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Five ways to take advantage of rising interest rates to boost your savings

<a href="https://theconversation.com/profiles/fredrick-kibon-changwony-234363">Fredrick Kibon Changwony</a>, <a href="https://theconversation.com/institutions/university-of-stirling-1697">University of Stirling</a> With the Bank of England base rate <a href="https://theconversation.com/how-the-bank-of-englands-interest-rate-hikes-are-filtering-through-to-your-finances-210344">currently the highest</a> it has been since early 2008, you may have a valuable opportunity to increase your earnings on pensions, investments and savings accounts. After all, when the central bank raises its main rate – the base rate, which is typically used as a benchmark for loans as well as savings accounts – it is trying to encourage people to spend less and save more. But UK banks and building societies have <a href="https://www.independent.co.uk/money/martin-lewis-savings-rates-mortgage-crisis-b2362955.html">recently been accused</a> of letting their savings rates lag the recent rapid rise in the base rate. UK regulator the Financial Conduct Authority has urged these financial firms to offer “<a href="https://www.fca.org.uk/news/press-releases/action-plan-cash-savings">fair and competitive</a>” savings rates in response to the increasing interest rates. Many financial institutions do offer accounts with <a href="https://www.theguardian.com/money/2023/jul/15/uk-savings-accounts-interest-nsi-building-societies-banks-deals">rates of 6% or more</a>. This is good news for avid savers – but only if you keep an eye on the market so you can switch from less competitive products. This is why it’s important to establish a regular savings habit, but many people are unsure about what that should involve. My colleagues and I have studied the <a href="https://dspace.stir.ac.uk/handle/1893/32240">correlation between people’s savings goals</a> (if they have any) and how they invest their money. We also looked at how seeking financial information advice, and being “good with numbers”, both influence this correlation. We analysed data from more than 40,000 individuals in 21,000 UK households from five waves of the Office for National Statistics Wealth and Assets Survey (WAS), conducted between 2006 and 2016. This data captures comprehensive economic wellbeing information and attitudes to financial planning. Our research shows the importance to your finances of setting multiple savings goals, keeping up with financial news, and seeking professional advice. Based on this, here are five research-based ways to make the most of your money. <h2>1. Set specific savings goals</h2> Establishing personal savings goals is one of the first steps most financial institutions and advisers will recommend to their customers, because it’s a good idea to <a href="https://www.investopedia.com/terms/c/compoundinterest.asp">save regularly</a>. Plus, our study shows that total financial assets increase in line with the number of savings goals you have, and that setting specific, rather than vague, goals leads to higher performance. Specific savings goals should have an end date, target figure, and even a meaningful name – for example, “£1,000 for 2024 trip to Asia” or “£250 for 2023 Christmas present fund”. This will create tangible reference points that encourage self-control and increase the pain you feel if you fail to meet your goal. <h2>2. Seek professional financial advice</h2> Rather than relying on friends, family and social media for financial advice, speak to an expert. Our research shows households that access professional financial advice were more likely to allocate a higher share of their wealth to stock portfolios than those that rely on friends, family and social media for financial advice. This result was consistent even across different wealth and income levels, with lower earners possibly using products like ISAs to make investments in stocks and shares. Other <a href="https://academic.oup.com/qje/article/134/3/1225/5435538">research shows</a> stock portfolios outperform most other types of investment in the long term. We also found that access to professional financial advice can substitute for setting goals, because your adviser should help you to determine the kinds of products to invest in (which is called asset allocation) for specific timelines and aims. <h2>3. Brush up on your maths</h2> <a href="https://doi.org/10.1111/j.1475-5890.2007.00052.x">Several studies</a> show numerical skills affect how households gather and process information, <a href="https://psycnet.apa.org/doi/10.1037/a0013114">set goals</a>, perceive risks, and <a href="https://heinonline.org/HOL/P?h=hein.journals/fedred89&i=791">decide to invest</a> in various financial assets. So, by brushing up on your basic numeracy and financial literacy skills – even with free online videos – you could boost your savings for the long term. Our study shows that individuals with high confidence in their numerical skills tend to have better financial planning habits – such as investing more in stocks and bonds than cash, which carries more risk but also the potential for greater returns. This trend is particularly evident among households with no savings goals, suggesting that numerical ability could compensate for failing to set such goals. <h2>4. Adopt appropriate savings strategies</h2> Diversified stock market portfolios generally outperform bonds and cash savings <a href="https://doi.org/10.1093/qje/qjz012">over longer periods</a>. However, stock markets can be volatile, so putting savings into less risky assets like bonds and cash is wise for savings goals of less than five years. In the longer term, investing across different global stock markets for more than five years can help counteract inflation. And you can access low-cost, diversified investment portfolios via financial products based on indices of stocks or other assets, such as exchange traded funds. <h2>5. Set, monitor and adjust your plan</h2> Free financial planning and budgeting apps can help you save money by tracking your spending and savings goals, and encouraging you to adhere to a budget. Most importantly, once you set savings goals and create a budget, don’t forget about them. Check regularly to see how your savings are building up and to monitor for any spending changes. A growing array of fintech tools can prompt and encourage this kind of long-term planning. Keeping an eye on savings rates is also important. As banks change rates or create new accounts, consider switching to get a better deal if you can do so without falling foul of account closure fees. It’s important to make sure your savings are working for you at any time, but its crucial in the current economy, when finances are tight but interest rates are rising.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/208853/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/fredrick-kibon-changwony-234363">Fredrick Kibon Changwony</a>, Lecturer in Accounting & Finance, <a href="https://theconversation.com/institutions/university-of-stirling-1697">University of Stirling</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/five-ways-to-take-advantage-of-rising-interest-rates-to-boost-your-savings-208853">original article</a>.

Money & Banking

Why you’re probably paying more interest on your mortgage than you think

<a href="https://theconversation.com/profiles/sander-de-groote-1472267">Sander De Groote</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> and <a href="https://theconversation.com/profiles/kevin-li-892606">Kevin Li</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> For most things we buy, the price we are quoted is the price we pay. That’s supposed to be the case even where taxes and fees are involved. Australian law requires anyone selling anything to display a <a href="https://www.accc.gov.au/business/pricing/price-displays">total price</a> that includes all “taxes, duties and all unavoidable or pre-selected extra fees”. But our investigations, which compare the interest rate quoted on our mortgages with the fine print in our own mortgage documents, shows this is hardly ever the case for home loans. Even though we are both trained as accountants, until recently we hadn’t bothered to check – even as interest rates climbed. We assumed the rates we were being told we were being charged (say 5% per year) were the rates we were actually paying. This would be easy enough, and in our view the right thing, for banks to do. <h2>The price quoted usually isn’t the price paid</h2> Mortgage interest is usually charged monthly, but the rates are yearly. This means that each time interest is charged, the outstanding amount <a href="https://www.investopedia.com/terms/c/compoundinterest.asp">compounds</a> as interest is applied to interest. That sounds bad enough. But this isn’t our main complaint. It’s that there are two possible ways to calculate the amount of interest. Banks calcualte interest on a daily basis. The most reasonable would be to calculate the daily amount in a way that adds up to an annual amount that matches what was quoted. That way, a 5% rate would really be 5%. Although there’s a bit of <a href="https://cdn.theconversation.com/static_files/files/2814/compound_example.pdf">calculation</a> involved, it’s easy enough for banks to do. <h2>How banks calculate mortgage interest</h2> The other, arguably less reasonable, way is what’s called the “<a href="https://www.investopedia.com/articles/investing/020614/learn-simple-and-compound-interest.asp">simple</a>” method. Our investigations show that this technique is used by all the big four banks, and probably many others too. It’s called the simple method because it involves simply dividing the annual rate (say 5%) by 365 to determine the daily rate. This seems to not be important, but because of compounding it means the amount charged over a year is more than the rate quoted. Say you borrow $100,000 for one year at an annual rate of 5%, repaying the whole amount at the end of the year. You might expect to pay back $105,000. Instead, the banks’ method of calculating interest results in a total repayment of $105,116. This is because the daily interest rate (5% divided by 365) is applied to the outstanding balance each day and added to your balance once a month. These regular increases mean your interest compounds costing you more. <h2>Over decades, the difference matters</h2> In July 2023, the average size of a new mortgage in New South Wales was about A$750,000, with an average interest rate of about 5.95%. The method of calculation used by the banks and in the fine print of their mortgage contracts requires a monthly payment of $4,473 including the repayment of the amount originally borrowed over the life of a 30-year loan. But if 5.95% were actually charged each year, the monthly payment would be $4,398 – a difference of $900 per year. In this typical example, the difference over the life of the loan amounts to about $27,000. It means these borrowers will end up paying an effective interest rate of 6.11%. <h2>We had to read the fine print</h2> We checked the terms and conditions of each of the big four banks – Westpac, the Commonwealth, the National Australia Bank and the ANZ – as well as their biggest subsidiaries which include St George, The Bank of Melbourne, Bank SA and Bankwest. They all charge interest using the “simple” method. Mutual banks – the old credit unions and building societies owned by their members – have different reporting requirements, and we were unable to check the terms and conditions used by each one. But where we could, we found they used the same method as the big four. You can find this small print yourself, usually in the middle of your mortgage document. It’s a formula, accompanied by a paragraph of explanation. But you have to look carefully. Or you could call customer service, as we did, and ask the bank to explain the calculation. You shouldn’t have to. <h2>The price quoted ought to be the price paid</h2> We think the price quoted for a product should be the price that’s actually charged, as the law <a href="https://www.accc.gov.au/business/pricing/price-displays">generally requires</a> for products other than mortgages. This means if you are told you’ll be charged 5.95% interest per year, you should pay 5.95% per year – not 6.11% because of a quirk in the formula. Mortgages are a larger financial commitment than most purchases. This means that honesty and clear communication are even more important. It’s worth knowing what you are letting yourself in for when signing up for a mortgage. That way, when the bank or broker explains it to you and it’s not what was advertised, you can ask for a discount.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/213862/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/sander-de-groote-1472267">Sander De Groote</a>, Lecturer, School of Accounting, Auditing and Taxation, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> and <a href="https://theconversation.com/profiles/kevin-li-892606">Kevin Li</a>, Senior Lecturer, School of Accounting, Auditing and Taxation, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-youre-probably-paying-more-interest-on-your-mortgage-than-you-think-213862">original article</a>.

