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The cut in interest rates last week was a good story for mortgage holders, but now what for savers? With the cash rate at 3.75%, what do Australia’s retirees and near-retiring workers do? The 0.5% rate cut is money saved for mortgage holders, but it’s less income for those relying on cash deposits, term deposits and fixed-income products. And in this country savers outnumber mortgage holders by almost three to one.
Savers have some thinking to do, especially if we have a minor recession and the Reserve Bank cuts the cash rate again to kick start economic activity.
The banks are in the process of adjusting down their mortgage rates, which will take effect over the next few weeks, pushing down their cash and term deposit rates, which will happen immediately.
For those in retirement or close to it, shares and property carry liquidity and market risk that they’d rather not take on.
For this large cohort of people, the choices come down to putting your money in a transaction account, a designated high-interest savings account or a term deposit.
Let’s start with the last one. As the banks cut their deposit rates, you’ll notice more movement in some types of term deposit than others.
The average 12-month TD rate at banks will drop to around 5.25% and the 30- and 60-day TD rates will on average drop to around 5% or less.
Right now the sweet spot is going to be the 90- and 180-day term deposits, which will settle at at around 5.3 to 5.5% in the next two weeks.
Banks have a need of intermediate funding right now, so they will bid for your money by making offers on 90- and 180-day term deposits as attractive as they can.
However, it’s always worth looking around for alternative deposit opportunities, such as something like Yellow Brick Road’s Smarter Money trust, which is returning about 6% after fees. Your goal should be to have a spread of investments to diversify your risk.
If you’re not comfortable with shutting your money away for a set term, you’ll either be looking at keeping your money in a transaction account, where you normally get zero per cent, or an online savings account where the 12-month average return is around 4.5%, perhaps over 5%.
I make two points about these options. Firstly, earning zero per cent in a transaction account is not smart because with inflation running at around 2.5%, you’re going backwards.
Secondly, when investigating “bonus interest” offers at an online savings account, the institution may offer you between 5.5% and 6%, but the rate will apply for three or four months, at which point it drops to around 4.5%.
There are going to be some good deals out there in the next month. Your job is to be informed not only about the market, but also about your own needs.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance. He runs a <a target="_blank" href="https://twitter.com/#!/markbouris">Q&amp;A session on Twitter</a> every Monday afternoon at 4pm for small business owners using the hashtag #bizQandA.
 
 
 
 
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Rate cut good for borrowers, but savers have some thinking to do

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Tomorrow I predict the Reserve Bank of Australia is going to cut official interest rates by either 0.25 percentage points or 0.5 percentage points.
Look at the official figures. The Reserve Bank follows a whole lot of economic data, but the number it focuses on is inflation, taken from the Consumer Price Index.
The March quarter CPI came out last Tuesday, and it printed an inflation number well below what most economists were thinking.
The Reserve Bank is bound to use monetary policy to keep inflation in the target range of 2% to 3%. And the March CPI means core inflation becomes around 2.2%.
When this is the trend, the economy might need a kick-start, by reducing the price of money – the cash rate – and hoping that Australians will spend more.
There are other indicators that the RBA could be looking at. I call these my indicators of the “real economy”.
I talk to business owners and I look at the “for lease” signs, the “closing down sale” signs and the “50% off” specials in shop windows.
I look for empty shops, car yards with no people in them and bank boards on the pavement that spruik their deposit rates, not their variable mortgage rates.
I look at the newspapers: who’s being laid off? Car workers and bank staff.
These indicators tell a story of struggling businesses and cautious consumers. This sort of dynamic can become a nasty spiral if it’s not broken at the right time, because consumers become more cautious with their money and businesses wear the consequences, having to lay off staff, which feeds greater consumer uncertainty and feeds a worse climate for businesses.
With my view of the real economy and the CPI and inflation figures, I think it’s time to break the spiral. When you have large concerns such as Toyota and Harvey Norman talking about a downturn in consumer demand, you have to multiply that stress several times to glimpse what the average small business owner is going through.
It’s a dangerous position, because our 3.5 million business owners are our biggest employers. We can cut the cash rate, making borrowing easier for business owners and easier for householders.
But while you can’t affect what the Reserve Bank does, or what the major banks do, you can use a rate cut to your advantage. If you’re not financially stressed, you can continue to make your normal repayment even after the bank cuts your variable rate.
A 0.25-percentage-point cut on a 30-year $300,000 loan at 7.4% will save you just over $50 a month, worth $18,000 over the life of the loan. A 0.5-percentage-point will save you $101 per month, worth $36,000 over the life of a loan.
You can’t change the RBA or your bank, but you can put the interest rate savings straight back into the mortgage, or put them into a high interest bearing fixed interest account. You can’t change the world but you can make good decisions when the cash rate drops.
Mark Bouris is executive chairman of <a target="_blank" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance. He runs a <a href="https://twitter.com/#!/markbouris" target="_blank">Q&amp;A session on Twitter</a> every Monday afternoon at 4pm for small business owners using the hashtag #bizQandA.
 
