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Don"t let investment goals be blinded by interest rate rise – Proactive Investors Australia



A week ahead of the next expected interest rate rise, Wealth Management principal at Picher Partners, Andrew Wilson, discusses how the landscape will change for leveraged investors, but why this isn’t time to panic.

In this article:

More than $650 million in loans were drawn down in April alone for the purpose of personal investment and that doesn’t include financing property.

Investors have enjoyed low interest rates across the last few years but now the cost of money is turning skywards. Indications are that the Reserve Bank is not yet finished hiking interest rates, and as lenders inevitably follow suit, the landscape will change for leveraged investors.

Rates going up should not mean hitting the panic button and ripping up investment plans, but it might mean tweaking the strategy to make sure your goals stay in view.

Start your review with remembering why you borrowed in the first place – to deliver on your unique investment objectives. Whether it’s planning for retirement or funding a project, your goals give direction and purpose to the financial plan.

Readjust your stride

Hurdles are not just for track athletes. The hurdle rate is a factor taken into consideration when borrowing for investment.

Let’s assume the cost of borrowing for investment purposes is 3%. With a salary in the top marginal income tax rate, the after-tax interest cost, or hurdle rate, is approximately 1.5%.

A borrowing to invest strategy is profitable, if the investment return exceeds the hurdle rate.

Over the last two years, the hurdle rate has been exceptionally low, around 1.5% to 2%. Most asset classes have exceeded that with ease and therefore investors have generated a profit.

As interest rates rise, that hurdle rate will start to get higher and more challenging to get over.

It is still plausible to clear a hurdle rate that reaches 4% or 5% if you’re investing in growth assets but an annual return below the hurdle rate will become more frequent and the strategy can oscillate more frequently between a gain and loss position.

Investors will need to be more selective about the assets they invest in and focus more on the cash flow of the gearing strategy.

A buffer is an amount added to the hurdle rate to allow for interest rate increases and unforeseen cash flow issues. It is prudent for investors to review what their cash flow would look like if interest rates increased by 1.5-2.5%.

If this extra interest cost is not manageable, investors can get ahead of the curve by reducing their gearing level before their financial position becomes too tight. Equally, you can re-assess whether borrowing is required at all to achieve your objectives.

If you can achieve your objectives without borrowing to invest, you may be taking unnecessary risk by implementing a gearing strategy.  

Cut your interest bill down

Many investors have multiple debts – some deductible, some non-deductible. As a rule of thumb, it makes sense to repay your non-deductible debt sooner than your deductible debt, because a tax benefit can be claimed on the deductible debt.

Consolidating debt is a common strategy for investors with multiple loans. Consider refinancing higher-cost loans into your lowest-cost loan to reduce your overall interest cost. Noting that it is generally not recommended to consolidate deductible and non-deductible debt.

An offset or a redraw facility is also useful for borrowers. These allow investors to offset the interest costs incurred on the loan. For investors with a debt outstanding, it does not make sense to accrue cash in a bank account, earning a lower rate of interest, while incurring a higher rate of interest on outstanding debts.

Any income, including a salary, could be directed straight into the offset account, even if it only saves a week or two weeks of interest cost on a loan. When that’s compounded over a 10- or 20-year period, it makes an enormous difference.

Consider the exit strategy

Often people get frustrated that financial institutions won’t lend them large sums against a high-value asset. In the investor’s mind, the calculations make sense – they want to borrow $1 million and they have $2 million in assets to secure it against, so why doesn’t the bank provide the financing?

The bank needs an investor to have sufficient cash flow to repay the debt because that is the primary exit for a debt. Selling the asset to repay the loan is the backup strategy, not plan A.

Use this mindset when examining a personal gearing strategy by making sure you have enough cash flow to repay the debt, plus a margin of safety. If you’ve borrowed at 3%, borrowing costs of 5% should be factored in as a buffer against interest rate rises in the future.

If you are relying on selling assets to extinguish the debt at retirement, there is considerable timing risk in trying to sell the asset at a high point. For a portfolio of assets, consider gradually selling down over an extended period to average your exit price. Or, for single-asset strategies, such as real property, be prepared to be flexible on your sale date.

Being a forced seller when markets are down will be a painful experience.

There’s no doubt there are a few investors feeling edgy about what the future holds, with the rising cost of borrowing and concerns about growing their wealth.