Money & Banking

RBA announces major interest rate rise

The Reserve Bank of Australia has lifted its official interest rate to 4.1 per cent, an increase not seen since early 2012. The bank’s board chose to lift the cash rate target by 0.25 of a percentage point for the second month in a row amid concerns that inflation is taking too long to decrease. The latest monthly consumer price index from the Australian Bureau of Statistics saw prices rise 6.8 per cent from 2022 to April 2023, up from the March reading due to statistical uncertainties caused by last year’s temporary fuel excise cut. Reserve Bank governor Phillip Lowe warned the public about rising costs of services including hospitality which are labour intensive and vulnerable to increased wages. "Recent data indicate that the upside risks to the inflation outlook have increased and the board has responded to this," he highlighted in his post-meeting statement. "While goods price inflation is slowing, services price inflation is still very high and is proving to be very persistent overseas. Unit labour costs are also rising briskly, with productivity growth remaining subdued.” Lowe noted the most recent and bigger than expected rise in minimum and award wages, which was the highest increase in decades. "Wages growth has picked up in response to the tight labour market and high inflation," he explained. "At the aggregate level, wages growth is still consistent with the inflation target, provided that productivity growth picks up.” The interest rate spike will add around $76 a month to the repayments on a $500,000 loan, and double that on a million-dollar 25-year mortgage. Someone with $500,000 owing on their home loan will see their monthly repayment increase by around $1,134 a month since the RBA started lifting rates from a record low of 0.1 per cent in May 2022. However, there is still the risk of another rate rise. "Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable time frame, but that will depend upon how the economy and inflation evolve," Lowe warned. Image credit: Twitter

Money & Banking

5 interesting facts about how we hear

The cochlea is the most complex part of the ear, responsible for turning sounds waves into what we perceive as “hearing”. Here are five more facts about this amazing organ. 1. The cochlea turns sounds into “hearing” The cochlea receives sounds in the form of vibrations and converts them into nerve impulses. These impulses are sent to the brain to be translated into sounds that we recognise and understand. 2. The cochlea is the size of a pea Located in the inner ear, the cochlea looks like a snail shell (cochlea is Greek for snail) and is only the size of a pea. Yet within the small pea is everything needed to turn sound vibrations into hearing. 3. There are over 20,000 nerve cells in the cochlea There are approximately 24,000 hair fibres in the cochlea, which are essential to hearing. If these hair cells become damaged, hearing impairment occurs. 4. Cochlear implants directly stimulate auditory nerve A cochlear implant bypasses damaged hair cells in the cochlear to provide direct stimulation to the auditory nerve. 5. The cochlea can’t heal The cochlea cannot heal so damage done to your ear when younger can affect you later in life. It can be damaged by immune reactions, disease, drugs, chemicals, toxins, loud sounds, physical impact and ageing. Image credits: Getty Images

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I’m considering an interest-only home loan. What do I need to know?

An <a href="https://moneysmart.gov.au/home-loans/interest-only-home-loans" target="_blank" rel="noopener">interest-only home loan</a>, as the name suggests, is where you only pay the interest on a loan and not the principal (the original amount you borrowed). While authorities such as the Reserve Bank often <a href="https://www.rba.gov.au/speeches/2018/sp-ag-2018-04-24.html" target="_blank" rel="noopener">see</a> them as risky, interest-only loans can be helpful in some circumstances. If you’re considering an interest-only loan, here’s what you need to know. How long do they go for? These loans are typically last for five years at most, before reverting back to principal and interest (where you have to pay back, through regular payments, both interest and the initial sum you borrowed). You could potentially apply for another interest-only loan after your first one winds up, perhaps by refinancing (where you take a new mortgage to repay an existing loan). But you might not get it – and you’d still have to pay off the principal eventually. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/480309/original/file-20220822-18038-nyikjs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="" /></a><figcaption>Interest-only loans can cost you a lot more in interest over time than a regular principal and interest loan. Photo by Andrew Mead on Unsplash, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank" rel="noopener">CC BY</a></figcaption></figure> What are the upsides of an interest-only loan? An interest-only loan means you’ll have more cash available to cover other costs, or invest elsewhere. You can use a <a href="https://moneysmart.gov.au/home-loans/mortgage-calculator" target="_blank" rel="noopener">mortgage calculator</a> to work out how much extra cash you’d have if you switched from a principal and interest loan to an interest-only loan. It’s typically hundreds of dollars per week. This may get you a bit more wriggle room for daily expenses. Or, some people use the extra cash to invest in other things – such as shares – in the hope they can make more money overall and pick up some tax benefits along the way. That’s why interest-only loans are often popular among <a href="https://moneysmart.gov.au/home-loans/interest-only-home-loans" target="_blank" rel="noopener">investors</a>. Of course, this strategy comes with risk. An interest-only loan may also have a redraw facility, allowing you to add extra payments into the loan (above and beyond the interest) if you want, and withdraw money later when you need cash. This can allow people to avoid a personal loan, which usually has a much higher interest rate. Regular principal and interest loans may also have a redraw facility but the regular payments of principal are unavailable for redraw. That means less flexibility for the borrower. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/480311/original/file-20220822-64666-y67vz3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" alt="" /></a><figcaption>What’s right for one borrower won’t be for the next. Image by Pfüderi from Pixabay, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank" rel="noopener">CC BY</a></figcaption></figure> What are the downsides? The interest rates on interest-only loans are generally higher than principal and interest loans. For example, the RBA July 2022 <a href="https://www.rba.gov.au/statistics/tables/xls/f05hist.xls" target="_blank" rel="noopener">indicator rate</a> for owner-occupier interest-only rates is 6.31%. But the equivalent variable rate for principal and interest loans is 5.77% (the indicator rate is just a guide; the actual difference varies from bank to bank). Interest-only loans can cost you a lot more over time than a regular principal and interest loan. This means a borrower needs to manage their finances well to ensure they can cover the interest payments now and still have enough to pay down the principal eventually. So you’ll need a plan for how you’re going to do that when the interest-only loan ends. There is also a risk of a shock – such as job loss, personal crisis or housing crash – causing the borrower to default on the loan altogether. If the borrower defaults on an interest-only loan, they may lose the house and the bank is left with a debt that was not substantially repaid (because the borrower had not yet made a dent in the principal). It’s a lose-lose situation. Are interest-only loans common? Interest-only loans represent <a href="https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-authorised-deposit-taking-institution-statistics-11" target="_blank" rel="noopener">11.3% of all home loans</a> in Australia. This figure has been <a href="https://www.rba.gov.au/publications/fsr/2017/apr/box-b.html" target="_blank" rel="noopener">trending down</a> over the past five years, due in part to tighter <a href="https://www.apra.gov.au/news-and-publications/apra-to-remove-interest-only-benchmark-for-residential-mortgage-lending" target="_blank" rel="noopener">lending restrictions</a> and the fact low interest rates have made principal and interest loans relatively cheap recently. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/480312/original/file-20220822-65738-za6ht2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" alt="" /></a><figcaption>Interest-only loans represent 11.3% of all home loans in Australia. Image by sandid from Pixabay, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank" rel="noopener">CC BY</a></figcaption></figure> What does the research say? One Dutch <a href="https://link.springer.com/article/10.1007/s11146-013-9453-9" target="_blank" rel="noopener">study</a> found “households that are more risk-averse and less literate are significantly less likely to choose an interest-only mortgage”. This partly due to lower initial repayments and wealthy households preferring the financial flexibility. Interest-only borrowing has also been found to <a href="https://www.sciencedirect.com/journal/journal-of-housing-economics" target="_blank" rel="noopener">fuel</a> <a href="https://doi.org/10.1016/j.regsciurbeco.2018.06.004" target="_blank" rel="noopener">housing</a> <a href="https://www.sciencedirect.com/science/article/pii/S1094202520300776?via%3Dihub" target="_blank" rel="noopener">speculation</a> and reduce housing affordability. A US study found borrowers also tend to <a href="https://doi.org/10.1093/rof/rfy016" target="_blank" rel="noopener">default</a> more. A Danish <a href="https://doi.org/10.1162/rest_a_01146" target="_blank" rel="noopener">study</a> found that once the interest-only lower repayment period is over and the loan reverts to principal and interest, those who didn’t make principal repayments suffered a large drop in disposable income. Financial flexibility comes with a catch With rates rising, interest-only loans may sound like an appealing way to have more cash available to cover other costs in life. But just remember financial flexibility comes with a catch. An interest-only loan could be more expensive in the long run. For some people, that cost will be worth it if it allows them to hold onto the house during a brief tough period or make more money investing elsewhere. But it’s a risk. And when the interest-only loan ends, you’re still stuck with the task of paying off the money you borrowed from the bank in the first place (with interest).<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/188817/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/adrian-lee-94688" target="_blank" rel="noopener">Adrian Lee</a>, Associate Professor in Property and Real Estate, <a href="https://theconversation.com/institutions/deakin-university-757" target="_blank" rel="noopener">Deakin University</a> This article is republished from <a href="https://theconversation.com" target="_blank" rel="noopener">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/im-considering-an-interest-only-home-loan-what-do-i-need-to-know-188817" target="_blank" rel="noopener">original article</a>. Image: Getty Images