 
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It is time for an RBA interest rate cut

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Australians look at the Reserve Bank’s cash rate announcement on the first Tuesday of each month and make decisions based on it. And the RBA has been charged (mainly) with keeping inflation in the “target” range of 2% to 3%.
However, key parts of this structure have been breaking down into a new order.
Part of this breakdown is the extent to which inflation and growth affect the general economy. That is, if there’s wage inflation in Western Australian mining is there also wage inflation in Victorian manufacturing? Or, if the economy is growing at 3.5%, does that mean all Australians in all industries?
Investment in mining rose by 60% during the year while investment in the non-mining sectors was flat. And while the unemployment rate has remained at around 5.25% for more than six months, in the March quarter there were employment increases in mining, health and public administration while there were declines in manufacturing, retail and accommodation/food.
But the RBA can only react to the averaged numbers, so many householders feel official interest rates have been raised to head off inflation that they have not benefited from.
Perhaps the clearest sign of a structural change lies in how the major banks now react to the Reserve Bank. For 20 years the major banks set their variable rate loans according to where the RBA set the cash rate. But lately, variable rate loans have been moving independent of the Reserve Bank.
The current average margin on variable rate loans in this country is 2.4%, whereas 10 years ago it was around 1.4%. This creates a liquidity problem.
Because the residential mortgage market is so profitable for the banks, they are now concentrating their lending in that market, to the detriment of business lending, which is less secure and more costly to distribute and manage.
This is creating a bulge in our economy: banks are pumping funds into home loans while many business owners can’t get finance.
I don’t advocate regulating the markets, because regulators typically distort before they remedy. But there’s a case for using incentives to alter the structural problems.
A first step could be to foster competition by encouraging our regional banks and foreign banks to compete in mortgage lending.
There are tax incentives that could be used, and there are models where the Australian government could guarantee the small and non-banks, and not the big banks.
It doesn’t matter how we get there, but we do need more competition in lending. Competition will bring down the margins on variable rate mortgages and lure the big banks towards business lending again, where they can charge higher margins.
The market is actually poised to correct itself, but there has to be an incentive.
And what about the broader structural problems in the economy? Don’t blame the Reserve Bank: it only has interest rates to use against a dynamic set of forces that haven’t yet settled into their new shape.
Mark Bouris is executive chairman of <a target="_blank" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance. He runs a <a href="https://twitter.com/#!/markbouris" target="_blank">Q&amp;A session on Twitter</a> every Monday afternoon at 4pm for small business owners using the hashtag #bizQandA.
 
 
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The two-speed economy and independent bank interest rate rises are changing Australia’s economic structure: Mark Bouris

