Australia Travel Blog: Sydney City Tour

Sydney Travel Blog: Part 4

2-Day Combo: Sydney City Tour + Sydney Harbour Lunch Cruise and Blue Mountains Day Trip

Sydney Travel Blog: Part 3 | Sydney Downtown

The best part staying of in Devere hotel was that it was in the heart of downtown Sydney and steps from the Kings Cross station. I was expected to be picked up in front of the hotel at 7:25 by the Grey Line tour bus.

I took a combo tour that was a two-day tours. On my first day, I would visit the highlights of Sydney and then a harbour cruise. The second day of the tour would take me outside of Sydney to visit the Blue Mountains.

The big tour bus came exactly on time. I sat in the front section because the bus was still not full. We would still pick up more customers at some other locations.

The bus drove through some of Sydney’s most cultural and historic spots with narrated commentaries. Our first stop was at The Rocks. This was the historic place where Sydney was founded.

Next to the Sydney Harbour Bridge, this is where European settlers first landed in 1788. I wandered through the cobbled laneways and open quarters where the convicts, soldiers, and sailors used to live and sleep. It’s like open-air, outdoor quarters made of stones.

The Rocks is also famous for hosting Sydney’s oldest pubs, upscale restaurants with harbour views, the Museum of Contemporary Art, open markets, food stalls, and much more.

The Rocks is a vibrant, historic waterfront district where present and past collide. It is one of the must-see attractions to visit in Sydney to understand the city’s past and present.   

We were given a guided tour in The Rocks and then some free time to wander around. I took this opportunity to capture my Rocks visit with my camera.

How to Build an Investment Portfolio

How to Create an Investment Portfolio

First Published: ADawnJournal.com March 14, 2010

What Is An Investment Portfolio?

An investment portfolio is nothing but your collection of investments. You can hold a wide range of investments such as stocks, bonds, money market instruments, and so on in your portfolio. The objective of building a portfolio is to minimize risks and maximize return by diversify it among variety of investments. Diversification can be made within same asset class or across different asset classes. Research has shown that a diversified portfolio spreading across different classes always is the key to build a successful portfolio.

What I Need To Consider Before Building A Portfolio?

There are various factors you should consider before start building a portfolio. These factors are:

– Your time horizon
– Your risk Tolerance
– Your investment objects etc
I discussed about these in another article. Please follow this link to read it – What Is Asset Allocation?

Are There Any General Rules of Thumb Building An Investment Portfolio?

There are too many, actually. I would have to say, the most common rule is the 100 – age rule. This is simply getting the percentage of stocks and bonds you should hold by subtracting your age from 100. For example, if you are 30, you should hold (100 – 30) 70 per cent stocks and 30 per cent bonds. As you grow older, you should be reducing your stock portion according to this rule. When you are 60, you should be holding 40 per cent stocks and 60 per cent bonds.

Another simple portfolio building approach is the Neutral Allocation – which is holding 60 per cent stocks and 40 per cent bonds. Two other portfolios worth mentioning are Lazy man or couch potato portfolios by Scott Burns and The Permanent Portfolio by Harry Browne.

To find many other portfolio ideas, do a search by entering these keyword phrases: “investment portfolio mix,” “portfolio asset allocations tools,” “model investment portfolio,”etc.

Do You Have Your Own Investment Model Portfolio?

Yes, to make investing simple and worry-free, I have been invented a model portfolio called “A Dawn Portfolio” or simply ADP. You can read more about ADP here – (I am still working on this project and will add a link once done)

To find many other online asset allocation calculators, do a search by entering these keyword phrases: “asset allocation calculators,” “portfolio asset allocations tools,” etc

Last Word

Of course, you need to decide if the recommended allocations match with your personal risk tolerance and market views. Investments must be considered in context

If you are at all interested in asset allocation strategies, I strongly recommend that you read about the science. Don’t just follow conventional thinking and rules of thumb.

How Central Banks Control Interest Rates

Monetary Policy, Central or Reserve Bank, and Interest rates

First Published: ADawnJournal.com March 16, 2010

In Canada, there is a lot of talk about interest rates right now because of the interest rate going up in June. Currently, the interest rate is set at .25 percent, which means that when banks give out loans, they will give out a loan at an interest rate of Prime plus a certain amount of percent. This means that the prime interest rate is .25 percent, so if the bank does prime plus five percent, the interest rate they set is 5.25 percent.

Obviously, the lower the interest rate from the central bank, the less people pay for their mortgages and other credit items. In June, the Bank of Canada is going to be increasing the interest rate in an effort to slow the growth of the real estate market to prevent a bursting of the housing bubble. When the interest rate goes up, so too will the amount it costs to borrow money. For example, if the interest rate goes to 1.25 percent, then that original bank interest rate example goes from 5.25 percent to 6.25 percent. Now, one percent may not seem like much, but on a $400,000 mortgage, that one percent moves the amount of interest paid for the house from $21,000 to $25,000. That is an increase of $4,000!

How is it those central banks set these interest rates and why do they set interest rates?

Well, when a central bank wants to contract the supply of money, they can increase the interest rate. If an economy is growing too fast and in danger of collapsing, you can stop the high amount of borrowing by just raising the central interest rate of the country.

During a tough economic period, a country will then lower their interest rate in order to encourage people to use credit and buy things. For example, when the recession started in 2008, the Canada lowered its interest rate greatly in order to spur on buying. What happened when this was done is the real estate market exploded because it was cheaper than ever to borrow money for a home. With the housing market now breaking records in late-2009 and early-2010, the rest of the Canadian economy began to come out of recession before the United States was able to.

