Repayment at what price;Making money off the rich through luxury stocks; Mid-life millionaires; The daddy track; Canadian banks

By Amanda Morrall (email)

1) Repayment at what price?

Yesterday's announcement by Tertiary Education Minister Steven Joyce that student loan repayments would be jacked up from 10% to 12% isn't sitting well with students. It's not hard to see why.  Something in the order of 15% all students are said to be living in financial stress. Plus, the new repayment rate will be three times the base rate in Australia. Capping allowances at four years will also means some students pursuing careers that require a long-term investment (i.e. medicine) will be forced to consider other options.

With a staggering NZ$12 billion in outstanding student debt, Government obviously needs to get tougher on debt collection.

With a record 39,000 plus Kiwis having quit NZ in the past 12 months in search of a better life in Australia, dwindling employment and dubious prospects of a well-paid job upon graduation here, Government's latest plan to balance the books is hardly a selling point for NZ. I do worry for NZ some days.

Here's an excerpt from the New Zealand Union Students Association talking about the loan repayment rate even before it was raised.

While New Zealand graduates with student loans have to start paying back their loans at a rate of 10 cents in every dollar earned over $19,084, Australian graduates pay back on a graduated scale that starts at 4% of their total earnings once they earn over $48,000.

“The New Zealand rate kicks in at a level barely above poverty, where graduates are certainly not demonstrating any private benefit from their study, and at precisely the time when they are going to be faced significant other costs of setting up their homes, their families, or potentially their businesses. At $30,000 a year, that $40 a fortnight is a big deal. The Australian repayment level is fairer and makes more sense in terms of the nation’s economics.”

2) The lap of luxury

Europe may be poised to go up in flames with rising unemployment levels, sovereign debt and the potential break-up of eurozone however it's not all doom and gloom, at least not for the selectively invested. The rich continue to spend and that's good news for luxury companies the likes of Christian Dior, LVMH Moet Hennessy Louis Vuitton and their stockholders.

The newly-created Bloomberg European Luxury Goods Index (BNLXGDEU), of which LVMH is a part, has shot up 357 percent since Nov. 18, 2008, according to this piece by Bloomberg. The Stoxx Europe 600 Index is up also by about 27%. The story also notes, the luxury index has outperformed the market by 6 percent this year; between Sept. 21, 2011, and Dec. 30, 2011, it underperformed by 18 percent.

Here's Sonja Laud, manager of the Schroders Global Equity Income Fund, talking to the Telegraphs' Robert Miller about why she's keen.

3) Mid-life millionaires

Harland Sanders, a.k.a "Colonel Sanders", didn't open his first franchise until age 62. Obama hit his stride at 43, and Martha Stewart's cakes really only started to rise in her late 30s.

Here's some advice from Kiplinger.com via Yahoo Finance from these and other late bloomers on how to be smart and successful.

4) The daddy track

Women now outnumber men in university classrooms and increasingly those on the career track are bringing home more bacon then their blokes.According to a recent survey from the Pew Research Centre, it's not necessity so much as satisfaction that is fuelling female ambition. Interestingly, separate research (from the University of  Nebraska) found that men aren't so threatened by this. Many in fact, say they'd give up work to stay home and raise baby.

Forbes Money reporting on this social trend  notes that 75 percent of men consider being a parent very important, while only 48 percent had the same opinion about having a successful career. I reckon we're in the midst of a giant gender correction that will eventually see more females around the boardroom than men. A long wait to go yet.

5) Oh Canada

For about a year now, a colleague has been banging out about the housing bubble in Canada. Ironically, said colleague suggested this latest report on Canadian banks being named among the most financial stable in the world (four of their big banks took the top 10 spots in  Bloomberg Magazine's study of 22 banks internationally) was further proof of that bubble waiting to burst in my face. (And indeed it will - Eds)

Five key criteria were used to judge their stability, including "comparing Tier 1 capital with risk-weighted assets, and nonperforming assets with total assets. All banks had to be profitable within the last year and have assets in excess of $100-billion."

Tier 1 capital includes a bank’s cash reserves, outstanding common stock and some classes of preferred stock, all of which combine to act as a buffer against losses.

Any bank that had failed government stress tests weren’t eligible for consideration, the Globe and Mail reports.

I'll believe it when I see it. Which will go first, NZ or Canada?

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall