Nearly, every day, the media, including, television, radio, newspapers, and Internet websites, discuss and debate, rates of interest. These discussions are rarely elaborate and well-explained to ensure that most people understand the meaning behind them and how it can impact their lives. What is the point of worrying about whether they increase, decrease, or staying steady? What impact do these have on our daily lives? Although, there are numerous, aspects of our lives that are affected by these in the present article, we will try to briefly think about the impact of these areas, and review, analyze and debate five areas, which may be important to most people.
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1.Stock market:Have you heard someone tell you that the stock market isn’t important to them since they do not invest? However should you have retirement accounts, or hold mutual funds, and they are important, significantly! Additionally, low rates of interest (many believe that they are at the historic lows) can mean there are fewer places and ways to invest and/or place your money in. If banks or bonds pay low interest/ dividend rates (below the inflation rate), this leaves far more options and in many cases creates a rising stock market (in terms of price, etc.).
2.Real estate market:Generally, when the cost of borrowing, is low, mortgage rates are extremely attractive, and thus, home prices, increase and the overall, real estate market, goes up, in price. This is based on a variety of other factors , such as demand and supply stock levels, the overall economy, job/employment conditions, and so forth. We are currently witnessing a rate of price increases which we’ve not (if ever) experienced before. However, part of the reason is shifting perceptions and priorities after the horrible pandemic. The lower rates the more it costs per thousand – a hundred dollars, to cover one’s mortgage on a monthly basis!
3.Use credit cards:Credit card issuers typically provide attractive rates on their cards, particularly when interest rates (costs of borrowing) are low. People who have greater optimism about the future tend to take on more loans and use credit cards more.
4.Personal:Because it is less expensive to borrow money, when rates are lower in the market, people are more inclined to get personal loans! This is not as appealing if the rates go up or normalize.
5.Bonds, as well as bank rates of interest:For a long time, the typical bank account was credited with at a fixed rate of interest. I recall this rate, as being between 4 to 5% for a long time, and later in a short period, rates going much higher because of inflation, as well as other economic conditions! These rates are historically, lower, and, in – fact somewhat lower than the cost of living is rising. Naturally, they will alter as time passes, but it is dangerous, speculative, and ill advised to try to market – time!
Understanding rates and how they connect to other components of your life will make you more informed and wise. Are you willing to commit to trying, to become a more, educated, and committed/prepared buyer?
Richard has been CEO, COO, Director of Development Consultant, CEO, and has run professional functions. He has also spoken to thousands of people and led personal development seminars. Richard is a financial and real estate professional for over 40 years. Rich has written three books, as well as thousands upon thousands of articles.