Use the internet as a financial tool

The internet is one of those points in time that will define generations.

Like, where were you when Whitlam was sacked? When Princess Diana died? September 11?

Do you remember life before Chuck Norris invented the internet?

(Chuck already has every internet site in his brain. He created the net to share his supreme knowledge efficiently.)

If you’re not making use of Chuck’s benevolence, then it’s costing you money. And possibly even more importantly than that for many, particularly older generations, precious time.

Older people are flocking to the internet, social media and email faster than other generations, but that’s largely because they started so far behind the eight ball. But ignoring it, or denying yourself, is probably costing you a wad.

The internet is clearly useful for a bunch of stuff. Best, really, is for instant argument settling at dinner parties, or cheating at pub trivia nights.

It’s second greatest use, in my opinion, is as a financial tool. Being able to find information on almost any topic can help make better, faster, stronger decisions on your finances.

Research on potentially better interest rates for your savings, stock research, managed funds, property research. Or even on the other side – spending. Being able to purchase as a wiser consumer is just as important.

There is so much free information out there, that if you are prepared to read and research enough, you should find everything you need to make good decisions.

There are now “comparison” sites out there on just about everything. Be warned: Some of them are truly awful and are simply run as a sales funnel for a particular company or industry. I got sucked into one recently regarding document storage – then got contacted for the rest of the day by storage businesses.

Some sites are great. And can be a great place to start for reliable information that can help you make solid decisions. Some with well-earned reputations include Canstar and Infochoice, particularly for things like online savings accounts.

Getting the best rate on your cash has become more and more important the further that interest rates fall.

As always, the best place for your savings is in an offset account of your mortgage. But if you don’t have a mortgage and need to earn a real interest rate because that what you’re living off or are saving to buy a home, you’re going to have to do a bit of work for it.

Retired Australians are even more critically aware of this, with the tiny increases to the age pension that kicked in this month. And there will be tens of thousands who will need the extra returns from all of their investments when they are kicked off the age pension under new rules that start in January 2017.

However, I do understand Luddites – those who fear technology. They’d rather deal with humans, rather than machines.

The internet cannot replace personal advice. If you’ve heard of the term “robo advice”, then let me assure you that it’s currently a complete dud.

As it stands now, it is little more than a bunch of pre-fabricated investment options (that are often tied to product made by the robo advice house).

Personal advice is particularly important when it comes to complex financial issues. These include matters such as life insurance, property purchasing, self-managed super funds and estate planning. Unless you’re going to do an amazing amount of (ongoing) research, there are many areas of your finance that are best left to human experts.

For most, this will also include your mortgage.

Have you ever seen an absolutely amazing interest rate advertised from a little known lender and been tempted to apply?

We see and look into them often. The problem is that so many of them are just “bait” loans with conditions that the majority of potential borrowers will be unable to qualify for, because they will fall outside of the target market for that particular product from the lender.

You won’t know this until you’ve called them, or applied online via their website. Once you have been told that you don’t qualify for that particular deal, they’ve always got something, “nearly as good”, that they can offer you.

And “nearly as good” is simply back in the pack with all of the other providers. But the bait did its job.

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