A dream becomes a nightmare !

Thousands of people must be reeling this morning after learning that yet another investment company has gone to the wall. Australian Capital Reserve ( ACR ) yesterday joined two similar big investment firms in appointing receivers.
The people hardest hit are self funded retirees.
Those who save and invest and provide their own retirement free from the need for the pension have faced tough times of late. Petrol prices have gone through the roof. Fruit and vegetables prices - and many other foods - have sky rocketed because of the drought. Councils are demanding rate rises and the state government has been steadily hiking the prices of electricity and gas well above the rate of inflation.
No wonder self funded retirees have found a shortfall between income and expenditure - and looked for a better return on their investments to make up the difference.
ACR and similar companies were basically the finance arm of building groups profiting from the huge surge in home prices that occurred several years ago. At that time people were buying off the plan and finished homes and apartments were bringing much higher prices than at commencement.
To compete with traditional investment houses such as banks people like ACR offered annual interest of above nine percent for minimum deposits of $ 20,000 - as opposed to bank offerings of about six percent.
This was very attractive to retirees - and in the early stages other investors inspired confidence because the booming market covered higher rates and interest was paid promptly when due.
Now those high rates are unsustainable. Housing has become out of reach of many and bank foreclosure sales are increasing - further depressing the market. As a result, high flying investment companies offering above average interest rates are being driven to the wall - and nest eggs - and dreams - are being lost.
There will be consequences for the economy. In dire cases despair will drive some to suicide. Others will abandon self funding retirement - have a world holiday to spend funds excess to achieving the pension - and join the queue at Centrelink.
The sad thing is that for many the dream of a comfortable and independent old age has become a nightmare !