21st Century Academy

The global economy is in a recession. Yet, for someone who is dedicated to increasing his or her wealth, “recession” is just another word for “opportunity.” According to the minutes from the Reserve Bank of Australia’s recent meeting, interest rates are likely to keep on falling throughout the upcoming months. It’s a buyer’s market out there right now. It is the perfect time for enterprising and bold individuals to make as many long-term investments as they can. Enterprising individuals should take advantage of low interest rates to make investments they wouldn’t have been able to make otherwise–for example, buying property.

Federal Reserve Anticipates Slow Economy For Short Term

Just this month, the RBA expressed low confidence in the ability of its existing rate cuts to invigorate the economy in the short-term. Even the Government’s recent stimulus package is unlikely to stimulate the economy until the latter part of 2009. Analysts predict that interest rates will decrease by as much as 75 points this upcoming month. As of February’s meeting, Australia’s cash rate is already a staggeringly small number: 3.25%, the lowest that rate has ever been in 45 years.

The RBA’s predictions for Australia’s economy are as modest as the interest rates that it has set are low: a growth of just .25% is predicted for the second quarter of 2009. Other analysts think that even this number is too high, predicting a contraction of the economy.

Don’t Follow the Herd

When it comes to successful investing, one of the most important rules to keep in mind is not to follow the herd. In a recession, it helps to go against trends and spend if you can afford it. Take advantage of the actions of the Federal Reserve. Take out large loans. Take some educated and calculated risks when interest rates are low, so you are much more likely to yield a profit.

Written by Clint Maher - 21st Century Academy
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