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Judith Lucy and all women - please change your money lives

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By Peter Switzer

I want to talk about the comedian Judith Lucy and how her money mistakes stagger me. Before I do, let me give you some news that many investors were waiting for, despite the fact it’s not really important unless you trade daily.

The Fed did drop the word “patient” from its statement that goes after its meeting on interest rates. Even though it means interest rates will rise this year (and it implies sooner rather than later), the Dow Jones index spiked higher. That’s good news that lots of investors were waiting for, to see how stocks would react. It does surprise me how so many people are interested in news — the ongoing political soapy (which is Canberra) and who won the World Cup game last night — but they wouldn’t know what interest rate they’re being charged on their home loan!

A number of things have driven me to this story today. I hope lots of people read this and then react to it to save themselves a lot of money. I also hope that many resolve not to make the money mistakes that Judith Lucy admitted to in the last episode of her very amusing and informative program on the ABC last night called Judith Lucy I Am Woman.

Her confronting lack of commitment to her own wealth was staggering, though given the female friends she interviewed, it seems typical. However, it’s consistent with what I’ve discovered since we created Switzer Home Loans, where our variable rate is 4.54% and our five-year fixed rate is a staggering 4.68% for five years!

Because of this, I ask friends and family what the interest rate is on their home loans. People simply don’t know! They don’t care that they could be costing themselves tens or even hundreds of thousands of dollars, depending on the size of their loan.

Last week, I showed a simple example, which I want to share with you again to ram home the message. With a $500,000 loan over 30 years at 5.24%, which most people are paying, the total payment over the life of the loan equals $992,852. Compare this to our Switzer rate of 4.54% with a total payment of $916,316. That’s a $76,536 saving!

Is your complacency or time poverty worth $76,536?

That’s a $500,000 loan. I know people with million dollar loans. Their losses from a too-dear loan and their crazy ignorance of their own bottom lines could be costing over $150,000! Wouldn’t that be better in their super fund?

And that’s where I drag Judith Lucy into my story. She and her friends admitted to being super nonplussed. They were saying: “What is super?” “I don’t get super!” but yet they laughed off their pretty worrying look at their future as they age.

Judith admitted to being 46 years of age so she has at least 20 years of treading the boards or doing great TV . She has plenty of time to create some decent super but things have to change! And fast. In fact, I’d love to help her fix up her money life and I’d do it for free to try and help the women (and men) out there who might know more about My Kitchen Rules than they know about their credit card rate!

On our 2GB Super Show on Monday nights, my colleague Paul Rickard researched the best credit card rate. The winner was ME Bank at 9.99%, with a flat rate, no annual fees, 55 free-interest days and the same rate for purchases and for cash advances.

You know, most people are using credit cards with rates closer to 20%. The scary bit is that most people don’t know what rate they’re on! They know South Africa beat Sri Lanka (and they might’ve given up four hours watching the game to find that out), but they wouldn’t save a $1,000 bucks a year on their credit cards or $76,000 over 30 years on their home loan!

Making money, getting wealthier and being money smart links back to self-leadership. Our natural inclination is not to exercise, to eat really tasty but bad food and avoid stuff that might be harder than watching some brain dead show on the box.

Well, I’m a moneyman, get me out of here. I’m prepared to take anyone who wants to change his or her money life with me.

Once a week for a while, on Thursdays, I’ll deliver a money tip to change your life and maybe you’ll start reading Penny Pryor’s weekly stories on saving and making money too.

You don’t get wealthier in a day. You get wealthier daily. But you have to change. Yes, Judith, keep your routines about being a typical money knucklehead — they’re very funny, though they’re also tragic when you think about how many women and men are in the same boat.

My advice to anyone who thinks they’re a bit like Judith is to make a call to your bank and find out what home loan rate you’re on. Then compare it to our Switzer loan of 4.54% (nothing hidden). In the process, your bank should offer you a lower rate but if they don’t beat us you can switch after making this simple phone call — 1300 664 339.

I have made it easy for you but try thinking about this old money tip: “If anything is worth doing, it’s worth doing for money.”

And as I started with one comedian, let me finish with another. American Jerry Seinfeld says genes experts reckon men are genetically programmed to want to build big things — roads, tall buildings, bridges, etc. But why don’t they do it? Because it’s very, very hard!

Changing a normal money ignorant person to a money smart person is hard too but once you make a start, the money you save starts a snowball rolling. It not only builds the bank balance, it starts to make you feel comfortable, less scared about your future and even happy!

As Sophie Tucker said, and Billy Connolly ‘borrowed’ for a bank ad some years ago: “I’ve been rich. I’ve been poor. Rich is better.”

By the way, the Dow has spiked following the Fed meeting, as the first interest rate rise in the US looks more like September and not June.

So, Judith if you had super, your fund will go up today and you’d be richer. I hope you do have some super Judith but if you don’t, that’s gotta change.

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Published: Thursday, March 19, 2015

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