Money & Banking

Cute-as-a-button mushroom house captivates buyers

A quirky “Mushroom House” has popped on the market in Michigan, USA. A home owner in the United States has taken their love for the humble vegetable to a whole new level, with the seven-bedroom property expected to sell for a cool $US4.5 million ($6.4 million). The unique abode covers 6,000 square-feet and is referred to as “The Thatch House” due to its signature roof. American architect Earl Young designed the original seven-bathroom home back in 1918. He was known to source stone for his multiple properties throughout Northern Michigan. However, the new owner dreamed up a new aesthetic, drawing a thatched roof onto a napkin. The design concept took nearly two years to come to fruition and saw thatch being imported in from Europe. The interiors reflect Young’s original aesthetic with stone fireplaces and staircases, along with the timber joinery and benchtops in the living areas, kitchen and bathrooms. The timber floorboards are a rich chocolate tone, along with the new owner’s choice of plush textiles in bold hues, provides a warm and inviting feel to the estate. Images: Domain

Real Estate

RBA increases interest rates again

The Reserve Bank of Australia has increased interest rates by 0.5 per cent for the third month in a row. Interest rates are now 1.35 per cent with treasurer Jim Chalmers saying that inflation will only “get worse before it gets better”. "That's the brutal reality, unfortunately," he said. "A lot of people that I talk to around Australia are facing that same diabolical set of circumstances, where prices for everything are going up, people's wages aren't keeping up, it's harder and harder for small businesses to operate. "The government is doing what it can but really the only solution to this in the medium term is to try and build a budget and an economy which is as resilient as the Australian people themselves, and that's what we're working on." Mr Chalmers said it's expected that the interest rate will continue to go up and this will put a lot of pressure on people with mortgages. “Mortgage repayments are now eating up a bigger part of already stretched budgets,” he said. “Average homeowners owing $330,000 will now have to find another $90 a month at the same time as they try to keep up with the costs of petrol, electricity, groceries and other essentials.” RBA Governor Philip Lowe says Australians should expect further hikes to help with inflation. “Global inflation is high. It is being boosted by COVID-related disruptions to supply chains, the war in Ukraine and strong demand which is putting pressure on productive capacity,” he said. “Monetary policy globally is responding to this higher inflation, although it will be some time yet before inflation returns to target in most countries.” Images: Shutterstock

Money & Banking

Massive house price slowdown as interest rate climbs

After experiencing near-record high prices during the pandemic, the cost of a house in Australia’s capital cities is experiencing its biggest slowdown since 1989, according to new data. The slowdown in price growth over the past six months is worse than the stagnation and turbulence the housing market experienced in 2004 and 2008’s Global Financial Crisis. According to new analysis from PropTrack, the annual rate of home price growth in capital cities has dropped from January’s rate of 24 percent, to 14 percent. PropTrack has reported that Sydney prices have slowed at the fastest rate since 1989, Melbourne’s is the slowest since 2010 and Brisbane’s since 2008. Economist Paul Ryan told <a href="https://www.9news.com.au/national/australia-capital-city-home-prices-slow-down-slow-at-most-rapid-pace-in-more-than-30-years/e7d7b5cc-965d-480c-9b7f-20a6a9ef862d" target="_blank" rel="noopener">9News</a> the slowdown was “not surprising”, blaming recent interest rate rises and predicting it would continue due to additional rises expected over the rest of the year. “Looking ahead, the rapid slowdown in price growth signals the housing market is likely to continue to see slow growth over the rest of 2022,” he said. He added that buyers may be hesitant with the high level of uncertainty around the cost of mortgage repayments. “Resolving this uncertainty about the path of interest rates will be the key element buyers look for over the rest of the year,” he continued. Though it is normal for prices to decline after a period of growth, Ryan said this sudden six-month deceleration was of potential concern. “It’s not necessarily the case that growth falls rapidly after a run-up,” he said. “In general, the market moves more gradually, indicating there are other factors involved.” It comes after the Reserve Bank lifted the nation’s interest rates by 0.5 percent on Tuesday, making it the second month in a row with an increase. Image: Getty Images

Real Estate

"No interest in justice!" Andrew O'Keefe's courtroom explosion

Disgraced TV host Andrew O'Keefe has screamed at a magistrate in his latest court appearance, claiming he had “no interest in justice” and was threatened with contempt of court after he was again denied bail. As O'Keefe fronted Sydney’s Central Local Court on Wednesday afternoon, he appeared visibly distressed and frustrated. The 50-year-old was hit with six charges in January after police alleged that he grabbed a woman by the throat, punched her and pushed her to the ground, to which he pled not guilty to all charges. Mr O’Keefe has been remanded in custody since his arrest and lost his last bid for bail in the NSW Supreme Court in March. Defence lawyer Sharon Ramsden presented a fresh application for bail on Wednesday, in which she argued that more evidence had been served on Mr O’Keefe that outlined the “lack of injury” on the complainant. Over the bail hearing that lasted almost two-hours, Mr O’Keefe was audibly frustrated over what was being said in court. A prosecutor opposed the bail application and said there was “no new information” to warrant the request, “There’s not fresh circumstances in what has been put before the court … he has been in rehab nine times,” he said. Mr O’Keefe spoke over the prosecutor to deny the allegations as magistrate Daniel Reiss warned him he would be “going backwards by speaking up”. “That’s simply not true Your Honour,” Mr O’Keefe said, raising his voice. “I’m just getting the truth out there.” Mr O’Keefe continued to interrupt and shake his head in frustration as magistrate Daniel Reiss told the court of the 50-year-old’s mental health and drug issues. The magistrate warned that Mr O’Keefe was bordering on being in contempt of court. “I’ve dealt with many defendants, some are psychotic and are not as hard to deal with as you. Someone with legal qualifications and 10 warnings should know how to deal with it,” Mr Reiss said. Mr Reiss denied bail, saying he was not willing to allow the “unacceptable risk” of letting Mr O’Keefe leave custody. Mr O’Keefe gathered his papers and stood up before saying, “The transcript will say I was not arguing, I was trying to help you Your Honour.” “You have no interest in justice,” Mr O’Keefe continued before storming out. Mr O’Keefe will return to court for a hearing in June. Image credits: A Current Affair

