We got hit with an interest rate hike of .5% with more to come…

➼The “COST OF MONEY” or as it is called by our daily radio, newspapers, TV, and the occasional expert appearing on the Bloomberg channel… Interest rates are the blood line, the oxygen and life for our personal and business life. For a business without borrowed cash we will not be able to buy raw materials, pay salaries, pay bills, pay rent…etc. etc. etc. we borrow money, use it to produce our products, and we pay the going rates for borrowed money… this is also why we must calculate interest rates into our costs calculations, so we don’t lose money on our transactions and production.

➼When we invest money into our bank account today, we get paid piddly interest by the bank that is using our money to lend it to others for a double or triple rate. Think of our credit card as an example – today, prior to the interest rate increase we are charged anywhere from 19% to 22% interest rates which are a very useful tool to control the economy; we can control raging out of control prices in real estate for example by raising interest rates on mortgages… Besides mortgages, rising interest rates impact the stock and bond markets, personal loans, student loans, auto loans and business loans. Can you think of others which may affect your monthly cash balance?

➼The logic is simple enough, it’s all about alternatives, when the interest rates in the markets are high, it makes the stock exchange with its volatility and unpredictability less attractive – that’s the main reason the stock market took 1,000 points dive yesterday, scary, you may investigate other investments that are less volatile with a peace of mind.  “Many times, the stock and bond markets react in an unexpected way during rising interest rates,” says Brian Stivers, president and founder of Stivers Financial Services in Knoxville, Tenn. “That means stock prices could go up when historically they have gone down. So, as in all types of markets, diversification is the key.”

➼Now keep in mind that a creative National Bank of Canada interest policy can be worked and adjusted according to many situations such as pandemic, inflation, war, or out of proportions investments by foreign interests!!!

➼What are your thoughts on the latest National Bank of Canada interest hike, which is predicted to be the 1st of others to come?

 #essential4biz #interestrates #costofliving #stockmarket #mortgage #loan #credit