A central bank controlling interest rates and monetary policy actually goes back to 1694 when the Bank of England took on the responsibility of printing notes and backing the money with gold. This maintained the value of the coinage and print notes. As time went on, it was found that to maintain the gold standard that money was compared against, there was the need to constantly change and influence the interest rate to prevent things from going out of control.

While most people know about interest rates, many do not realize just how important the Central Bank is to their lives and the effect it has on how much they pay for their homes and other credit purchases. Our lives would be very different if not for places like the Bank of Canada and its regulation of the prime interest rate.

Should You Choose Variable or Fixed Rate Mortgage ?

Understanding Fixed Versus Variable Interest Rates

First Published: ADawnJournal.com March 18, 2010

When you are buying a home, one of the biggest choices you need to make, financially-speaking, is whether you want a fixed or variable rate mortgage. This is very important because depending on which you choose, you can either save money, or waste money, and it depends greatly on what the housing market is like at the time.

For example, in 2009, the housing market was suffering through one of its worst times in Canada. To help promote buying of homes, the Bank of Canada lowered the prime interest rate to its lowest level ever, .25 percent. For individuals with variable interest rate mortgages, their monthly mortgage payment went down. For individuals with fixed interest rate mortgages, they continued paying the same, higher price. Of course, it works the other way as well. When the interest rate is high because housing sales are doing well, then the individual with a variable interest rate is often paying more than the person with a fixed interest rate, who may have signed his mortgage when rates were still low.

Fixed Interest Rate

The fixed interest rate mortgage is the traditional type of mortgage, and it helps to mitigate certain risks like inflation. Inflation has not been a problem in Canada since the early-1990s, but there is always a risk that inflation can increase during tough economic times. Individuals with a fixed interest rate mortgage will be immune from inflation because their interest rate does not change. If the average interest rate goes up from five percent to eight percent, those with fixed interest rates keep paying five percent. In many ways, a fixed interest rate is perfect for people who do not like to gamble. It provides a safety net against difficult economic times, but can be a hindrance during good times as well.

Variable Interest Rates

Variable interest rates have the advantage of saving you money when the interest rates are low. The flip side is that this type of interest rate will cost you more when interest rates are high. When the Canadian dollar is doing well, there is a pressure on home prices that pushes them down, which then reduces the need of the Bank of Canada to raise interest rates. During these times, a variable interest rate is the best option. It needs to be noted that to have a variable interest rate, a homeowner needs to have a high enough level of income to ensure they can afford the interest rate going up. A few percentage points can be a big difference. Here is an example of why:

Mortgage:     $500,000

Term:      20 Years

Mortgage payment (5% Interest):  $3,285 approx

Mortgage payment (10% interest): $4,750 approx

Mortgage payment (15% interest): $6,400 approx

As we can see here, the mortgage payment is $3,285 when the interest rate is at five percent, but if it goes up by 10 and 15 percent, it increases the mortgage payments by roughly $1465 and $1650 each month. This may not seem like much, but if a person is already pushing the boundaries with a $3,285  payment, an increase of over thousand dollars can easily cause a foreclosure down the road.

Which to Choose?

The type of interest rate you choose depends on the type of person you are. If you think you will benefit from a variable interest rate and you can handle a changing mortgage payment, then you may choose the variable interest rate. However, if you are more conservative and you just want a steady mortgage payment, then a fixed mortgage rate may be the one for you.

How To Get The Best Mortgage Quotes?

Best Mortgage Rates

First Published: ADawnJournal.com November 23, 2009

Before you get a mortgage it is imperative to have a look around for the best deals. There are so many variables which come into the question when you are looking for the right deal, and it is possible to lose sight of something important when you see what appears to be an excellent deal. Taking that initial deal may work in your favour, but there is a possibility that you will be looking back in a few years’ time regretting your haste. In order to avoid this situation, it is advisable to get as many quotes as you can before proceeding with the one that looks best to you. It used to be the case that to get a mortgage sorted out would require trips to a number of banks to find out what their best offers were. Now, the whole process can be a lot quicker.

The Internet has been the most important innovation in this world in the last fifty years. It has enabled the speedy movement of information from place to place, meaning that wherever you are in the world, if you are near to a PC with an internet connection, or can get reception on a cell phone, you can lay your hands on information that once upon a time would have cost you a great deal of money and time. For financial services, the Internet has been an indispensable tool both for spenders and savers, as well as borrowers and lenders. Instead of hitting the high street to go into as many banks as you can bear, now shopping around can legitimately be done on a single website, if you know where to look.

It is genuinely the case that for anyone looking to find out information on the best mortgage for them, a visit to Google.com or Google.ca will give them just about all they need. Entering a search term such as “best mortgage” and then adding your home town will possibly give you a little bit of information about the best mortgages, but will also feed you a lot of sales talk. A better search term would be “quick mortgage calculator”. By entering the correct details in the available sections on screen, it is possible to find out not only how much you can reasonably borrow, but how long you may have to pay it back, as well as the level of interest you should expect to pay.

Many of these calculators are connected to independent comparison sites which will track down the deals which are closest to what you have searched for on the mortgage calculator. The more of these deals you check out, the better, because you may well find that some of them are not all that they seem. Comparison shopping – and then some negotiation if you feel up to it – could well be your guide to the mortgage you need and the house of your dreams. The more quotes you get, and the quicker you get them, the sooner you will be living in that house.