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During the week we saw the curious discrepancy between the views of the CEO of Australian Super and the outlook of a forklift driver.
The 62-year-old forklift driver from Melbourne had put $80,000 of his savings with Australian Super in its default, “balanced” option. He couldn’t work out why the TV ads showed his fund on the fast escalator when over the last three years the Australian Super “default” option returned savers just 1.7% per annum.
<img src="/images/stories/superescalator.jpg">
Aus Super’s “balanced” fund is not really balanced. It has half of its portfolio allocated to local and global shares, which carry very high risk. It puts another 29% of the portfolio into risky unlisted “private equity” and “direct property”. And it has just 2% invested in cash and 9% in bonds.
<img src="/images/stories/superescalator2.jpg">
In defending the fund’s performance, the Aus Super CEO argued, “the reason that most funds, including ours, have most of their assets in equities is that over the past 100 years equities have proven to be the best-performing asset class”.'
I have a few problems with this thinking.
For a start, the Australian Stock Exchange was only formed in 1987, and unbiased data on Australian stocks prior to the 1970s is hard to come by because businesses that go bust and de-list from the stock exchange often get removed from the index.
Secondly, to use performance of an asset over a century seems almost useless for people nearing retirement. They don’t have 100 years for the peaks and troughs to flatten out.
In recent weeks I have been writing about the worrying lack of good bond investment options for retirement savers. Government and corporate bonds are much less risky that equities, yet they perform just as well.
Compare the total returns delivered by 10-year Australian government bonds with the returns provided by Australian shares (plus dividends). The returns are little different over the last 30 years, with one important exception: bonds had significantly less risk of loss.
Shares have a very important role to play in most investment portfolios, and I am optimistic about the outlook for the Australian share market.
But getting the right mix of assets is crucial.
If you are over the age of 50 and you’re in the “default” option in your super fund, it’s highly likely that no more than 11% of all your money is in cash and bonds. Yet the optimal bond-allocation for you is certainly far higher.
So, what can you do?
You could look at a self-managed super fund (SMSF) or you could tell your fund how you want your money invested.
Either way, use this ready-reckoner: if you’re 20, no more than 20% in bonds and cash; if you’re 50, no more than 50% in bonds and cash, on so on.
You should always get expert advice. But you can also start by ensuring your risk profile is matched to your age.
 Mark Bouris is executive chairman of <a target="_blank" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance. He runs a <a href="https://twitter.com/#!/markbouris" target="_blank">Q&amp;A session on Twitter</a> every Monday afternoon at 4pm for small business owners using the hashtag #bizQandA.
 
 
 
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Does a forklift driver know more about a balanced portfolio than a super fund CEO?: Mark Bouris

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In the financial services industry we talk at length about asset allocation, spreading risk and the risk-return curve.
But when Australians talk about saving for their retirements it’s the basic idea of the diversified portfolio which is most important.
I was thinking about this recently after I put out a Twitter asking where followers would put $10,000 for a year if I gave them the money.
Two-thirds of the responses would put their $10k into shares, property or cash but not a single person told me that they’d split the $10k and invest it in different asset classes.
None of the almost 70 people who responded to me said: “I’d put $4000 into shares and $3000 into a property trust and $3000 into a fixed interest account.”
The fund management and financial advisory industries have spent the past 20 years emphasising the benefits of a diversified portfolio and spreading your risk, and at the base of a diversified portfolio is asset allocation.
Allocating investments by class means devoting parts of your capital to Aussie shares, part to global shares, part to cash, part to property and part to bonds.
Then you match the ratios of your allocation with what is known as your life stage.
If you’re 20 your allocation will be heavier to Aussie and global equities, because the amount of time you’re invested will cancel out the volatility cycles and you’ll get higher returns.
When you’re a retiree or a near-retiree you shift the weighting of your allocation to be heavier in cash and fixed interest because while they’re lower in returns they’re high in stability.
While these dramatic shifts in asset allocation have become par for the course I’ve been rethinking it lately.
Allocating assets by investment class has an extreme look to it. The two main risks that retirement savers face are market risk and inflation risk.
You expose yourself to market risk because you chase higher returns and that means you’ve invested in volatile equities.
Inflation risk occurs because you’re chasing low risk, which means investing in cash that hovers very close to the inflation rate.
Secondly, we are encouraged to skew our retirement investments to market risk or inflation risk, by the default options at our superannuation fund managers.
If you tick default for most of your accumulation phase you’ll be invested 60-70% in equities and when you identify that you’re about to retire most default funds switch you to reliance on cash investments.
That is a pendulum and it might not be as successful as we imagine.
How do we stop the pendulum?
The asset class called bonds – halfway between the risk/return of equities and cash – is a better long-term performer than Aussie equities, with very little volatility.
I believe the issue of asset allocation will be revisited in this post-GFC market and we’ll come to see it as a chance to properly balance a portfolio from the outset rather than change the risk profile to match life stages.
Keep an eye on bonds – they’ll be a part of that change.
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Where would you invest $10,000?

