A predicted “avalanche of rate rises” from the RBA could see you paying an extra $3000 on top of your already stretched budget.

The increase is prescribed to lift Australia’s cash rate and quell the ever-climbing cost of living.  But it all sounds like a bit of a catch 22.

And it’s not just one rise.  It’s expected to be a spate of multiple increments, but experts are hesitant to say exactly when this will occur.  It’s likely to be later in the year and somewhat dependent on what’s going on with events overseas.  To get the ball rolling though, the first increase has already come into play.

 

The crux of it is – the Reserve Bank will always strive to keep inflation between 2-3%.  And this can be a delicate balancing act alongside things like maintaining low unemployment.

 

But the Aussie economy has gone gangbusters, and it’s kind of escalated out of control.  Demand is way higher than supply (for pretty much everything).  That means that all the prices have gone up too.  So, to counter this, the RBA has no choice but to stop people from borrowing and spending.  The economy simply needs to slow down to find an even keel.

 

This strategy may look like it’s going to hurt, but we’ll all be able to breathe easy in the long run.

 

Of course, it won’t do anyone any great favours until then.  Both house hunters and homeowners alike will face the extra burden of having to find more cash. And households, in general, will struggle to keep finances in check.

So, wouldn’t it be nice in times like these to have a passive income stream that operates outside the box?  A way to pay your mortgage and feed your family without looking over your shoulder?

If you’re interested in something like that, give us a call to find out about our unique investment strategy.