As rates go up, use it as a catalyst for reviewing the investment plan, and factoring in the additional risk that comes with borrowing to invest. Take some time out to assess your position and make sensible adjustments but don’t lose sight of your goals.

About the author

After a decade working in two senior roles at Australia’s largest and longest-standing financial institutions, Andrew Wilson joined Pitcher Partners, working his way up to principal in a short time. He provides his clients counsel and guidance on all financial matters as part of an ongoing relationship, focusing on helping clients build sufficient passive investment income. Andrew’s expertise cover investment management, tax minimisation, debt management, asset protection, retirement planning and estate planning.

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FXM VENTURE – Offers News Investment Platform – GlobeNewswire



Glasgow, Scotland, Aug. 13, 2022 (GLOBE NEWSWIRE) — With the intention of being one of the top investment platforms for investors of all stripes, FXM Venture was established in July of 2020. FXM has been extending its impact to adjacent nations thanks to the vision and leadership of its core members.


Ten significant individuals were involved in the founding and early development of FXM Venture, with the goal of establishing this investment fund’s brand on a global scale. And today, 100 members work in 6 transnational branches and continue their tradition. In addition to being directed and run by professionals with decades of expertise in a variety of sectors, including finance, investing, marketing, and technology, FMX is also run by vital departments like: customer service personnel, technical staff,…

Additionally, in just two years (starting in July 2020), FMX has called for a total investment of 8 million USD.


For both long- and short-term traders, funding rates are regular payments. Investors are free to select a transaction based on their financial situation and liquidity. Users can, in particular, withdraw money at any moment and get interest.

At FXM Venture, we have experienced traders in both Forex and Cryptocurrencies allowing us to build a stable financial foundation to increase the returns of our investors.

FXM also has AI technology in trading approaches to Real-time forecasts of hundreds of scenarios, execution strategies, and commercial alliances, in addition to our research, market neutral algorithms by monitoring market movements and building trading algorithms. Our primary goal is to establish a win-win relationship between the customer and the firm, in which FXM Venture develops specific investment plans and strategies, while investors can then choose suitable investment packages, together with FXM consider and select specific investment plans.


By expanding its operations and financial system in 2022, FXM aims to become one of the best legitimate funds in the world. To that end, 4 additional branches will be opened, and recruiting efforts will be stepped up to reach our target of 200 members.

In terms of financing, FXM VENTURE’s aim is to raise our fund up to $15 million.. Aside from that, FXM equips you with the resources you need to be completely confident in your investment decisions. Furthermore, you may invest with FXM with complete confidence because here are what make FXM different:


FXM does not intend to stop at satisfying almost 30,000 customers who have been using services and investing in FXM (with a customer satisfaction rate of 78% and a customer return rate of 85%), FXM is as complete as possible with the goal of increasing the number of clients to 50,000 in the next quarter with a satisfaction level of over 90%.


Visit the website for more information

And also, Remember to refer friends to be rewarded with $25 for every friend who joins and registers at least one package — with no cap on the number of people you can refer, and gain matching income on their profits: F1 (10%), F2 (5%), F3 (3%), F4 (2%).

Media details:

Company Name: FXM Venture

City: Glasgow

Country: Scotland


Telegram group:

Telegram channel:


There is no offer to sell, no solicitation of an offer to buy, nor a recommendation of any securities or any other products or services. Furthermore, nothing in this PR should be construed as a recommendation to buy, sell or hold any investment or security, or to engage in any investment strategy or transaction. It is your responsibility to determine whether any investment, investment strategy, security or related transaction is suitable for you based on your investment objectives, financial situation and risk tolerance. Please consult your business advisor, attorney or tax advisor regarding your specific business, legal or tax situation.

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PepsiCo Makes $550 Million Celsius Investment As Hip Hop Mogul Sues For His Shares – Forbes



has its sights on gaining a bigger share of the energy drink with a $550 million investment in Celsius Holdings. The energy drink maker is also at the center of a lawsuit between Russell Simmons and his ex-wife Kimora Lee Simmons along with her husband Tim Leissner, as he tries to retrieve his shares in Celsius back from them. Allegedly Kimora Lee and Leissner transferred and were using his shares of Celsius as collateral to pay a bond in connection with these criminal charges. Leissner already pleaded guilty, and agreed to forfeit $43.7 million for his role in the Malaysia 1MDB scandal that cost Goldman more than $3 billion. Simmons alleges that his shares of Celsius are being used as collateral to pay a bond in connection with these criminal charges.

