Purchase Your Biggest Investment Ever With A List After Hearing The 2012 Budget

Thirteen Pertinent Points for your “To Do”List When Buying Property after the 2012 SA Budget Speech

·         First things first; create a needs analysis. Do you want a lock up and go scenario, or do you have a dog and cat or a family to consider? Write this at the top of your “to do” list when investing in property in 2012.

·         Location, location, location is all-important. This will affect how much you will be able to borrow from the bank, and this will also affect how much you will pay on your monthly insurance premium. Buy the cheapest house in the best area, and you will never go wrong.

·         Once you have heard what you are in store for in 2012 after hearing the 2012 budget speech, you might want to decide how to invest your money accordingly.

·         Perhaps you would like to go ahead anyway; although it is important to know how our money is going to be spent according to Pravin Gordhan,  it is also important to get into the housing market, and now seems to be as good a time as any, whether the budget bodes well or not.

·         When you go house-hunting keep your “to do” property shopping list with you at all times so that you do not lose focus.

·         When looking at location, it is also important to take into consideration where you work, and where you spend most of your social time.

·         Fine-tune your list all the time; your ideas might change, and especially so after hearing what the SA budget has in store for us.

·         If you are a first time home buyer then it might be a good idea to take someone older and wiser with you when looking for property, as wisdom comes with age and two heads are always better than one.

·         Be on the lookout for any pitfalls; as a first time buyer you might not be aware of these.

·         Shop around at different banking institutions and find out what the interests rates are. Even better wait for the SA budget and then make this decision based on those facts.

·         The professionals will be able to assist and guide you in the right direction; bond originators are experienced and would be in a position to shop around on your behalf, taking the leg-work out of this exercise.

·         Acquaintances and friends who have bought homes recently will have a good idea how to buy a home; why not ask their advice?

·         Always look for estate agents who have got the most ”sold” boards  in the area you are interested in; THESE are the ones who know the area best, which houses will be for sale. These agents will be the most professional and successful in the area.

Your best financial indicator for borrowing money to buy a home would be the 2012 budget speech, as this will be a good barometer on how our money is going to be spent in the next twelve month period. Hopefully Pravin Gordhan will make many positive changes in SA, so that everyone can benefit.

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Quantitative Easing - Does it work?????

So time for a bit of thought on such a romantic day!  happy st valentines day to you and the bank of England!!!

Central banks try to raise the amount of lending and activity in the economy indirectly by cutting interest rates. Lower interest rates encourage people to spend, not save but when interest rates can go no lower, a central bank's only option is to pump money into the economy directly. That is quantitative easing (QE).The way the central bank does this is by buying assets - usually financial assets such as government and corporate bonds - using money it has simply created out of thin air. The institutions selling those assets (either commercial banks or other financial businesses such as insurance companies) will then have "new" money in their accounts, which then boosts the money supply.

In March 2009, the England Monetary Policy Committee (MPC) announced that it would reduce Bank Rate to 0.5%. The Committee also judged that Bank Rate could not practically be reduced below that level, and in order to give a further monetary stimulus to the economy, it decided to undertake a series of asset purchases. Between March 2009 and January 2010, the MPC authorised the purchase of £200 billion worth of assets, mostly gilts – UK Government debt. The MPC voted to begin further purchases of £75 billion in October 2011 and, subsequently, at its meeting in February 2012 the Committee decided to purchase £50bn to bring total asset purchases to £325bn but doubts linger over how well its policy of quantitative easing is working

A Bank of England report into the effect of the first round of QE suggested that the measure had helped to increase gross domestic product by between 1.5% and 2%, indicating that the effects of the programme had been "economically significant".  QE worked in 2009. Deflation in the cost of living (the all-items retail prices index measure) peaked at just under 2 per cent (i.e. the price level fell about 2 per cent) in mid-2009. The money stock would have fallen something like 5-10 per cent without QE. The plan to lower bond yields has obviously worked with the 10yr bond falling by 39% in the past 3 years. QE works by the Bank buying bonds in the open market with the demand causing the yield to fall and their attractiveness as an investment to fall as well. This has allowed the UK to maintain a level of bond auctions, and public debt, without too much trouble from the ratings agencies or any vigilante bond traders.

From an inflation point of view the result is less certain. Inflation in the UK has remained sticky throughout the crisis with CPI remaining above the Bank’s 2% ± 1% target since January 2010

The Tea Break - David Te Brake

Main Feature – Where to for SA in 2012!

South Africa has been fortunate enough to not have been as severely subjected to the hammering that Europe has had to endure. We can give credit to 3 major factors that have contributed to this outcome:

• A decade of relentless increases of commodity prices
• Excellent capital inflows from foreigners
• Good banking and stringent monetary domestic systems

However, these fine runaway trains may have run out of steam. Consistent high levels of unemployment, aggravated by a mass influx of foreign “immigrants”; the severe inefficiency of our age old deep-level mines, coupled by potential political meddling and increasing costs of labour and electricity; and most importantly the diminishing productivity of South Africa’s work-force in general; all threaten the long-term outlook for SA as a whole. If the SA government does not start reinvesting or re-subsidising in the world’s supposedly “next BIG commodity” i.e. food, and start seriously addressing unemployment and non-productivity, then South Africans may have a short road left to travel on.  In my opinion, it is therefore significantly important for South Africans to be doing one thing over the short/medium term: Investing and STOP spending! Grow some wealth while the going is still good. Things for 2012 look above average on the equity front with a good proportion of your returns to be expected from US stocks. Stay away from commodity stocks. Commodity levels are situated way above their fair values, which make commodity stocks even more overpriced.

Updates – Discovery Health

Many people were left upset this year as Discovery Health seemingly drew back on some benefits on their top end plan by imposing limits. Such limits generally only come about when there is severe abuse and misuse of benefits, generally from a minority of users. Members forget that they are just that, “members”. This implies that you are a member of “group” or “club.” Your Medical Aid is not as such a policy as you think it may be. It is a pooling of all members funds, to which Discovery health is then paid an administration fee to administer and pay out benefits to those most in need of the funds. Discovery Health does in no way become “more profitable” by not paying out on a benefit. I for one, as a member of Discovery Health, have no tolerance for other members abusing the “system” and for effectively prejudicing me and therefore personally embrace the actions taken by the board of Discovery health.

Statement of the Month

“The optimist claims that we live in the best of all possible worlds, and the pessimist fears that this is true” – James Cabell


Thanks to David Te Brake - SA's leading financial broker for financial planning.

You can get a home loan or a loan with bad credit!

Of course you can get a loan with bad credit as there is no question that people with a bad credit score can also obtain a loan or a home loan, but before you approach a bank or originator, find out what’s on your credit report. 


Obtain a copy of your credit check either online or by mail and look it over for errors, then get them removed immediately by calling Mytransunion, formerly known as ITC and Experien. 


This can improve your credit rating and help you get approved for a loan you so badly want.