Money For Nothing

When I was at Uni, I pulled beers for a very wealthy publican.

This bloke started with nothing, but he had a very simple business model that made him a fortune.

He bought the pubs no other publican wanted to touch, renovated them, and then promoted them with $1 drinks, free drinks for women, free pool on Sundays, and $5 steaks.

He bought his first pub just before the recession ‘we had to have’ in 1990 and then watched interest rates go to 22%!

Meanwhile, every hotelier around town waited for him to go broke along with a stack of other publicans.

But he didn’t.

Instead, he catapulted himself into Australia’s rich 200 list about a decade later.

So how did he do it?

Simple. When the drinkers flocked to his pubs with their beer goggles on, some would drift into the gaming room and empty their wallets into the poker machines.

You see, he didn’t care about the bar sales because there was very little money in dollar drinks.

He just knew that if he could get enough bums on seats in the gaming room, he’d clean up.

And clean up he did.

Ka-ching!!

The banks are playing a similar game.

Recently, they’ve been falling over themselves offering homeowners and investors big wads of cash to refinance their loans.

The offers look like money for nothing!

But they’re not.

They’re just crappy deals and customers are tumbling for them.

But here’s the thing. The banks aren’t doing anything wrong. They’re just taking advantage of people’s greed, knowing the punters will always go for an easy jackpot.

And then when it all goes to custard, there’ll be parliamentary enquiries, demands for another Royal Commission, another blistering episode on 4 Corners, while Alan Jones blows up deluxe about consumers getting ripped off.

All because borrowers were too lazy, greedy, or impatient to take their beer goggles off and read the offer document.

It takes two to tango.

BTW…if you think I’m sticking up for the banks, I’m not. You might remember this Moowsletter I wrote in 2019…Why I Use a Mortgage Broker.

In any case, here’s the fine print you need to know…

If the banks are willing to put $5k in your purse, then rest assured they’ll be taking $5k PLUS, out of your pocket in the form of a more expensive loan.

No one gets something for nothing.

However, if you want to refinance your loan and get some free cash, I strongly recommend you use a mortgage broker.

It’s the difference between the butcher and the dietitian.

A butcher (bank) will sell you whatever’s in their front window while the dietitian (mortgage broker) will recommend what’s best for you.

In other words, the butcher is conflicted with bias and self-interest, the dietitian isn’t. A good dietitian will work hard to get you the best deal using a variety of banks.

So, if you’re looking for a good broker, we have two wonderful ladies we can recommend.

Sophie Chapman and Vanessa Bell.

Both of them are lenders and investors with at least ten years experience each.

But don’t take my word for it. Organise a 20-minute chat with them to see if they can help you.

And then you’ll understand why we’ve been using mortgage brokers for years.

And why we have zero interest in sending our clients to a butcher…especially when they’re offering free drinks.

Have a great weekend!

Adam

Please note – Suncow doesn’t do referral arrangements or receive incentives for referring clients. The arrangements we have in place with Sophie and Vanessa are completely independent and non-commercial.

Back paddock – company culture is defined by what people do when no one’s looking.