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In today’s hectic world we often spend so much time worrying about the future or lingering in the past we forget to enjoy the present. But tuning into the wonderful things happening around us as they happen can be life changing. It’s also a great way to combat stress, especially when it comes to our finances.
The Australian Psychological Society’s 2015 stress and wellbeing in Australia survey found financial concerns are the top cause of stress among Australians. Whilst we stress about our finances sometimes things fall outside of our control. Being more mindful is one way to address this.
Mindfulness expert Elizabeth Granger explains mindfulness is moment-to-moment awareness. “This can be cultivated by doing formal mindfulness practice where you set aside meditation time to deliberately pay attention to the present moment in a non-judgemental way. It involves bringing curiosity and a sense of allowing what is here to be here, as opposed to judging what’s happening in our lives.”
Mindfulness practices originated from Buddhist traditions more than 2500 years ago. So they are not new phenomena. More recently these techniques have been embraced by western culture.
Nevertheless, mindfulness takes a certain amount of effort, says Granger. “We spend so much time wanting experiences or ourselves to be different it can feel difficult to allow things to be the way they are, as opposed to how we wish them to be. While there is nothing technically difficult about mindfulness practice, it does require discipline to pay attention this way.”
Path to the practice
Granger came to mindfulness while working as a litigation lawyer and studying psychotherapy on the side, all while raising two young children.
“As soon as I started practising I noticed how it helped me manage stress and how I could think more clearly under pressure. It helped me open up to many more possibilities,” she enthuses.
According to Granger she is now more able to manage her emotions thanks to her mindfulness practice. “My focus has improved, including my ability to resist distractions. But the biggest change is the way I am open to the world around me. I have more capacity than before and I’m happier as I savour more moments of my life.”
Mindfulness can be practised anywhere, says Granger. “I remember once meditating while walking around the airport when my plane was cancelled, so it is a very portable practice which can be done anywhere.”
If you’re feeling the stresses of life, mindfulness can be a way to control or reduce those feelings. Another way to ease your money worries is to ensure you have your financial affairs in order. If your financial future is keeping you up at night and mindfulness just isn’t doing the trick, please don’t hesitate to contact us.
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Shaking the foundations
High prices. Fast bidding auctions. A mass of new constructions. The housing market has risen fast in the past few years but is it becoming too risky? Tim Rocks, Head of Market Research & Strategy, believes there is little to fear from housing at the moment but investors might find more attractive opportunities in shares.
Burning down the house
The view of rapid increases in house prices since 2011 has lead to fears around:
- a housing bubble
- the potential of a crash and mortgage stress
- timing for a potential crash.
But are high house prices really a sign of bad things to come?
The truth is, the increases have been concentrated in areas with rising employment, incomes and population flows like Sydney and Melbourne, while others have just risen with inflation – or even fallen like Adelaide and Perth (Source: Corelogic). Falling interest rates have offset increasing house prices so households are actually spending roughly the same percentage of their income on mortgage repayments as they did before the rapid rise in prices. Mortgage defaults are also lower than historic averages (Source: Reserve Bank of Australia (RBA)). This might change if interest rates or unemployment suddenly rise, but at this stage, interest rates are more likely to stay the same or even decrease.
Nothing lasts forever
The sharp increase in housing prices, even in areas like Sydney and Melbourne, is unlikely to last forever but doesn’t necessarily mean a crash. While prices have increased, construction of new apartments has also been rapid. For example,
developers added 30% to city apartment supplies in Melbourne, 36% in Brisbane and 18% in Sydney by the end of 2015 (source: RBA). This additional supply has seen rent increases slow down and vacancies rise, which should gradually translate to a slowdown in prices and construction.
So from an investment perspective, housing is likely to be less attractive over time because a greater supply not only means less opportunity to command high rent, but also less certainty of a constant rental income. But for owner-occupiers, this change may translate to some stabilisation in house prices – and greater opportunities if interest rates stay low.
A share in time
Investors specifically targeting returns may need to extend their search beyond bricks and mortar. Currently, shares and listed REITs (listed property trusts) offer higher yields compared to the rental income and deposits from residential property
(Source: Datastream). This is likely to continue over the next couple of years, particularly as supply in residential property increases, but also as the need for office space, warehouses and shopping centres continue to make listed REITs necessary.
An investment property may still be an important part of a portfolio, but it depends on what your goals and needs are, along with your expectations for returns. Shares and listed REITs can be a riskier type of investment, but do offer the potential both
for higher gains – or bigger losses – depending on a range of factors.