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This week I asked my Twitter followers where they would invest $10,000 to get a good return over 12 months.
Almost two-thirds said they would invest into just three asset classes: property, shares, or a savings account.
The glaring omission was “bonds” – just 4% of respondents thought to invest in them.
Simply, bonds are debts. When called a “corporate bond”, they represent a borrowing made by a company, which offers an interest rate so that you lend the company money.
A “bank-issued bond” is when banks borrow from big investors by issuing bonds.
High-quality bonds offer stable returns with relatively low risk.
For example, today you can get nearly 6% per annum on a senior-ranking, variable-rate bond issued by one of the major banks. And many are liquid: you can put your money in and take it out when you want.
The rate of return you get on the bond is usually tied to how “secure” it is, or the risk that you won’t be paid your interest.
So why are you not offered bonds?
The financial regulations say that the normal minimum investment in a bond is $500,000, which means they are limited to the big end of town.
This is supposed to protect “mums and dads” from bad decisions. But it’s actually unfair: none of you are stopped from buying far riskier bank shares via an online stockbroker.
The difference here is between debt and equity, a point you need to understand: almost all businesses are made up of “debt” and “equity”. If you put your own money into starting a new business, your holding is your equity. But you may also borrow money from the bank, which is your debt. If the business fails, you bear most of the risk – the banks get their money first.
The same applies to a home: when you buy a house your deposit is your equity. But you also typically take a loan from the bank. When your home’s value rises and falls, so does the value of your equity. In contrast, the bank’s return is the comparatively secure interest rate on its loan.
Now that you understand this, why shouldn’t you be allowed to get access to the lower risk returns associated with high-quality bonds?
It’s easy for you to buy shares in Westpac, but nearly impossible to invest in Westpac’s AAA-rated covered bonds.
ANZ recently listed one its bonds on the ASX so you can buy and sell small parcels of it while getting 7.1% per annum return.
This is going to be a big topic in the years ahead because retirees, near-retirees, and even people in the “accumulation” phase of their lives need an alternative to low returning bank accounts or the high risks of shares. Super funds haven’t helped by putting 60% 70% of default options into volatile shares rather than stable bonds.
My advice: take expert advice and become educated about bonds so you can save smarter.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance. He runs a <a target="_blank" href="https://twitter.com/#!/markbouris">Q&amp;A session on Twitter</a> every Monday afternoon at 4pm for small business owners using the hashtag #bizQandA.
 
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Become an expert in bonds so you can save smarter

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If you want to take the pulse of the Aussie spirit, have a look at how we approach business. We love it – we have 2.5 million registered businesses in this country and one of the highest rates of business start-ups in the world, running at around 15% of the business population each year.
We’re a nation of entrepreneurs – a settler economy opened up by waves of migrants happy for stability and freedom and willing to work hard for a better life.
Yet we don’t really tell ourselves this story in the way that Americans do.
In my experience the entrepreneur’s journey starts with concepts such as change, difference and improvement. Entrepreneurs look at how they can bring a different approach or product to the market. Or they see a chance to improve on what’s being offered already or they see an opportunity to change the consumer’s experience.
In many respects, the entrepreneur is the consumer’s friend. We see the world from what the buyer really wants, if only she were offered it.
But an entrepreneur is not only an “ideas person”; she must also be a business builder. They need the intellectual curiosity and a dogged dedication to hard work.
Entrepreneurs have to be up for a fight. You need that toughness because the most successful entrepreneurs are “disrupters” – people who see industries protected by high barriers of entry and decide to take them on, with a point of difference.
And these large industries – banking, airlines, phones companies etc. – will do what they can to stop newcomers competing with them.
So some of the highest-profile entrepreneurs are as famous for never giving up as they are for their business acumen. Think of Sir Richard Branson and the Virgin brand, which took on music production and retailing, airlines and banking; or John Ilhan, the Australian who built Crazy John’s phone retailing and ended up in a long fight with Telstra.
True entrepreneurs find it hard to give up. We don’t like being discouraged or intimidated.
I founded both Wizard Home Loans and Yellow Brick Road on a point of difference: a mortgage at a better price and a full-service financial services firm with advice at affordable rates.
I’m involved in a company called TZ – it replaces existing technology with something smarter and more efficient.
They all started with intellectual curiosity. But they were built by doing long days and staying focused when mistakes were made and major fights loomed.
However, those who want to be entrepreneurs should not be confused between toughness and arrogance.
Toughness allows you to keep going with a positive attitude.
But arrogance is another form of delusion.
Arrogance takes away your greatest tool as an entrepreneur: failure.
All the best entrepreneurs have stumbled and fallen in their careers. But they don’t crumble: they use their mistakes to learn, to reorganise, to make a better mousetrap, to come back bigger and better than before.
I have made many mistakes in my journey and all of them contributed to the successes.
But arrogance will not let you see your mistakes.
Lastly, fear. Everyone who tries to build a business will experience fear at some point. The stakes get high, and success or failure seems to hinge on a single decision. It can be gruelling.
The worst thing about fear is that it either stuns you into doing nothing, or it clouds your judgement, making irrational actions seem acceptable.
To avoid this, make yourself see fear objectively, as another obstacle but not an insurmountable one. Put it on your to-do list, as an item. But whatever you do, don’t let fear run the show.
There is no template for being an entrepreneur: do your homework, have a plan, get good people around you. Everyone will tell you this. But the real test of the entrepreneur is that you want to build something and nothing will stop you.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
 