The Breakdown You Need To Know:

Celsius recorded a first-quarter domestic revenue increase of 217% to $123.5 million and the long-term distribution deal gives Pepsi a minority stake of about 8.5%. The brand, which doesn’t use artificial preservatives or sugar, adds to PepsiCo’s energy drink portfolio, which already includes Rockstar as well as Mountain Dew drinks Amp, Game Fuel, and Kickstart. CultureBanx reported that with these types of returns it’s easy to see why Simmons wants his shares back from the couple.

Quick Recap on how these three people ended up in this situation. Goldman Sachs
last year agreed to pay the Malaysian government $3.1 billion, to settle claims in the 1Malaysia Development Berhad (1MDB) fund. One of the main people who got the bank involved in this scandal was Kimora Lee’s Simmons husband Tim Leissner.

The bank swiftly parted ways with him after his shady dealings with Jho Low came to light. In November 2018, when Leissner agreed to pay $43.7 million toward victim compensation, it was in order to avoid jail time.

In his claim, Simmons says Kimora and Leissner “knew full well that Leissner would need tens of millions of dollars to avoid jail time, stay out on bail, and forfeit monies for victim compensation.” Simmons claims they used their Celsius shares as collateral for Leissner’s bail, and he wants his shares returned.

Now Russell wants no financial part in keeping Leissner out of jail. In a letter sent to his ex-wife Kimora Lee on May 5, 2021, he was pleading with her to do the right thing and avoid a lawsuit. He wrote that “I am shocked and saddened to see how your side has behaved in response to my repeated attempts to get an agreement from you to rightfully and legally reaffirm my 50% of the Celsius shares..which have been locked up with the government after being used for your husband’s bail money.”

What’s Next:

A representative for Kimora Lee said “Kimora and her children are shocked by the extortive harassment coming from her ex-husband, Russell Simmons, who has decided to sue her for shares and dividends of Celsius stock in which Kimora and Tim Leissner invested millions of dollars.” At this point Russell is asking a judge for damages against Kimora and Leissner and believes he should be awarded restitution for interest and equal value for the wrongfully obtained shares.

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Saskatchewan Leads Provinces In Building Construction Investment | News and Media – Government of Saskatchewan



Released on August 12, 2022

Saskatchewan first among the provinces in year-over-year growth

Today, Statistics Canada released June 2022 Investment in Building Construction numbers, which showed Saskatchewan with a 63.0 per cent increase (seasonally adjusted) compared to June 2021, ranking first among the provinces in terms of percentage change.

Saskatchewan also had strong month-to-month growth for building construction investment with a 17.6 per cent increase (seasonally adjusted) between May 2022 and June 2022, second among the provinces. The value of building construction investment in June 2022 was $464 million, the highest monthly investment in the province since August 2013.

Investment in residential building construction also saw strong month-to-month growth with an increase of 24.0 per cent.

“Saskatchewan’s economy is moving full steam ahead as we advance our Government’s strategy to increase our exports and attract investment into the province,” Trade and Export Development Minister Jeremy Harrison said. “Saskatchewan is a global leader in the sustainable production of the food, fuel and fertilizer that the world needs, a reality that will lead to more jobs and opportunities in our province for years to come.”

The latest Statistics Canada Labour Force Survey showed there were 581,600 people employed in July 2022 – an increase of 24,400 jobs (+4.4 per cent) compared to July 2021, the third highest percentage increase among the provinces. The seasonally adjusted unemployment rate of 4.0 per cent remained the second lowest among the provinces, a decrease from 7.1 per cent in July 2021 and well below the national average of 4.9 per cent.

Saskatchewan has ranked highly in a number of other key economic indicators in recent months, including June 2022 merchandise exports, which had the second highest year-over-year growth among the provinces at 57.3 per cent and June 2022 building permits, which had the second highest month-to-month growth among the provinces at 15.8 per cent and the third highest year-over-year growth at 27.4 per cent. June 2022 urban housing starts had the second highest year-over-year growth at 87.0 per cent, compared to the national increase of 0.2 per cent (unadjusted).


For more information, contact:

Jill Stroeder
Trade and Export Development
Phone: 306-787-6315

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