Bargains you will come to love

Everyone loves a bargain. Something cheaper than it was a little while ago, or a bonus thrown into the purchase.

End of year stocktake sales, flights outside of holiday peaks, end-of-line specials on cars, supermarket meat on a Sunday afternoon, shoe and suit sales …

Me? Easy. Happy hours. Stamp in passport, basic beach bar, garbed in singlet and thongs. And I’m not fussy – beer, wine or cocktails – I’ll happily slam down two-for-one anything.

Bargains give you more satisfaction endorphins per buck spent. Buyers regret is less frequent.

And particularly at the bar, where the decision to be a better consumer “for the sake of the global economy” can also be justified for necessary rehydration. The hangover the following morning is a different matter.

But generally, take 10-50 per cent off anything and we’ll not only pounce on it, we’ll knock over the elderly to get that flat screen first, if it’s a Boxing Day sale.

It doesn’t matter what you spend! IT’S A SALE. YOU’RE SAVING MONEY!

(That’s what a halfwit would say. But that’s how half of us think. And I’m about to explain how the other side of their brain doesn’t work that well either.)

It’s possibly the same bunch of halfwits who, incredulously, behave in the opposite way when the price of real (long-term appreciating) assets fall.

When property markets come off a bit … when share markets wobble … most of us don’t see these as bargains. We fear this is just the start of a slippery slope, towards a correction or a crash. Pessimism takes over.

Take the reaction on global stock markets to Brexit. Possibly the biggest one-day fuss over nothing in recent history.

Why do we act so differently when it comes to investing in shares or property, or buying our first home?

So many of us actually do the opposite of what could be considered rational.

When stock markets fall, we often panic, sell and get out of the market.

And when it comes to property … incomprehensible.

When property prices have been rising for a few years, all we hear is the moaning about how impossible it is for first home buyers to get into the market. It’s an “unaffordability crisis”.

At these points, politicians and, worse, the self-interested, make stupid announcements about how to make homes more affordable for first time buyers. Things like “let the young access their super to buy homes”.

It always sorts itself out. All markets inevitably do.

Take Perth’s property market. It’s taken a while, but the steam has been unwinding over the last 12-18 months. (Conversely, Sydney and Melbourne are staying stubbornly high, while Brisbane, which was a basket case for so long, seems to be awakening.)

A bottoming of property prices isn’t looking imminent. When you’ve got spruikers clutching at straws for a sales message to buy, and economists saying there’s plenty of ugly still to come, it’s hard to see a bottom in sight for Perth.

There’s an oversupply of new apartment stock. Rents are falling.

This should be great news for many. Particularly those who were, in recent years, despondent about not being able to afford their first home.

It’s 5 per cent cheaper than a year ago (more if you take into account inflation) and it could get even cheaper. If you’re renting and your landlord isn’t showering you with love for always paying the rent on time, there’s never been a better time to move to save money!

And the share market is little different. Major corrections are almost always short-term buying opportunities, which Brexit again seemed to be just a few weeks ago.

If you don’t have the courage or knowledge to be able to make your own calls on where the stock market is headed, but know that you should be invested anyway, then take the guess work out of it by investing regularly.

Because of the volatility in the stock market – and because you would generally rather be playing with the kids, or having dinner with your partner – picking highs and lows with stocks can be tough.

So, make your investment decision automatic. The same as you have for your super. Invest every month.

Unlike a shopping bargain, the real bargain with investing – with shares or property – comes with the knowledge, years later, that these assets have appreciated.

Bruce Brammall is the author of Mortgages Made Easy and managing director of Bruce Brammall Financial. E: bruce@brucebrammallfinancial.com.au.