pick up and thus reflect in the Australian economy.
The 2015 Intergenerational Report shows that the way consumers and businesses interact is changing and is being driven by globalisation, the growth and proliferation of online services and disruptive technologies. As the Australian economy continues to move beyond the investment peak of the resources boom, it will be important that individuals and businesses in all sectors of the economy continue to innovate and adopt new technologies to work smarter and deliver higher quality, greater value or more output from a given set of inputs.
What does this mean?….. It means that while our mining sector won’t be contributing as much to the share market or the economy other businesses will be given the opportunity to expand, develop and export to global markets meaning that the Australian economy as a whole will not suffer from one sector suffering losses with other areas picking up the slack.
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