Contributors

Banks… If You Can’t Beat Em Join Them

Posted:05.17.2012

So the banks are the focus of a traditional post RBA rate movement ‘bashing’ which is understandable as Australian’s will generally be effected in some way or another because they either

1/ have a home loan

2/ have savings account or a term deposit

3/ are a shareholder

Now banks provide a service and Australian banks are as strong as any in the world which was demonstrated through the GFC as other banks around the world were defaulting. Now as per any other business, banks are out there to make money for their owners, ie their shareholders of which many Australians are either directly or through their superannuation funds and if you are not all in cash or self manage your fund the chances are you are invested in them as well.

But just as a business like your local supermarket, they have a product to sell. To enable them to have this product to sell they need to buy that product and the difference between how much they buy the product for and sell the product for is their margin which the use to generate a profit which they can then return to their owners/shareholders. The banks product is however lending money, so to lend money they have to buy money…… to buy money the banks can do several things, one of which is borrow it from depositors, ie savings accounts and term deposits for a certain interest rate and then lend that money out at a different  interest rate. The difference of which is the margin they keep for the service.

Competition among the banks for the consumers money ie term deposits and debt will push this margin down and ensure the consumers win but the banks will also always try to keep this margin at a suitable level to keep their owners/shareholders happy.

The trick is to remember that when all this noise is out there – the effect of how the bank reacts to reserve bank cash rate changes will differ for each person, depending on whether you are a borrower, depositor or shareholder.

How do interest rate changes affect you?

Alisdair Barr is the founder of Future Map, a dynamic financial literacy program focused on building life planning and financial literacy skills in the workplace. Having held senior leadership roles for the last 10 years at Commonwealth Bank of Australia, he is passionate about reducing complexity and helping to map out a better future for all Australians. More from Alisdair on www.futuremap.com.au

With or Without

Posted:04.10.2012

By Mel Rodgers

My house has running water; cold, undrinkable, straight from the Mekong River. I have been wearing the same weeks’ worth of clothes for 9 months now, which I hand-wash in a bucket. Electricity is intermittent. The toilet must be flushed manually. The average temperature most days is 40°C, and my house has a single fan. Bats, geckos, and spiders call my kitchen home. There are no shopping malls, no cinemas, no gyms, and no swimming pools (unless you count the Mekong, with the parasites and sewage that call it home). There isn’t even a supermarket.

Believe it or not though, my house in town is luxury compared to our digs in the field. I sleep in a hammock under the stars. There is no running water. No toilet. No plumbing. No sanitation. No electricity. Chickens, buffalo, and children meander around these rubbish-strewn villages. Breakfast is fish and rice. Lunch is rice and fish. Dinner is, surprise surprise, fish and rice.

I live in a province in Cambodia that practically no one has heard of, which is about 4 hours from the capital. That is, if the mini-bus (which is supposed to seat 14 people but generally has at least 20 squeezed in) doesn’t break down. I’m a relatively easy-going girl; I rarely wear makeup, my dress sense could only ever be described as practical, I like camping, and the best compliment I ever received was from a colleague who once described me as ‘a good sport’. I never thought that I’d struggle to ‘go without’ over here, but then I never knew what it was that I would be missing out on.

Given cultural barriers (and my poor language skills) I have not been lucky enough to form close friendship with any locals. Sure, we chat, but it isn’t the same as having a real, meaningful conversation. There have been evenings when I’ve found myself starting at the ceiling, wishing I had someone to talk to. Loneliness is tough. I have gone days without having anyone to talk to, days in which I have driven myself crazy by being stuck inside my own head.

I miss home; but I don’t want to go home because life will be easier there. It isn’t the soy lattes, hot showers, or supermarkets that have me fantasizing about living back in Australia. It isn’t the visits to my hairdresser, or the option of buying a new dress. It isn’t the latest film or concert.

It is my friends. I can’t live without human contact. I can’t live without the sister who believes in me, even when I’ve given up on myself. Or the girlfriend who candidly tells me I’m insane for caring, but still listens when I talk about him. Or the mate I can always rely on to read my stories and talk about books. These are the people who keep my world spinning; give me friends over luxury any day.

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Running For Life

Posted:03.29.2012

Heart pounding. My feet hit the pavement in a regular rhythm that syncs with my breathing. The scenery passes by and I hardly notice it. I’m in a bubble that is all mine. Some runners may overtake me, I overtake others. I don’t really notice. Instead, I concentrate on the cool air as it passes into my nose, down my throat, into my lungs. I exhale warm air as I continue striding.

I only ‘learnt’ to run a few years ago. As a swimmer at school, with short legs and no natural ability, I had avoided running. I didn’t have a runners build. I was the weakest link on relay teams at school sports carnivals. So, thinking I wasn’t any good at it, I avoided running. I gave up on myself.

My sister is a triathlete and I always watched her in awe, wondering how she could do. Then one day I decided it was about time I gave it a go. I could swim, I could ride a bike, I just needed to learn to run; put one foot in front of the other, repeat quickly. How hard could it be?

I remember the first time I ran 2 kilometres. I had just joined a novice triathlon program and at our very first training session we did a 2 kilometre time trial. I wasn’t even sure that I could run 2 kilometres. We did a warm-up jog, stretches, some run-throughs, and then it was time for the actual run. I was tired already! I made the 2 kilometres, albeit slowly, and was stoked with myself. Maybe I could face this running business after all.

I’d always had visions of myself in a tracksuit, running around an oval in the evenings, like some sort of semi-professional athlete. Now I was actually doing that (except that it was summer so I had to scrap myself wearing a fetching Adidas tracksuit from the vision). I gradually built up my running skills until I was competing in sprint distance triathlons. Then I did a 10 kilometre run. Next a half-marathon. I couldn’t believe it – the non-runner had become just that, a runner.

It’s amazing what I learnt about myself by pushing my body to do things I had never believed it could. Suddenly, nothing seemed too daunting. If I could push my body to run 20 kilometres I could do anything.

I’m not fast and I’m not particularly dainty when I run. But I am happy. I run every day because it makes me feel good about myself (so good, in fact, that I have that sentence written down in my daily planner so that I can see it every time I open it). Running allows me to think. It allows me to escape reality. It allows me to have ‘me-time’; I have no obligation to anyone else while I’m running. Running has become one of my passions.

So maybe there is something that you’ve always wanted to try, something that perhaps you thought you couldn’t do, or something where you don’t fit the stereotypical mould. Whatever it is, I urge you to get out there and try it. Give it a go. If I hadn’t stepped outside of my comfort zone I would never have learnt that, without fail, running keeps me sane, it makes me believe just a little bit more in myself, it makes me happy.


Mel Rodgers is the woman you see running along smiling; the one who makes you wonder why she is smiling while gasping for air and sweating profusely.

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    Banks… If You Can’t Beat Em Join Them

    17th May 2012

    So the banks are the focus of a traditional post RBA rate movement ‘bashing’ which is understandable as Australian’s will generally be effected in some way or another because they either 1/ have a home loan 2/ have savings account or a term deposit 3/ are a shareholder Now banks provide a service and Australian [...]

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