News

5 ways you can use your home to overcome low interest rates

While record low interest rates may be great news for home buyers, they are generally horrible news for Australian retirees who rely on their savings income. The good news is that the family home - whether it is owned or rented - does provide a number of significant opportunities to generate income for retirees in a low interest rate environment. We’ve outlined five ways this could be the case: 1. Downsizing from the home Just over half of the 40 people who responded to a <a href="https://www.facebook.com/downsizing.com.au/">poll on our Facebook page</a>, stated they were considering downsizing from the family home, so they can release home equity to boost their retirement savings, because of low interest rates. Fortunately, it is these very same low interest rates that are also making it easier for downsizers to sell the home, because they are <a href="https://www.smh.com.au/business/the-economy/bubble-fears-are-back-property-prices-threatening-to-get-out-of-control-20191001-p52wia.html">breathing life into the property market.</a> As we have reported previously, the Australian Government has a downsizing superannuation incentive. Australians aged over 65 are using this incentive to boost their super by, on average, around $200,000. Using the incentive, a 65-year-old adding $220,000 to their super would be able to draw an additional tax-free income of $15,000 per year until age 88 - a pretty handy amount when interest rates are as rubbish as they currently are. <a href="https://www.downsizing.com.au/news/602/How-much-money-you-can-make-from-downsizing">Find out more about the government’s incentive here</a>. Downsizing has a number of benefits, including allowing people to move into alternative, age-appropriate accommodation, often located within a supportive community. Downsizing from the family home however may come with costs, in particular stamp duty on the new home and agent’s costs when selling the old home. The stamp duty impost can usually be avoided however by moving into a lease or licence retirement village unit or a land lease community. In addition, downsizers need to consider the fact that the released equity does count towards the pension assets and income tests, which could impact on eligibility for a part or full pension. 2. Unlocking the equity in the home There are both commercial and government ‘reverse mortgage’ schemes in place to help retirees to unlock the equity in their home, while still living in the home. The government’s expanded <a href="https://www.humanservices.gov.au/individuals/services/centrelink/pension-loans-scheme/who-can-get-it">Pensions Loans Scheme</a>, came into effect on 1 July 2019 and allows retirees to access a fortnightly amount representing 150 per cent of the maximum pension payment, via a government loan secured against their home. A 5.25 per cent interest rate will apply to the loan, which will need to be paid back to the government when the home is eventually sold. However, <a href="https://www.downsizing.com.au/news/573/Why-seniors-need-to-think-carefully-before-leaping-into-the-Pension-Loans-Scheme">as outlined in this story</a>, there are downsides to this scheme. One of the biggest downsides is that it encourages elderly people to stay in their existing home, when this home may not have the necessary ageing-in-place safety features that a newer home may have. It could also lead to loneliness, as older people are left isolated in their home. 3. Working from home OK - this is a bit of a controversial one... but stay with us. There is clear evidence that an increasing percentage of older Australians are staying in, or re-entering the workforce, because they either need the money or the mental stimulation. In August 2019, around 15 per cent of Australians over 65 were still working part-time or full-time, up from 10 per cent in August 2009 and just 5.4 per cent in August 1999. Part-time work is the most popular option for Australians aged over 65 (compared to the 1990s when there were more elderly Australians in full-time work). In July 2019, there were 345,000 Australians aged over 65 undertaking part-time work, compared to 256,300 in full-time work. <div><img src="https://img.seniorshousingonline.com.au/50b860f80fa8f41d56d22b98bba15a203a26c5f8" alt="" width="800" height="475" />Chart showing increasing number of Australians over 65 still working</div> These seniors are no doubt taking advantage of a number of tax incentives to supplement their retirement or pension income. For instance, the Australian Government’s Age Pension <a href="https://www.dss.gov.au/seniors/programmes-services/work-bonus">Work Bonus</a> increases the amount an eligible pensioner can earn from work before it affects their pension rate. From 1 July 2019, the amount fortnightly income from work that is not assessed and is not counted under the pension income test, increased from $250 to $300. Meanwhile, the <a href="https://www.superguide.com.au/smsfs/no-tax-retirement-sapto">Seniors and Pensioners Tax Offset</a> (SAPTO) allows Australians over 65 to take advantage of a $2,230 tax offset for annual incomes up to $32,279 (in 2017/18) and then a lower offset amount which extinguishes at an income level of $50,119. These helpful tax breaks mean that seniors may be able to undertake part-time work at home, to overcome the low interest rates, but at the same time minimise their tax burden and keep access to the pension. 4. Move to a rental community There are potential benefits in moving to a rental community, including the possibility that you can claim <a href="https://www.humanservices.gov.au/individuals/services/centrelink/rent-assistance">Commonwealth Rental Assistance</a> and also don't have to pay stamp duty to move in. For instance, an increasing number of Australians are deciding to move to senior-specific rental communities in regional areas, where the living costs are lower. Often, the rents in these villages are low enough to allow pensioners to be able to pay for both their accommodation and other living expenses. This means you may no longer be need to be reliant on savings income, in a low interest rate environment. The downside, of course, is that senior Australians may not want to have to move some distance to get into a village. This story explains more about the <a href="https://www.downsizing.com.au/news/543/Are-rental-villages-a-solution-for-Australias-pension-problem">increasing popularity of rental villages</a>. Other forms of seniors rental housing includes land lease communities (where you own the dwelling and rent the land underneath it) and leasehold retirement villages. 5. Use your garage for a profitable hobby A number of land lease communities are now offering <a href="https://www.downsizing.com.au/news/530/Homes-with-a-dream-garage-how-grey-nomads-are-transforming-retirement-communities">super-sized garages</a>, which can be used for any number of potentially profitable hobbies, including arts and crafts, collectables or your unique brand of home-made food. Of course, the danger is that you'll end up spending more money on your hobby, than you ever get back at the markets or online! Written by Mark Skelsey. Republished with permission of <a rel="noopener" href="https://www.downsizing.com.au/news/606/Five-ways-you-can-use-your-home-to-overcome-low-interest-rates" target="_blank">Downsizing.com.au</a>.

Retirement Income

11 of the longest bridges in the world - not including the Harbour Bridge

Human feats of wonder While most of the longest bridges in the world exist in Asia and the United States, engineering marvels that allow travellers to pass over large bodies of water and/or kilometres of tricky terrain, on a train or in a car, exist across the globe. The Danyang-Kunshan Grand Bridge <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/B0k3Ik2gU9k/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/B0k3Ik2gU9k/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by PlayDay Live! (@playdaylive)</a> on Jul 31, 2019 at 2:23am PDT </div> </blockquote> At 164.8km in length, China’s Danyang-Kunshan Grand Bridge is the world’s longest bridge. Built at a cost of approximately $8.5 billion dollars, per Britannica, this link between Shanghai and Nanjing opened as a viaduct on the Beijing-Shanghai High-Speed Railway in June 2011. As of publication, this bridge remains in the Guinness Book of World Records as the longest bridge in the world. Zhangjiajie Glass Bridge <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/Bzc35aXoB0u/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/Bzc35aXoB0u/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by MyExpatCommunity (@myexpatcommunity)</a> on Jul 3, 2019 at 3:24am PDT </div> </blockquote> Also in China is the longest bridge in the world made of glass where pedestrians pay high prices for what Business Insider calls a “colossal waste of time.” That’s thanks to a sea of people and their shoes which scuff the glass beneath feet, despite the fact that booties are mandatory to, in theory, protect the 99 panels of 60cm thick glass. Tourists flock to walk the 427m long glass bridge that sits 299m above China’s Grand Canyon. Hong Kong Zhuhai Macao Bridge <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/Bp2EgdvhGgd/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/Bp2EgdvhGgd/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by L U (@voyconlu)</a> on Nov 6, 2018 at 8:06am PST </div> </blockquote> =What does $20 billion get you in the 21st-century bridge market? A huge 54.7km bridge connecting Hong Kong and Zhuhai/Macau. Commuting between those cities would previously have required an hour-long ferry ride, according to CNN. The newest world’s largest sea-crossing bridge, with immigration offices and border control at either end (because Hong Kong and Macau are governed under different laws), took nine years to build and opened in the autumn of 2018. Lake Pontchartrain Causeway <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/BBD35ejPsLZ/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/BBD35ejPsLZ/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by Fisk - Centro de Ensino (@fiskoficial)</a> on Jan 27, 2016 at 3:13pm PST </div> </blockquote> Per the Telegraph, “Lake Pontchartrain Causeway in southern Louisiana is an epic structure that crosses one of the most famous bodies of water in the United States; a lake that has inspired literature, music and film.” This nearly 39km-long bridge is the longest bridge in the world that’s not in Asia. It’ll cost you $5 to go southbound on the Lake Pontchartrain Causeway. The Vasco da Gama Bridge The longest bridge in Europe, found east of Lisbon, Portugal, took more than 3,000 workers 18 months to build. Heavy cloud cover on its inauguration day during the 1998 Lisbon World Exposition meant that travellers couldn’t see the other side. Spanning an impressive 17km over the Tagus River, “the Vasco da Game was named after the famous Portuguese explorer to commemorate the fifth centenary of his arrival from India in 1498. Gama was the first European to reach India by sea, from the Atlantic Ocean,” reports Civitatis’ Lisbon travel guide. Charles Kuonen Suspension Bridge, Switzerland In Switzerland, you’ll find a 494m suspension bridge that is the longest bridge in the world exclusively for pedestrian use. According to the Telegraph, the Charles Kuonen Suspension Bridge crosses “a valley between Grächen and Zermatt, and offers scenic views of some of Switzerland’s highest peaks, including the famed Matterhorn.” Millau Viaduct, France At 2460m, the Millau Viaduct is not even close to being one of the longest bridges in the world. Instead, this engineering marvel often seen cutting through the clouds on the A75 highway between Paris and Barcelona is the tallest bridge and, remarkably, is even higher than the Eiffel Tower. Chesapeake Bay Bridge-Tunnel Part bridge, part tunnel, this 28.3-mile marvel of engineering opened for automotive traffic way back in 1964. By the following year, it had been designated as “One of Seven Engineering Wonders of the Modern World,” according to Travel Trivia. The site goes on to explain that the Chesapeake Bay Bridge-Tunnel “connects the Delmarva Peninsula with southeastern Virginia, spanning across open waters around the Chesapeake Bay and the Atlantic Ocean.” Atchafalaya Basin Bridge The twin bridge that spans the largest river swamp in the country opened in 1973 and at the time “was the longest bridge in the United States,” reports the Advertiser. Drivers and passengers alike are afforded stellar views of Louisiana’s wetlands from Interstate 10 during the 30km stretch. Bang Na to Bangpakong Expressway Is a bridge still a bridge if it doesn’t cross over water? The six lanes of The Bang Na in Thailand span a whopping 53.9km, including a run through Bangkok, with only a relative drop of the Bang Pakong River flowing beneath. Structurally this bridge, which ranks as the longest road bridge in the world, was made with over a million cubic metres of concrete, according to Road Traffic Technology, and instead of a sea or lake, rises nearly 30.4 metres above another stretch of road, National Highway Route 34. Akashi Kaikyo Bridge Rising high above the Akashi Strait, and connecting the city of Kobe with Awaji Island in Japan’s Hyogo Prefecture, is the longest spanning suspension bridge in the world. At 3,911m in length, its length is only part of the story. According to PBS, the two towers of the Akashi Kaikyo Bridge, rising 283m, “are higher than any other bridge towers in the world.” Written by Jeff Bogle. This article first appeared in <a href="https://www.readersdigest.com.au/travel/destinations/11-of-the-longest-bridges-in-the-world?slide=all">Reader’s Digest.</a> For more of what you love from the world’s best-loved magazine, <a href="http://readersdigest.innovations.com.au/c/readersdigestemailsubscribe?utm_source=over60&utm_medium=articles&utm_campaign=RDSUB&keycode=WRA87V">here’s our best subscription offer.</a>

