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Borrowing money isn’t always a bad thing – debt can be a sensible way to build wealth

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p>Debt, in some form or another, is part of our financial profiles whether we like it or not. And it can be a useful way to build wealth if it is managed carefully and wisely.</p> <p>For example, you may borrow money from the bank to buy an asset – a resource of economic value that generates income from its productive use. Investment property is an example.</p> <p>So investing in an income-producing property can be a good idea.</p> <p>If you are already in the property market, the home equity you’ve accumulated – the share of the property value that’s yours – can help you buy a second property. This time, you may not need a deposit as big as the initial investment.</p> <p>In the event that the rental market is booming and your tenants pay you more than what you repay on the loan, municipal rates and property manager fees, then the wealth-building machine will start to run itself.</p> <p>But debt makes many people uncomfortable.</p> <p>In South Africa, a person earning R20,000 a month commits on average <a href="https://businesstech.co.za/news/finance/585372/south-africas-middle-class-is-in-serious-trouble-right-now/">63% of their salary to repaying unsecured debt</a> – such as credit cards, personal loans, overdrafts or “buy now, pay later” facilities. As a general guideline, it’s suggested that <a href="https://www.investopedia.com/terms/d/dti.asp">no more than 40%</a> of your income should be used to service debt.</p> <p>Financial anxiety has its roots in some misconceptions. The main one is that all debt is bad. This isn’t true. Prudent borrowing to buy an asset can help build wealth in the medium to long term. So fears about debt need to be weighed against a broader understanding of wealth accumulation. Well-managed debt can play a role in that process.</p> <p>Here are the four biggest misconceptions about debt. Recognising them will help you develop a more nuanced approach to debt.</p> <h2>The misconceptions</h2> <p><strong>All debt is bad debt.</strong></p> <p>Indeed, debt is a problem when you can no longer manage it and it starts to manage you. One of the simplest ways to tell whether debt is working for you or against you is through “leveraging”. This refers to the use of debt to acquire an asset that is worth more than the value of the debt. It’s also known as positive or favourable leveraging.</p> <p>People who take out unsecured loans are leveraging unfavourably when the debt is driven by consumption. Often there’s nothing to show for what you’ve spent. Unsecured loans also tend to charge higher interest rates to compensate for the lack of collateral.</p> <p><strong>Only financially reckless people are in debt.</strong></p> <p>This is the next misconception. Second to unsecured loans, most South African consumer debt portfolios are taken up by <a href="https://businesstech.co.za/news/wealth/617685/these-income-levels-in-south-africa-owe-the-most-debt/">home loans</a>. The most realistic way to gain entry into the housing market is through a mortgage. You’re doing the right thing if your mortgage is paid off within a reasonable time. This will mean that, in the long term, the value of the property will surpass the home loan amount that was taken out to buy the property in the first place.</p> <p>But there are two misconceptions related specifically to mortgages.</p> <p><strong>After you’ve paid the mortgage deposit, you won’t have other fees to pay.</strong></p> <p>This isn’t correct. Banks charge a fee to open and close a home loan account. There can also be a penalty when a home loan is repaid prematurely. So be sure to read the fine print about discharge fees or closing costs.</p> <p><strong>If you stick to the repayment amount for your mortgage, you’ll be able to repay the loan quickly.</strong></p> <p>This isn’t true – even if interest rates fall and your mortgage repayments decline, your home loan is most likely tied to a loan term of 20 to 30 years. Many banks will quote a monthly mortgage repayment amount that seems affordable at face value but is in fact based on a 20-year term period.</p> <p>Banks are businesses and it works in their favour if you take longer to repay your mortgage because that translates into more interest repayments. The longer the duration of the home loan, the more interest you pay, the more profit they make.</p> <p>If it takes over 20 years to repay a bond, it’s often the case that the value of the interest repayments exceeds the initial loan amount.</p> <p>Home loan calculators are a useful tool that can help you assess how much you could afford to repay on a home loan depending on the deposit saved, if interest rates change and how long it will take you to repay the mortgage with topped-up contributions.</p> <p>It is essential to have a goal for when you’d like to finish paying off your mortgage and a plan in place to achieve this goal. If you don’t do this you could become a mortgage prisoner.</p> <h2>Keeping your eye on the prize</h2> <p>As we’re about to conclude the year and enter the festive season, it’s a good time to remember your financial goals and not let your guard down by unconsciously swiping or tapping that credit card.</p> <p>“Janu-worry” is around the corner, and so is the financial anxiety that comes with it. But it need not be the case. Debt can either be the cure or the cause of your financial position. Reconsider spending patterns that prompt you to use your credit card. Too much debt over short periods is an irregular spending pattern that is a warning sign.</p> <p>There’s no harm in buying what you can afford or staying in your financial lane if the alternative forces you to sacrifice your hard-earned income on servicing consumption-driven debt.</p> <p>For better or worse, debt is a part of our financial portfolios. But the road to financial empowerment is not always easy – financial planning can help you keep your eye on the prize.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/192630/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/bomikazi-zeka-680577"><em>Bomikazi Zeka</em></a><em>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/borrowing-money-isnt-always-a-bad-thing-debt-can-be-a-sensible-way-to-build-wealth-192630">original article</a>.</em></p> </div>

