AND NOW THE SCAMS APPEAR

One good thing this credit crisis has done is flush out many of the scams as investors try to move funds out of these schemes only to be told that really there is no money there at all. Often investors are long term and have received excellent returns for many years, all funded by new investors who also want higher than normal returns. Whilst they will be horrified about their money, at least by finding out the truth earlier the damage will be limited. With the Madoff "Ponzi style scheme" in New York to cost investors in excess of $50 Billion, and many other scams and frauds in the UK, Australia and elsewhere, the overall figure will be much higher that people realise.
What can we learn from this experience? How many times have you heard the saying "If it sounds too good to be true, then it is too good to be true" There is no way that you can earn more than other investors without taking a higher risk, or worse still investing in something that later turns out to be illegal or a scam.

Scammers rely on one ingredient, and that is the greed of the investor will override his or her common sense. That coupled with some charm and an air of "trust me" and your hooked. Always remember that the return of your money is more important than the return on your money.

Sure everyone knows that these confidence fraudsters are bad people who should be jailed for their sins, but if I can just say something controversial here and suggest that most of those people who got hooked are victims of their own greed and stupidity, and in all probability they would have lost that money anyway because they were governed by the worst of all human investment traits, and that is greed. It is a characteristic that we all have, but we need to suppress it if we want to survive in a tough world. Greed pushes us to take risks which eventually start to resemble gambling more than rational investment strategies. If stupid greedy investors did not exist then nor would scammers profit from them.

Sit down now and look at your investments, savings, superannuation, properties owned, and any other form of investment that you may be involved in. Ask yourself why have I invested money in this, what are the risks, and what are the benefits. What would happen to me if this investment failed and I lost it all. Examine everything and if necessary make gradual changes to your investment strategy.

I hope this advice hasn't come too late.

CREDIT CRISIS

Yes we are in the throws of a credit crisis, but could this be the start of your wealth building in 2009.

All change brings opportunity, so if you have the determination and endeavour, you will place yourself in a position to take advantage of that opportunity and profit from it. Anyone who has secure employment or income will be in a position to buy at bargain prices whether that is a new plasma TV or a $1M commercial property, there will be bargains appearing over the course of 2009. You may not get a steal, but if you search hard enough for the right bargains then exceptional investments at the right price will appear in 2009.

Read our discussion on the "credit crisis" on www.rescueme.com.au/creditcrisis.html and then leave a comment on this blog. We want your feed back. If you are angry then tell us, if you have plans then tell us. Whatever you have to say then please say it so that all can share in your thoughts.

Spend, Spend, Spend

The words of advice from K.Rudd for pensioners and for anyone with children is spend, spend, spend. But before you do that, look at your credit card debt. You may be a lot better off paying it off your credit cards, and then burying the card in the backyard so that you leave it alone.

Australians have a lot of credit card debt, and it won't go away by itself. If you don't have any debt, and are in a great position financially then take the PM's advice, but for the rest of us perhaps we should be a little more prudent.

Merry Xmas.

Christmas Gift of 1% Interest Rate Reduction

INTEREST RATE REDUCTION OF 1% - 02/12/2008 - The RBA has today given the economy a full 1.00% reduction in the official interest rates. This will save a borrower with a $250,000 home loan $2500 per annum in interest which is over $200 per month extra cash they will have in their pocket. We are now getting to a point where potential new home buyers really should look at their options to purchase instead of renting. We have been predicting a surge in new home buyers coming onto the market ever since the two pronged stimulus of interest rate reductions and very generous first home buyers grant of up to $21,000

With variable rates at 6.00% and the likelihood of more rate reductions in February and March 2009 then I can't remember a better time to buy that first home. Don't forget that the First Home Buyers Grant will reduce back to $7000 on 30/06/09 and if it the government choose to maintain that grant, then it will give a stimulus to the market and increase home values across the board. Either way you really can't afford to miss out on that grant if you are eligible for it.