Travel Tips

Rhonda Burchmore reveals Richard Wilkins’ interest in Hollywood actress

Richard “Dickie” Wilkins was reportedly “sniffing around” for the affections of a big Hollywood star while she was filming a movie in Australia, it has been revealed on I’m A Celebrity. Aussie entertainer Rhonda Burchmore told campmates that she became good friends with model Brooke Shield’s during her time in Sydney for a filming of a movie. While Burchmore didn’t reveal the title on the movie, Shields work on the 1994 film The Seventh Floor in the bustling city. “When I was doing a show called Hot Shoe Shuffle in Sydney I got a knock on my stage door saying ‘Brooke Shields is at the door’,” said Burchmore. “She came back to find out where I got my jeans from and (asked) would I go shopping with her, because we’re the same height. “So Brooke and I, we became really close when she was in Australia.” The 59-year-old then revealed that the two spent time together on a daily basis, and one night, Shields received a call from the late Michael Jackson. <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/B631DlFDw2O/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/B631DlFDw2O/?utm_source=ig_embed&utm_campaign=loading" target="_blank">A post shared by ✨ᴍɪᴄʜᴀᴇʟ ᴊᴀᴄᴋsᴏɴ✨ (@thrillerwall)</a> on Jan 3, 2020 at 1:18pm PST </div> </blockquote> “We were out one night and she got a phone call and she went ‘oh no’, and her face … it was Michael Jackson,” said Burchmore. “Because Michael tried to date her, and he wanted to marry her. Michael wanted an arranged marriage.” TV host Tom Williams then chimed in, saying that Australian men “must have been going crazy for her”. Burchmore then dropped Dickie’s name. “Well Richard Wilkins … he was, as soon as he knew that I was (close) with Brooke he was sniffing around”. At the time, gossip columnists reported that the pair went on a few dates, before Shields began dating US tennis star Andre Agassi.

Beauty & Style

5 science facts you never learned in school

The world has many strange but amazing true facts making it a really marvellous and mysterious place. The human stomach can dissolve razor blades On the rare occasion that you swallow a razor blade, don’t fret. The human body is more capable than you think. Acids are ranked on a scale from 0 to 14 – the lower the pH level, the stronger the acid. Human stomach acid is typically 1.0 to 2.0, meaning that it has an impeccably strong pH. In a study, scientists found that the “thickened back of a single-edged blade” dissolved after two hours of immersion in stomach acid. A laser can get trapped in water Yes, really. A cool thing called total internal reflection is applied when pointing a laser beam through a container of water. When light travels through water, it’s slowed by the heavier particles in water, as described here. Thus, the laser beam effectively gets “trapped” in the water. Earth’s oxygen is produced by the ocean Ever stopped to think where oxygen comes from? Your first thought may be a rainforest, but marine organisms take the bait. Plankton, seaweed and other photosynthesisers produce over half of the world’s oxygen. Animals use Earth’s magnetic field for orientation Lost land animals may not be able to find their way home, but sea animals might. According to the U.S. Geological Survey (USGS), “there is evidence that some animals, like sea turtles and salmon, have the ability to sense the Earth’s magnetic field and to use this sense for navigation.” A cloud can weigh over a million pounds Your childhood dreams of floating on a weightless cloud may get rained on with this fact: the average cumulus cloud can weigh up to a million pounds. A million pounds! That’s about as heavy as the world’s largest passenger jet. Written by Claire Nowak. This article first appeared in <a href="https://www.readersdigest.com.au/true-stories-lifestyle/science-technology/25-science-facts-you-never-learned-in-school?slide=all">Reader’s Digest</a>. For more of what you love from the world’s best-loved magazine, <a href="http://readersdigest.innovations.com.au/c/readersdigestemailsubscribe?utm_source=over60&utm_medium=articles&utm_campaign=RDSUB&keycode=WRA87V">here’s our best subscription offer.</a> <img style="width: 100px !important; height: 100px !important;" src="https://oversixtydev.blob.core.windows.net/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" />

Retirement Life

A perfect lunch: Tuna and broccoli pies

Canned tuna is a good source of omega-3 fats and tastes terrific in these easy filo-topped pies. Recipe reproduced with permission. © 2015 National Heart Foundation of Australia. For more healthy recipes visit <a href="http://www.heartfoundation.org.au/recipes">www.heartfoundation.org.au/recipes</a> or speak to the Heart Foundation’s Health Information Service on 1300 36 27 87. Ingredients <ul> <li>2 tsp olive oil*</li> <li>1 onion, sliced</li> <li>2 1/2 cups reduced fat milk* </li> <li>2 1/2 tbs cornflour</li> <li>2 tsp wholegrain mustard</li> <li>1/2 cup reduced fat tasty cheese*</li> <li>400g broccoli, cut into small florets</li> <li>425g can tuna chunks in spring water, drained and flaked*</li> <li>1/2 cup frozen green peas*</li> <li>8 sheets filo pastry* </li> <li>Olive oil spray*</li> <li>Garden salad, to serve</li> </ul> *Products available with the Heart Foundation Tick. Remember all fresh fruit and vegetables automatically qualify for the Tick Directions 1. Heat oil in a medium saucepan, add onion and sauté until light golden. Stir in 2 cups of the milk and heat to just below boiling point. 2. Mix cornflour to a smooth paste with the remaining 1/2 cup of milk, add to pan and stir constantly until sauce boils and thickens. Remove from heat and stir in mustard and cheese. 3. Steam or microwave the broccoli until just tender. Gently stir broccoli, peas and tuna through sauce. Divide mixture into 4 x 375ml capacity ovenproof dishes. Preheat oven to 200°C (180°C fan-forced). 4. Lay 1 filo sheet on a clean surface, apply cooking spray and top with another filo sheet. Cut layered filo into quarters. Gently scrunch up the filo pieces, place over filling in one dish and reapply cooking spray. Repeat with remaining filo to cover all four pies. 5. Place pies on an oven tray and bake for 15-20 minutes until filo is golden. 6. Serve with garden salad. Tips Can be made as four portion-sized pies or as one large pie. Republished with permission of <a href="https://www.wyza.com.au/recipes/tuna-and-broccoli-pies.aspx">Wyza.com.au.</a>