 
 
 
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Entrepreneurs must know the difference between toughness and arrogance: Mark Bouris

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After years of the banks fighting it out to lend to households and business owners, it’s your cash that is now a sought-after commodity at banks and credit unions. And the interest rates being paid to get your cash have been climbing steadily.
While this might seem like a good thing, you should be looking very hard at where your money is going, what rate you’re paid and what conditions are attached to your deposit.
The basics of saving are: when you borrow from the bank, you pay an interest rate for the use of the bank’s money. When the bank takes money from you, it pays you to use your money in the form of a deposit rate.
The bank lends your cash to a business owner or a home buyer, and it makes its profit by paying you less for your cash than they charge the borrowers.
Quite a bit more, actually. Did you know that banks earn, on average, 2.4% more on your deposits than they pay to you? This gap is called the “spread”.
And the lower your interest rate, the more the bank makes off your money. Regardless of whether you are getting 4% or 4.5% for your deposits, the bank’s personal loan rate is still 14%.
When you accept a low interest rate, you are helping the banks make bigger profits than if you held out for a higher rate.
When you deposit money, you should ask questions. For example, once the bank has quoted you its deposit rate, ask what its rate is for wealthy customers, for institutions and “private bank” customers.
You see, it’s not unusual for small savers to be paid a lower interest rate than wealthy customers on the same savings product.
In this regard, you should know that banks earn the greatest profit from your transaction accounts. Individuals’ and small businesses’ transaction accounts usually earn zero interest, yet the bank uses this money for highly profitable “overnight” money lending. They should be paying you a deposit rate on these accounts.
You should also know how the term deposit game works. A bank pays you a fixed amount for a set time but if official interest rates are rising, it charges the borrower more while your interest rate stays the same. And if you want to get your money out early, the bank charges you a penalty – up to 90% of your interest.
And watch for this: when banks promote high-interest special offers – the promised rate is often for an introductory period before reverting to a much lower rate. There are products where you can be offered 5.75%, but it only lasts for four months before reverting to 4.75%.
Perhaps the biggest decision is how to offset a high deposit rate against convenience of access.
The highest deposit rates you can find involve you being unable to touch the cash for a period of time – as with term deposits – or being charged to take the money out, as with managed funds.
Conversely, you find that transaction accounts – which allow you to take money out at will – have either zero, or very low deposit rates.
The best trade-off is the account where you have a term deposit-like rate and on-call access to your money. Some online accelerator accounts work this way.
In the future, keep an eye out for “enhanced” cash management accounts, which will pay institutional deposit rates while also allowing easy access to your money.
For now: ensure you have the access to your cash that your lifestyle or business requires, and never be afraid to ask for a better deposit rate.
And one final tip: you don’t have to forgo interest for a “deposit guaranteed” account. The federal government guarantees all deposits at Authorised Deposit-taking Institutions (ADIs), under $250,000.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
 
 
 
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How to get the best deal from your bank

