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Home And Contents Insurance: How Do You Know If You Have Enough?

This post is brought to you by Understand Insurance

Insurance is a funny product. It seems like a big fat waste of money until you need it. But when you need it, it then becomes invaluable. We bought our home six years ago. Like many people, our family home is by far our largest asset. However, our mortgage is by far our largest debt.

No-one wants to think about it, but what if something were to happen to our house? Without home and contents insurance we would be left with a small (and I mean teeny tiny) block of land in Sydney’s inner west and we would still be left to pay our mortgage. Yes, no couch to sit on, no TV to watch, no clothes to wear, no house to live in but our debt would still exist and the bank would still want its monthly repayment! For us it would […]

By |September 3rd, 2014|Insurance|38 Comments

Investment Basics: Risk and Return – The Money Mummy Guide to Investing Part 3

There is a trade off between risk and return.  Anyone who tells you any different is lying.  If I had a dollar, for every time a client told me about a no risk investment returning a guaranteed 20%, I would be on a beach somewhere, right now.  My advice is always the same, it is highly likely you are being scammed, run!

Remember risk is the chance that an investment won’t give you the return you expect.  It is the chance of losing some or even all of your investment.  Higher risk investments are generally associated with higher potential returns.  Low risk investments are generally associated with lower potential returns.  This is the risk/return trade off.  No one in their right mind would take on a high risk investment for a low potential return.    It makes no sense, the return you get at the end of the day does not compensate […]

By |May 2nd, 2013|Investing Basics, Risk|4 Comments

Investing Basics – Risk! The Money Mummy Guide To Investing – Part 2

Investing involves risk.  Each of us is unique, and understanding how much risk you can tolerate is fundamental to shaping your own investment strategy.  During the Global Financial Crisis, so many people forgot about or did not understand their own unique risk tolerance to their peril.  This is how we ended up with the travesty of Storm Financial convincing retirees, with no income, to borrow against their homes and invest into high risk investments on the stock market.  Different investments have different risk characteristics.  Understanding your risk tolerance, will help to decide which investments have the right fit for you.

So what is risk?  I define risk, in the investment sense, as the likelihood of losing money.  Be warned, strangely enough, many in my industry do not see it that way.  Fund Managers, people who invest your money in a range of investments on your behalf, often see risk as the risk of […]

By |April 24th, 2013|Investing Basics, Risk|2 Comments