Food & Wine

10 conversation starters that make you instantly interesting

1.Perfect conversation starters Whether you’re working up the courage to talk to an attractive stranger of feeling awkward at a social or business event, the conversation topics will get you off to a winning start 2.Conversation Topic: Ask for a helping hand “Helping questions are great conversation starters because when a person helps you it forms natural bonds. When you help another person to figure what an item is on the buffet or locate the bathroom, it lowers your defences. For example, if you’re at the supermarket, ask ‘Do you know how to tell if this fruit is ripe?’ It makes you look open to learning more and will help the conversation flow naturally.” – Dawn Maslar, MS, author of Men Chase, Women Choose: The Neuroscience of Meeting, Dating, Losing Your Mind, and Finding True Love. 3.Conversation Topic: Compliment something other than someone’s looks “Instead of complimenting something generic like their eyes, highlight something that shows their personality, like their purse or a book. This is simple, elegant and great if you are interested in someone or anytime you want to boost their likeability toward you for business or social reasons.” – Paul DePompo, PsyD, ABPP, psychologist 4.Conversation Topic: Bring up a shared interest “Many people think they have nothing in common with a stranger but if someone is at a supermarket, restaurant or bar they are there for a reason – one which is likely similar to yours. You’re both there so you both share a common interest. Ask questions to find out what that interest is. For instance, ask about what their experience at that venue has been like or why they chose it.” – Shannon Battle, licensed professional counsellor 5.Conversation Topic: Go simple… yet bold “Give a genuine smile and say, ‘Hi.’ It sounds too simple but people are so used to other people staring at their phones that a simple smile and hello can be a very bold move. It shows the other person that you’ve noticed them and you’re interested in getting to know them better. And you’ll almost always get a hello back. (If you don’t, let it go. You don’t want to date a rude person anyway.)” – Suzanne Casamento, dating expert and the creator of Fantasy Dating 6.Conversation Topic: Ask for their honest opinion “Asking ‘I’ve been really thinking deeply about something and wondering if I can share it, and get your feedback?’ shows your interest in the other person and solicits new and interesting information that is fun to discuss. Pretty much anyone will want to share their opinions with an interested party and they will think you are nice and fun to be with, as well.” – Melissa Orlov, therapist and author of The Couple’s Guide to Thriving With ADHD. 7.Conversation Topic: Tell a bonding joke “Jokes work well because they are disarming and work on a biological level. If a woman laughs at a man’s joke, he feels assured that she has a level of comfort with him. For her, laughing releases oxytocin, the ‘bonding hormone.’ These two things together create an opening for more conversation.” – Dawn Maslar 8.Conversation Topic: Give an out-of-the-blue compliment “I always tell my clients to try out a compliment. It breaks the ice and these days it’s completely unexpected! You can test out doing this by just giving people walking down the street a compliment and see their reaction, most times people will give you a smile and possibly engage in more conversation. After all, who doesn’t like to be complimented?” – Stef Safran, a matchmaking and dating expert in Chicago and owner of Stef and the City. 9.Conversation Topic: Get (pop) cultured “Make a comment or joke about something big in pop culture that most people would be familiar with – something light, NOT political. If you need ideas look at what’s trending or are hot topics on Twitter or Facebook.” – Stef Safran. 10.Conversation Topic: Ask a fake favour “People love to help so asking for a small favour is a great conversation starter. If you don’t have a favour to ask for, just make one up. Ask the person you find attractive to help you reach something on a high shelf or hold something while you look through your wallet. At the very least you’ll end up with a fun story to tell your friends.” – Suzanne Casamento Written by Charlotte Hilton Andersen. This article first appeared in <a href="https://www.readersdigest.com.au/true-stories-lifestyle/relationships/37-conversation-starters-that-make-you-instantly-interesting/">Reader’s Digest</a>. For more of what you love from the world’s best-loved magazine, <a href="http://readersdigest.innovations.com.au/c/readersdigestemailsubscribe?utm_source=over60&utm_medium=articles&utm_campaign=RDSUB&keycode=WRA87V">here’s our best subscription offer.</a> <img style="width: 100px !important; height: 100px !important;" src="https://oversixtydev.blob.core.windows.net/media/7820640/1.png" alt="" data-udi="umb://media/f30947086c8e47b89cb076eb5bb9b3e2" />

Caring

Discover the fascinating history behind 6 superstitions

Ever wondered about the origins of common superstitions? Discover why raw onion is believed to ward against baldness, why four-leafed clovers are considered lucky and much more. Author <a href="http://t.dgm-au.com/c/185116/71095/1880?u=http%3A%2F%2Fwww.booktopia.com.au%2Fsearch.ep%3Fauthor%3DMax%2520Cryer">Max Cryer</a> investigates in the fascinating book <a href="http://t.dgm-au.com/c/185116/71095/1880?u=http%3A%2F%2Fwww.booktopia.com.au%2Fsuperstitions-max-cryer%2Fprod9781925335170.html">Superstitions and we we have them</a> from <a href="http://www.exislepublishing.com.au/Superstitions.html">Exisle Publishing</a>. 1. The superstitions behind umbrellas The name is descended from the Latin diminutive umbra,meaning shade or shadow. For many centuries umbrellas were soley for protection from the sun. It wasn’t until the 1700s that it seemed to occur to anyone they could also protect from rain. Naturally superstition gathered around them. The most common of them was not to open an umbrella inside the house - something bad will come of it. Nor must it ever be laid - even unfurled - on a bed or table. And any woman yet unmarried who drops her umbrella must wait for someone else to pick it up. If she retrieves it herself, she will never wed. 2. The superstition behind our beds For those who are unmarried, a suspicion might offer some help. It concerns ‘turning’ or ‘making’ a bed each day: If one day you would be wed, Turn your bed from foot to bed. Married or not, the susperstitious abide by the belief that whatever side of the bed you get into a night is the side you must get out of in the morning. Not doing so will cause disruption. In fact, the belief resulted in the saying that someone disgruntled ‘got out the wrong side of the bed’. (However, any potential disruption caused by inadvertently getting out on the ‘wrong’ side can be adverted by putting one’s socks on the right foot first, then the left.) The jury is still out on the ancient and vexed superstition regarding getting out of bed ‘backwards’. One school of thought decrees it is to be back luck, but the opposition says it is good luck. It’s probably best avoided by getting out of bed frontwards. 3. The superstitions behind baldness In spite of extensive advertising claims to the contrary, most men afflicted by baldness find the condition irreversible. An American superstition claims that baldness can be delayed by cutting the existing hair very short, then singeing the cut ends. Another superstition claims that when a man starts to go bald, he can slow the process by stuffing cyclamen leaves up his nose. And sprinkling parsley seeds on the head three times a year is also believed to help. Three other cures have come to us from ancient traditions - albeit two of them might be rather difficult to obtain: <ul> <li>Rubbing with raw onion might help, but it is best done when you’re going to be alone for a while. After rubbing, smear with honey.</li> <li>Believed to be more effective is a poultice of goose dung.</li> <li>Best of all - if you can get it - herbalist William Bullein’s Bulwarke of Defence against all Sickness(published in 1562) offers the best preventative: poultices made of fat from the body of a bear. </li> </ul> 4. The superstitions behind peas If your peas don’t come from frozen in a bag from the supermarket, but are actually shelled out of their pods within the household,watch out for any pod which contains either just one pea - or nine, for good luck will then come to you. And if the pod which housed nine peas is rubbed on a wart, it will cure it. . . or so the superstition says. 5. The superstitions behind garlic As far back as Ancient Egypt, garlic has been credited as a protection against a wide range of problems - and not just for its notable flavour. At least two versions of its origin ignore that it is just a plant, allium sativum, a tasty and aromatic member of the onion family. Early Egyptians perceived garlic as a gift from the gods, but post-biblical mythology decreed that it grew where Satan’s left food trod as he was evicted fom the Garden of Eden (the print of his right foot gave rise to ordinary onions). Supstition has credited garlic with various powers: protecting sailors from storms and shipwreck; giving soldiers courage; protecting miners from evil underground demons; if placed under the pillows of babies, protecting them overnight; and as a household garlands to protect against illness, witches, robbers and vampires. The perceived connection between vampires and garlic was slow in reaching the English language. The first vampire story in English, The Vampyre by John Polidori (1819) makes no mention of garlic. Irish author Bram Stocker’s later vampire novel, Dracula (1897), introduced the powerful effects between vampires and what they greatly fear: daylight - and garlic. But as a protection it had been widely used for long before that - against toothache, sunstroke, leprosy, even bed-wetting. Medical research can identify a genuine physical condition called alliumphobia - a powerful dislike, even fear of garlic. And there is a medical theory that some people simply must not each garlic because it causes disorder in certain blood types. Scholars point out that this condition, and its necessary repudiation of anything to do with garlic, may be a contributing factor to the legend of vampires and their avoidance of garlic. The vampire legends were believed historically in southern Slavic countries and Romania, where an eye was kept on those who rufused to eat garlic. Consequently, superstition decreed that cloves of garlic be placed in the mouths of the deceased before they were buried, to ward off any passing vampies.Do you avoid walking under ladders because you think it is bad luck? 6. The superstitions behind four-leafed clover A four-leafed clover has superstition going into a spin. Find one, and you’ll be able to see fairies and recognise evil spirits, which will give you the ability to tell who is secretly a witch. Carry it with you and evil spells will bounce right off you, and in your house the milk won’t turn sour. If a young woman puts the precious leaf inside her shoe, the first man she meets after stepping out will be her future husband, or (this suspicion has a let-out clause) if that’s not the case, it will be someone of the same name. It has been estimated that in nature, there may be one four-leaf clover approximately 10,000 three-leaf clovers. When found, each of the four leaves has a duty to fulfil; the first is for faith, the second is for hope, the third is for love, and the fourth is for luck. Note: It is perhaps worth adding that in recent years horticulturalists have successfully developed a clover plant with four leaves exclusively, so the purchase of a ‘four-leave-clover kit set’ will enable you to grow as many as you like. This is an extract from Max Cryer's <a href="http://www.exislepublishing.com.au/Superstitions.html">Superstititions and why we have them, Exisle Publishing</a>. <a href="http://t.dgm-au.com/c/185116/71095/1880?u=http%3A%2F%2Fwww.booktopia.com.au%2Fsuperstitions-max-cryer%2Fprod9781925335170.html">Get your copy here!</a> Written by Max Cryer. Republished with permission of <a href="https://www.wyza.com.au/articles/entertainment/discover-the-fascinating-history-behind-6-superstitions.aspx">Wyza.com.au.</a>