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There isn’t a day that goes by that I don’t get an email from someone in a dire situation because of bad financial advice. The lending industry was built to give people opportunity, yet more and more Australians are finding themselves in impossible circumstances because their loans are doing more harm than good.
Recently, I received a letter from a woman named Cathy who found herself in this category. Cathy was being charged $10,000 per month on top of her mortgage for being in default after receiving bad advice from a lender. Now she is facing having to sell three months into a six-month emergency loan, or face foreclosure.
Unfortunately this story isn’t uncommon. After the GFC, more Australians have to resort to short-term, emergency finance at very high rates, usually to retain their house or to keep a business alive. It makes people very vulnerable.
If you find yourself in this position, you must acquaint yourself with all the issues before taking the money, because there isn’t much you can do once you’ve signed.
For a start, all lending is made on the basis of risk and price. If you’re at high risk of defaulting, lenders charge high interest; low risk of default equals a lower interest rate. Generally speaking the lowest rates have the toughest criteria and they are sourced from the institutions you are aware of: the big banks, the regional banks, credit unions and building societies, as well as the independent financial institutions like Yellow Brick Road.
In the post-GFC world, lending criteria has tightened and the riskier style of loans – no-docs, low-docs and “asset-lends” – have largely dried up in mainstream lending.
This has pushed many Australians with patchy employment records and bad credit histories into borrowing from organisations they are unfamiliar with – organisations that might be reputable but that could also be “loan sharks”.
Having accepted that your personal situation means you’ll need to borrow from this high-risk, high-rate end of the market, but it doesn’t mean you have to put up with any terms the lender demands.
For instance, you should never enter a loan without having everything in writing, including all the fees, penalties and establishment charges spelled out.
You should be particularly careful about the penalty interest charges for late payment; it’s these penalties that make some loans extortionate.
You should also avoid lenders with a poor or non-existent reputation. The Australian Securities and Investments Commission (ASIC) has search engines on its website that alert you to complaints against a company or broker, or the site can reveal that there’s no mention of the organisation at all.
A lender with no reputation isn’t always predatory. But if you’ve never heard of them, have a look at their accreditations. If you’re going through a broker, are they a member of the MFAA – the Mortgage and Finance Association of Australia?
Do they subscribe to COSL, the Credit Ombudsmen Service Limited, or another external dispute resolution provider? If you are going direct to a lender, do they have an Australian Financial Services Licence?
Organisations will advertise accreditations on their stationery, so if you see AFSL or ACL on their business cards, they use standard loan agreements.
If the lender has none of these accreditations and seems to be outside the mainstream, I suggest you engage a solicitor to review the documents.
Perhaps the biggest problem of this kind of lending is the borrower himself.
When financial panic sets in and you face losing your house or business, it’s easy to focus so hard on getting the money that you forget it was an emergency facility.
If you have to take short-term money at high interest rates, have a plan for what happens when the term of the loan is up or the financial panic is over.
Does the debt get folded into bank debt? Is it discharged? Do you sell whatever you have financed? Do you settle with the lender?
I have sympathy for people who have to take these high-interest loans. But you can even the odds by looking out for yourself: if someone says “no credit history – no worries”, start worrying.
Do your homework, get advice and have a plan.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
 
 
 
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Beware of predatory lenders and do your homework before you sign: Mark Bouris

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You know the cost of living is rising when a standard topic of conversation is how to earn more money.
The Reserve Bank and ABS both tell us that wages growth has been strong in recent years, but a lot of people tell me that it’s getting harder to make household earnings cover all the things they used to cover.
I have a quick solution to this problem. It’s old-fashioned – it was around when I was a child – and it essentially says that a penny saved is as good as a penny earned.
Whether you’re saving for a goal or wanting a better safety net for your mortgage or rent payments, a good way to flush out more cash is to look for savings. Just as you occasionally have to clear out the garage or the basement and get rid of all your excess stuff, making an audit of your outgoings is always rewarding and is something you should do at least once a year.
The best thing about this approach is that technology is now on your side. In many cases, others have done the hard work for you.
You could start with your mortgage payments: is it the best home loan? Could you pay less elsewhere? Would you pay less in interest if you started paying fortnightly?
You can use an online comparison service like Canstar, or go to a broker and get them to find you the best loan. It’s worth doing this, and it’s not unusual for a person who switches mortgage to save more than $100 a month.
Another expense that people tend to set and forget is insurance. When you sit down and go through all of your policies, I bet you’ll find insurance you no longer need, premiums that are too high and premiums that are wrong because your status has changed.
The average household has around six insurance policies, and I’m sure you can find savings of at least $100 a month by spending an hour ringing the company and negotiating for a better deal.
If you don’t feel you can do this, use one of the online comparison sites or go to an insurance broker and ask them to streamline your insurance. Just about everyone who does this saves money.
OK, so now you’ve saved $200 a month on financial services. Now, have a look at utilities. With power and gas, there are some excellent comparison websites where you can input your current provider, usage and tariff and the service will return you a provider and a plan that you should be on.
There are people saving $50 a month by using these sites, so why aren’t you on the right power and gas plan?
The same goes for phone and internet plans. Most of the bundled call and data plans run for two years, and you’re a mug if you don’t at least shop around when the end of the two years is up.
I’ve seen differences of $20 and $30 per month for the same deal. So why keep paying more when you can pay less?
The same goes for cable TV. If you take the full package but you hardly watch a third of the channels you’ve ordered, why not cut it back to the option that’s $20 cheaper?
Once you’ve looked hard at utilities, look at your grocery bill. Most people shop at the supermarket that’s closest to their home or their work. But these are not always the cheapest. There are many cut-price supermarkets: you may have to bring your own bag and put up with a smaller selection. But if you can save $100 a month by going to a different supermarket, it’s worth it.
These are the most obvious monthly overheads that most households have to spend on, yet I’ve identified a conservative $400 per month in savings. If you’ve never done this before, it could be greater than that.
The money you don’t send to insurance companies and banks, phone companies and supermarkets instead finds its way back into your wallet.
It’s as good as money earned, but you didn’t need a second job to do it.
Mark Bouris is executive chairman of <a target="_blank" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
 