Art

"I'm not interested": Pauline Hanson tells Georgie Gardner what she really thinks about Julie Bishop

One Nation senator Pauline Hanson has weighed in on Julie Bishop’s rumoured TV show, saying she has no interest in tuning in to watch the program hosted by the former foreign minister. The Conversation with Julie Bishop – a big-budget talk show which has reportedly been pitched around to major networks by production company Screentime – could see the Liberal veteran travelling around the world to interview various female public figures. <a rel="noopener" href="https://www.news.com.au/entertainment/tv/pauline-hanson-weighs-in-on-julie-bishop-talk-show-proposal/news-story/9be6a977b3d6f8e587d9bd48422e37c7" target="_blank">The Australian</a> reported on Monday that the guest list for the show’s first season included Princess Mary, Michelle Obama, Jacinda Ardern and Oprah Winfrey among others. Speaking on Today Tuesday morning, Hanson dismissed the topic when asked by host Georgie Gardner if she would watch Bishop's TV show. “Do I really want to watch [Bishop]? No, I don’t. Leave it up to the other people. No, sorry, I’m not interested,” she said. “She is retiring on over $200,000 a year from the taxpayers so she really doesn’t have to find another job.” <blockquote class="twitter-tweet" data-lang="en"> “It doesn’t interest me whatsoever to actually tune in. I wasn’t tuned in when she was in parliament so I’m really not going to tune in.” <a href="https://twitter.com/PaulineHansonOz?ref_src=twsrc%5Etfw">@PaulineHansonOz</a> says she wouldn’t watch a talk show hosted by <a href="https://twitter.com/HonJulieBishop?ref_src=twsrc%5Etfw">@HonJulieBishop</a>. <a href="https://twitter.com/hashtag/9Today?src=hash&ref_src=twsrc%5Etfw">#9Today</a> <a href="https://t.co/93rm7m0u0m">pic.twitter.com/93rm7m0u0m</a> — The Today Show (@TheTodayShow) <a href="https://twitter.com/TheTodayShow/status/1145801957598040065?ref_src=twsrc%5Etfw">July 1, 2019</a></blockquote> Hanson was asked if she would consider doing The Pauline Hanson Show after she left politics. “No, I don’t think anyone would tune in to watch me either,” she said. Author Nikki Gemmell, who appeared on the morning show with Hanson, was more welcoming of the idea. “Apparently she wants to go all over the world, interview people like Michelle Obama, Sia, those kind of people who are perhaps a little bit shy about going on talk programs,” she said. “Often we get men fronting these programs. I think the questioning would be different and the people she would be interviewing would be more likely to talk to her because they would feel like she is one of them. “Lawyer background, really interesting questions, I imagine. Bring it on.” Screentime producer Andrew Garrick said while the company had approached Bishop about the TV show, she has yet to come on board. <blockquote class="twitter-tweet" data-lang="en"> So you quietly suggest to an exec at a TV network that a show built around someone genuinely clever could be good to make, and they leak the entire pitch. Classy industry this one. For everyone's clarity: we went to <a href="https://twitter.com/HonJulieBishop?ref_src=twsrc%5Etfw">@HonJulieBishop</a>, she wasn't on board yet. <a href="https://t.co/MAJG6C48Jg">https://t.co/MAJG6C48Jg</a> — Andrew Garrick (@ajgarrick) <a href="https://twitter.com/ajgarrick/status/1145551670643789824?ref_src=twsrc%5Etfw">July 1, 2019</a></blockquote> According to the document published by <a rel="noopener" href="https://www.news.com.au/entertainment/tv/pauline-hanson-weighs-in-on-julie-bishop-talk-show-proposal/news-story/9be6a977b3d6f8e587d9bd48422e37c7" target="_blank">The Australian</a>, the show was proposed as a “pure conversation” between guests from “diverse professional and cultural backgrounds” and host Julie Bishop, who is “accustomed to disarming the most tricky of personalities”. The interviews would be “filmed on the street of a city of the guest's choice, in full view of passersby”. In the meantime, it has been revealed that Bishop has re-entered the private sector with an appointment to the board of international consultancy firm Palladium, less than two months after leaving politics. Labor said Bishop’s new corporate job could mean a breach of ministerial standards. The Opposition’s foreign affairs spokesperson Penny Wong said Palladium had profited more than $500 million from the decisions made when Bishop was in office. “Not only doesn't it pass the pub test, it looks on the face of it like another breach of the ministerial standards,” Wong told <a rel="noopener" href="https://www.9news.com.au/national/julie-bishop-lands-palladium-board-position/841ecec5-4fe8-4dc3-9183-4ccae759d380" target="_blank">ABC News</a>.

News

What the Reserve Bank can do if interest rates get cut to zero

With its official cash rate now expected to fall below 1% to a new extraordinarily low close to zero, all sorts of people are saying that the Reserve Bank is in danger of “<a href="https://www.reuters.com/article/us-australia-economy-rba-analysis/australias-shrinking-monetary-policy-arsenal-tests-rbas-orthodoxy-idUSKCN1S90CL">running out of ammunition.</a>” Ammunition might be needed if, as during the last financial crisis, it needs to cut rates by several percentage points. This view assumes that when the cash rate hits zero there is nothing more the Reserve Bank can do. The view is not only wrong, it is also dangerous, because if taken seriously it would mean that all of the next rounds of stimulus would have to be come from fiscal (spending and tax) policy, even though fiscal policy is probably ineffective long-term, its effects being <a href="https://www.mercatus.org/publication/why-fiscal-multiplier-roughly-zero-0">neutralised by a floating exchange rate</a>. The experience of the United States shows that Australia’s Reserve Bank could quite easily take measures that would have the same effect as cutting its cash rate a further 2.5 percentage points – that is: 2.5 percentage points below zero. In a report <a href="https://www.ussc.edu.au/analysis/lessons-from-quantitative-easing-in-the-united-states-a-guide-for-australian-policymakers">released</a> by the University of Sydney’s United States Studies Centre, I document the successes and failures of the US approach to so-called “quantitative easing” (QE) between 2009 and 2014. It demonstrates that it is always possible to change the instrument of monetary policy from changes in the official interest rate to changes in other interest rates by buying and holding other financial instruments such as long-term government and corporate bonds. The more aggressively the Reserve Bank buys those bonds from private sector owners, the lower the long-term interest rates that are needed to place bonds and the more former owners whose hands are filled with cash that they have to make use of. In the US the Federal Reserve also used “<a href="https://www.federalreserve.gov/monetarypolicy/timeline-forward-guidance-about-the-federal-funds-rate.htm">forward guidance</a>” about the likely future path of the US Federal funds rate to convince markets the rate would be kept low for an extended period. It is unclear which mechanism was the most powerful, or whether the Fed even needed to buy bonds in order to make forward guidance work. However in a stressed economic environment, it is worth trying both. As it comes to be believed that interest rates will stay low for an extended period, the exchange rate will fall, making it easier for Australian corporates to borrow from overseas and to export and compete with imports. The consensus of the academic literature is that QE cut long-term interest rates by around one percentage point and had economic effects equivalent to cutting the US Federal fund rate by <a href="https://www.ussc.edu.au/analysis/lessons-from-quantitative-easing-in-the-united-states-a-guide-for-australian-policymakers">a further 2.5 percentage points</a> after it approached zero. QE need not have limits… Based on US estimates, Australia’s Reserve Bank would need to purchase assets equal to around 1.5% of Australia’s Gross Domestic Product to achieve the equivalent of a 0.25 percentage point reduction in the official cash rate. That’s around A$30 billion. With over A$780 billion in long-term government (Commonwealth and state) securities on issue, there’s enough to accommodate a very large program of Reserve Bank buying, and the bank could also follow the example of the Fed and expand the scope of purchases to include non-government securities, including residential mortgage-backed securities. It could also learn from US mistakes. The Fed was slow to cut its official interest rate to near zero and slow to embark on QE in the wake of the 2008 financial crisis. Its first attempt was limited in size and duration. Its success in using QE to stimulate the economy should be viewed as the lower bound of what’s possible. Even if it becomes less effective as it grows It often <a href="https://www.abc.net.au/news/2019-06-16/interest-rates-are-going-down-but-how-low-can-they-go/11210682">suggested</a> (although it is <a href="https://www.rba.gov.au/publications/confs/2017/borio-hofmann.html">by no means certain</a>) that monetary policy becomes less effective when interest rates get very low, but this isn’t necessarily an argument to use monetary policy less. It could just as easily be an argument to use it more. Because there is no in-principle limit to how much QE a central bank can do, it is always possible to do more and succeed in lifting inflation rate and spending. Fiscal policy may well be even less effective. To the extent that it succeeds, it is likely to push up the Australian dollar, making Australian businesses less competitive. US economist <a href="https://www.mercatus.org/publication/why-fiscal-multiplier-roughly-zero-0">Scott Sumner</a> believes the extra bang for the buck from government spending or tax cuts (known as the multiplier) is close to zero. Reserve Bank Governor Philip Lowe this month appealed for <a href="https://www.rba.gov.au/speeches/2019/sp-gov-2019-06-04.html">help from the government itself</a>, asking in particular for extra spending on infrastructure and measures to raise productivity growth. He is correct in identifying the contribution other policies can make to driving economic growth. No one seriously thinks Reserve Bank monetary policy can or should substitute for productivity growth. But it is a good, perhaps a very good, substitute for government spending that does not contribute to productivity growth. Three myths about quantitative easing In the paper I address several myths about QE. One is that it is “printing money”. It no more prints money than does conventional monetary policy. It pushes money into private sector hands by adjusting interest rates, albeit a different set of rates. Another myth is that it promotes inequality by helping the rich to get richer. It is a widely believed myth. Former Coalition treasurer <a href="https://www.afr.com/news/economy/monetary-policy/murdoch-criticises-central-bank-stimulus-20141017-119n1f">Joe Hockey</a> told the British Institute of Economic Affairs in 2014 that: Loose monetary policy actually helps the rich to get richer. Why? Because we’ve seen rising asset values. Wealthier people hold the assets. But it widens inequality no more than conventional monetary policy, and may not widen it at all if it is successful in maintaining sustainable economic growth. A third myth is that it leads to excessive inflation or socialism. In the US it has in fact been associated with some of the lowest inflation since the second world war. These days central banks are more likely to err on the side of creating too little inflation than too much. Some have argued that QE in the US is to blame for the rise of left-wing populists like Alexandria Ocasio-Cortez and “<a href="https://realconservativesunite.com/2019/03/07/ben-bernanke-the-father-of-extreme-us-socialism/">millennial socialism</a>”. But it is probably truer to say that their grievances grew out of too tight rather than too lose monetary policy. QE has been road tested. We’ve little to fear from it, just as we have had little to fear from conventional monetary policy. Written by Stephen Kirchner. Republished with permission of <a rel="noopener" href="https://theconversation.com/below-zero-is-reverse-how-the-reserve-bank-would-make-quantitative-easing-work-118843" target="_blank">The Conversation</a>.