 
 
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A dollar saved is a dollar earned 

A who's who of Australian surfing, business and entertainment has emerged on title records following the completion of Esprit Rainbow Bay, the latest boutique beachfront apartment development by former professional surfer Paul Gedoun's S&amp;S Projects.

The completed project has attracted an enviable collection of owners, many with long-standing ties to the southern Gold Coast and the surf culture that has helped define Rainbow Bay and neighbouring Kirra for generations.

Given Gedoun's own background in surfing, it perhaps comes as little surprise that some of Australia's most recognisable surfers have chosen to buy into the development overlooking one of the country's most celebrated stretches of coastline.

Pezet Matheson directors Jayde Pezet and Todd Matheson launched the project in late 2021, and have managed the sales campaign all the way through to its sell-out and recent completion.

<img alt="Esprit" data-entity-type="file" data-entity-uuid="08fc6261-b84e-4b09-8a44-66d3067fd0d1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-29%20at%208.51.05%E2%80%AFAM.png?VersionId=4AOcb6ETZwNUnMPdTtz1B3pZAIB_jgZ2" />

Former world champion Mick Fanning, who grew up in Coolangatta, secured an apartment in 2023. He paid&nbsp;$2.07 million. Last year he sold his Bilinga home for over $16 million.

Three-time world champion Joel Parkinson also purchased in the development, alongside big wave surfer Mark Mathews. Mathews bought the most expensive apartment in the building, spending just over $4 million.

Joining them is Rip Curl founder Doug Warbrick, whose company helped shape Australia's global surfing industry over the past five decades.

The appeal of Rainbow Bay has extended well beyond the surfing community.

International DJ Paul Fisher purchased an apartment through his investment vehicle, YLB Developments, an abbreviation of his trademark phrase "You Little Beauty".

The purchase comes as Fisher and his wife Chloe are developing their own luxury apartment project further north in Palm Beach. Their boutique beachfront development, Pescado, comprises just seven apartments on Jefferson Lane, which start from just shy of $6 million. The couple intend to retain the two-level penthouse as their Australian base between international touring commitments.

Melbourne Storm coach Craig Bellamy and his wife Wendy have also invested in Esprit, purchasing two apartments after spending decades holidaying on the southern Gold Coast. They also have a luxury apartment in Joe Adsett's Rockpool, less than 400m away from Esprit.

<h2>Boutique project draws owner-occupiers</h2>

Esprit launched in 2021 and sold strongly, with buyers drawn to its boutique scale, beachfront position and contemporary design.

The completed development comprises 94 apartments across 11 levels, offering expansive floorplans designed primarily for owner-occupiers rather than the investor market.

Crowning the building is Club Esprit, pitched as being the Gold Coast's first residential rooftop wellness centre. The roof features a&nbsp;25 metre magnesium lap pool, which is surrounded by wet daybeds and poolside cabanas,&nbsp;multiple barbecue areas,&nbsp;a yoga and relaxation play lawn, and a private dining room with a kitchen scullery, bar, lounges, and an outdoor terrace.

The wellness centre is&nbsp;fully equipped with a Technogym, ice bath, infra-red sauna, steam room, thermal room, and treatment room. The roof has views spanning&nbsp;Rainbow Bay, Snapper Rocks and the Pacific Ocean.

<h2>S&amp;S Projects continues to shape Rainbow Bay</h2>

S&amp;S Projects founder Paul Gedoun has become one of the key figures behind Rainbow Bay's evolution over the past several years.

After establishing S&amp;S Projects, Gedoun has focused on delivering lifestyle-driven apartment developments designed primarily for owner-occupiers seeking a permanent coastal home.

Esprit is Gedoun's third completed project in Rainbow Bay, following Flow and Awaken, both of which achieved record prices for the suburb.

He is now delivering <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, a 38-apartment development on Boundary Street that is currently selling, and has no plans to leave the precinct anytime soon. S&amp;S Projects has also lodged plans for its fifth Rainbow Bay development, an 88-apartment project on Boundary Street featuring a strong wellness focus.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">First look: S&amp;S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street</a>

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Joel Robinson

Who's who of buyers revealed as Esprit Rainbow Bay settles

Nature Based Cities (NBC), the not-for-profit organisation focused on improving biodiversity and nature outcomes in urban development, has launched its latest industry design guidelines and accreditation framework, this time targeting precinct-scale residential communities.

The move extends NBC’s influence beyond its initial focus on medium and high-density residential developments. Several projects have already achieved NBC accreditation since the launch of its Medium &amp; High-Density Residential Guidelines in early 2025.

The expansion into masterplanned communities and new residential precincts reflects the growing need for stronger nature-positive benchmarks as Australia’s outer suburban growth corridors continue to expand at pace.

Paul Hameister OAM, NBC Founder and the Executive Chairman of Melbourne developer Hamton who itself leans heavily into nature and biodiversity in its developments, says the&nbsp;nature-first approach to mitigate the effects of climate change has become standard in other parts of the world such as the UK, but Australia is lagging.&nbsp;Australia’s environmentally sustainable design (ESD) rating tools have no minimum mandatory requirements for living landscapes.

“We’ve always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren’t there,” Hameister says. “In Australia, you can have a five-green-star rated building that’s concrete and glass with not a blade of grass. 
 
“The focus is on reducing emissions, which is laudable, but there hasn’t been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities.”

He says that having now&nbsp;made good progress in supporting developers of medium and high-density residential projects, NBC is now looking to bolster better nature-based decision-making and recognise developers of greenfield projects in the outer ring and large inner-ring brownfield precincts, who want to champion nature and living landscape as a defining feature.

Since 2022, the not-for-profit has sought to remove the roadblocks preventing developers from incorporating nature and living landscapes into their projects, shifting the conversation from the reduction of emissions and grey infrastructure, toward recognising nature as an essential infrastructure.

The New Communities Design Guidelines and Scorecard arm developers with the tools needed to deliver a nature positive outcome for their new communities. Intended to be adopted at the outset of the planning process, the guidelines are designed to help create communities that are cooler, healthier and more resilient while also enhancing social wellbeing and long-term economic value.&nbsp;

New Communities developers seeking accreditation will be independently assessed across a range of key criteria including ecology, tree canopy, biodiversity, and walkability. Once the masterplan is complete and submitted for approval, the scorecard is formalised based on proposed outcomes. Projects that meet the NBC criteria will receive either Commended or Exemplary accreditation outcomes, creating a clear benchmark for nature-positive new communities in Australia.&nbsp;

Janis Fischer, Director at Tract and NBC Advisory Council member, said the development of new communities in our suburbs can have a substantial impact on nature and biodiversity.

"By incorporating nature-based design principles at the inception of a project, developers and their design teams can achieve nature positive outcomes that are good for both people and the planet.’’&nbsp;

NBC accredited New Community projects will gain access to NBC branding and marketing tools to help communicate their nature-based credentials to purchasers and the broader market.&nbsp;

Nature Based Cities: A new Australian benchmark for developing nature-positive new communities

Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.

For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.

Online shopping has become one of the clearest examples of that change.

Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.

For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.

That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe>

Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.

The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.

For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.

As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.

It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.

Apartment design is adapting to the way Australians shop

While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.

Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.

SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.

"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.

"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."

[smartcode_project:default project_id=134323 project_image_fid=367129]

Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.

Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.

Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.

The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.

[smartcode_project:default project_id=134323 project_image_fid=6393]

Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.

"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.

"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."

Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.

[smartcode_project:default project_id=134323 project_image_fid=6402]

The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.

Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.

"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.

[smartcode_project:default project_id=134323 project_image_fid=6383]

The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.

Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.

The Walden is currently under construction and is scheduled for completion in 2028.

[smartcode_project_cta:default project_id=134323]

ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.

The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.

The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" />

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Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.

At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."

"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" />

DKO said the design had been shaped by the site's landscape setting and surrounding open space.

"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."

"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."

The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.

The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.

Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

Mark Bouris

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