Money & Banking

America's most interesting national parks

I’ve long been fascinated by US National Parks. At the top of my list are Zion, Bryce Canyon and the Grand Canyon National Parks. Here’s why these are my favourite USA National Parks. Grand Canyon National Park, Arizona John Wesley Powell, an early explorer of the American West credited with leading the first group of Europeans down the Colorado River through the Canyon, wrote: “The wonders of the Grand Canyon cannot be adequately represented in symbols of speech, nor by speech itself.” After cycling for hours down a dusty track to reach a remote viewpoint over the Grand Canyon’s North Rim called Toroweap Overlook I have to agree. The stupendous view leaves me speechless. And to have this jumble of volcanic cinder cones and lava flows on the edge of one of the world’s great natural wonders virtually to myself is especially wonderful. Stratum upon stratum of multi-hued rock lies stacked beneath me. Dating back over two billion years, they reveal more dramatically than anywhere else on Earth how our world was formed, while two miles below, the Colorado River snakes through the gorge, carving ever deeper into this iconic symbol of the American Southwest. Zion National Park, Utah World famous for its massive rock walls of red and white Navajo sandstone that rise over 610 metres from the desert floor, Zion National Park is a canyon oasis of astounding natural beauty. Meaning ‘heavenly city’ in the vernacular of Utah’s predominant Mormons, Zion is a breathtaking blend of high plateaus, sheer canyons, and monolithic cliffs. These sheer walls were carved by decades of wind, rain, ice and the waters of the Virgin River. Once there, I soon discover that getting my feet wet is the best way to explore Zion’s most popular backcountry. In an area called the Narrows, you can explore a slot canyon which is significantly deeper than it is wide. Here, the North Fork Virgin River runs beneath thousand-foot walls of Navajo sandstone sculpted by thousands of years of erosion into some of the most beautiful rock formations in all of the American Southwest. Bryce Canyon National Park, Utah This park’s spectacular natural amphitheatres contain the world’s largest collection of hoodoos — thin, flame-coloured limestone spires protruding from arid badlands that can rise as high as a ten-storey building. Spread over many miles, they resemble a ‘silent city’ of stone. I discover that the best way to experience Bryce’s natural wonders is on foot. More than sixty miles of trails weave through the canyon’s maze of sunburnt stone hoodoos. As I amble along the popular Navajo Loop Trail, I encounter famous hoodoos with names like Three Wise Men, Indian Princess, The Rabbit and even ET. The Palute Indians who once hunted here were the first to describe Bryce’s Hoodoos in anthropomorphic terms. Bringing fairy chimneys and goblins to mind, they still fire the imagination. Other popular US National Parks: Olympic National Park, Washington From its wild beaches to its lush, mossy rainforest and rugged, glacier-capped mountains, the park’s diverse habitats are ideal for adventurous travellers looking for a little bit of everything. It’s really three parks in one. Lofty mountains offer plenty of snow and glaciers. It’s lush, verdant Hoh Rainforest is home to Roosevelt elk, black bears and other distinctive wildlife. And its rugged coastline has miles of wild, deserted beaches sprinkled with sea stacks and tide pools. Nowhere else in America will you find three such entirely different worlds to be experienced within one park. Glacier National Park, Montana Nicknamed the Crown of the Continent because the water flows from it all the way to the Pacific Ocean, the Gulf of Mexico, and to Hudson’s Bay, Glacier National Park straddles the Canada–United States border. An untouched wilderness of ancient forests, deep valleys and spectacular alpine scenery, the park is a paradise for hikers and trekkers. It also contains more than 130 pristine lakes and hundreds of species of animals, including Grizzly bears, mountain goats and moose, mountain goats, wolverines and Canadian lynxes. Popular activities include backpacking, cycling and camping. Grand Teton National Park, Wyoming Named for the tallest mountain in the Teton Range, this national park is famous for its distinctive jagged granite pinnacles, numerous lakes, abundant wildlife, and historic barns and homesteads. A popular destination for mountaineering and hiking, Grand Teton is also a world-renowned trout-fishing destination and is one of the few places where anglers can catch Snake River fine-spotted cutthroat trout. Denali National Park and Preserve, Alaska America’s largest national park, Denali is named after America’s tallest mountain, 6,190 metre-high Denali (formerly known as Mount McKinley). It’s six million acres of wilderness includes tundra, spruce forest and glaciers. Denali is home to grizzly bears, wolves, moose, caribou and Dall sheep. In spring, summer and fall you can bike, hike and mountaineer. In winter try snowshoeing, snowmobiling and skiing in the park’s rugged mountains and high Alpine tundra. Denali’s remoteness and strict protection of its wildlife habitat and ecosystems ensure that this arctic gem remains pristine. Written by Mark Sissons. Republished with permission of <a href="https://www.mydiscoveries.com.au/stories/america-s-most-interesting-national-parks/">MyDiscoveries</a>.

International Travel

The interesting gift Scott Morrison gave the Queen

<div> <div class="replay"> <div class="reply_body body linkify"> <div class="reply_body"> <div class="body_text "> Scott Morrison had passed along an unusual gift for the Queen while stopping off at London for his special trip. The Australian Prime Minister had been invited to Buckingham Palace in an intimate meeting just a day after US President Donald Trump made headlines internationally for his state visit with the 93-year-old monarch. The 51-year-old was pictured holding a red gift bag upon meeting with Her Majesty alongside his wife, Jenny. The unusual gift was revealed to be a copy of Winx: Greatest of All Racehorses which had been signed by author Andrew Rule. <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/ByS0Ip3nNs1/" data-instgrm-version="12"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div> </div> </div> <div style="padding: 19% 0;"></div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"></div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/ByS0Ip3nNs1/" target="_blank">A post shared by The Royal Family (@theroyalfamily)</a> on Jun 4, 2019 at 9:07am PDT </div> </blockquote> What makes this unique gift all the more special is the simple fact Queen Elizabeth is an avid horse fan. While Winx is retired, the Australian racehorse has long been an iconic figure after his historic four-year run of 33 consecutive race wins. Both Mr Morrison and his wife also met with Prince Charles and Duchess Camilla at Clarence House before visiting the Queen. The UK is just one stop of many for the PM who announced after his election win last month that he would be re-engaging with Australia’s neighbours, partners and allies across the globe. For his first stop, Mr Morrison visited the Solomon Islands, a place he described as “one of Australia’s nearest and most important neighbours". He was the first Australian leader since 2008. “Australia and the world face uncertain times and global economic headwinds,” the PM said. “Our engagement with our family and neighbours and international partners is more important than ever.” Later this week, Mr Morrison will visit Singapore to highlight Australia’s commitment to enriching economic and security ties with Southeast Asia. </div> </div> </div> </div> </div>

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