Money & Banking

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Young homeowners are more likely to use their home as an ‘ATM’ than their Boomer parents. Here’s why

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/rachel-ong-viforj-113482">Rachel Ong ViforJ</a>, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a> and <a href="https://theconversation.com/profiles/christopher-phelps-378137">Christopher Phelps</a>, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a></em></p> <p>For many Australians, the family home is their largest financial asset. With an increasing variety of ways to tap into home equity, the temptation to access this wealth is ever growing.</p> <p>Homeowners increase the debt owed on their home when they borrow against their <a href="https://doi.org/10.1080/02673037.2013.783202">equity</a>. Standard mortgage home loans now provide facilities for relatively cheap or free withdrawals of equity from the home.</p> <p>This turns the <a href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">home into an ATM</a>, which borrowers can access when they choose.</p> <p>Our new <a href="https://doi.org/10.1080/02673037.2024.2400158">study</a> asks what motivates Australians to tap into their home equity, and how does this behaviour change with age?</p> <p>Surprisingly, despite having much lower housing equity levels, younger homeowners borrow often, and borrow more, than their Boomer parents.</p> <h2>How common is equity borrowing?</h2> <p>Using 15 years of data from the government-funded <a href="https://melbourneinstitute.unimelb.edu.au/hilda">Household, Income and Labour Dynamics in Australia </a>(HILDA) survey, we tracked the mortgage debt and repayments of homeowners aged 35 and over.</p> <p>The chart below shows younger owners are far more likely to engage in equity borrowing.</p> <p>In 2006, nearly 39% of the youngest homeowners, aged 35–44, borrowed against their home equity. By 2021, this number had dropped to 29%. Despite the decline, it’s still 24 percentage points more common than those aged 65 and over. The older group has remained steady at about 5% over the years.</p> <hr /> <p><iframe id="Ll9Cw" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/Ll9Cw/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe></p> <hr /> <h2>How much do equity borrowers withdraw from their home?</h2> <p>Among those who use their home like an ATM, younger borrowers now withdraw larger amounts than older borrowers.</p> <p>In 2006–07, equity borrowers aged 35–44 and 45–54 withdrew on average $43,000 and $57,000, respectively (expressed in real values set at 2022 price levels). By 2021, the amount withdrawn by these two age groups had climbed to $70,000 and $100,000.</p> <p>On the other hand, the amount withdrawn by borrowers aged 55 or older fell from more than $50,000 to less than $40,000.</p> <hr /> <p><iframe id="ujq3S" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/ujq3S/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe></p> <hr /> <h2>What motivates equity borrowing?</h2> <p>Young homeowners’ equity borrowing behaviours are sensitive to changes in house prices and debt values, and their financial risk preferences. Among those aged 35–44, a $10,000 increase in the primary home value raises the likelihood of equity borrowing by ten percentage points.</p> <p>Every $10,000 in debt against the primary home reduces the likelihood by 2.8% percentage points. Those willing to take substantial financial risk are eight percentage points more likely to borrow against their home than those who are risk-averse.</p> <p>Those aged 65+ are not inclined to borrow, and exhibit little change in equity borrowing behaviour with variations in asset, debt, income or financial risk preferences.</p> <h2>Why borrowing practices differ between age groups</h2> <p>As well as being more likely than older homeowners to borrow against equity, the younger group also withdraws higher amounts than their Boomer parents.</p> <p>This is despite younger borrowers already carrying much higher debt against their primary home. Among those in our study who engaged in equity borrowing in 2021, the median debt before borrowing was $401,000 for 35-44 year-olds compared to $0 for those aged 65+.</p> <p>As real house prices have risen over decades, the current generation of young homeowners has had to invest more money into purchasing their first home than previous generations.</p> <p>It’s therefore not surprising the primary home is now widely viewed as a financial resource to be <a href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">tapped into to meet spending needs</a>.</p> <p>On the other hand, most Baby Boomers bought their first home at more affordable prices than their children, and at lower levels of debt. Now they don’t appear to be spending their kids’ inheritance by drawing down housing wealth.</p> <p>In fact, older parents may shy away from equity borrowing to <a href="https://www.pc.gov.au/research/completed/wealth-transfers/wealth-transfers.pdf">bequeath wealth to children</a>. Some also <a href="https://doi.org/10.1017/S0047279417000058">dislike passing debt</a> on to their children.</p> <p>Older people may also avoid equity borrowing due to concerns about <a href="https://treasury.gov.au/sites/default/files/2023-08/p2023-435150.pdf">aged care costs</a>. Some may be hampered by <a href="https://doi.org/10.1016/j.jue.2013.08.003">poor financial literacy</a>.</p> <h2>More debt ahead without policy changes</h2> <p>Present trends suggest young homeowners will remain indebted for longer periods, and more and more will <a href="https://theconversation.com/more-of-us-are-retiring-with-mortgage-debts-the-implications-are-huge-115134">retire with mortgage debt</a>.</p> <p>For indebted retirees, there are real prospects of <a href="https://theconversation.com/fall-in-ageing-australians-home-ownership-rates-looms-as-seismic-shock-for-housing-policy-120651">drawing down of superannuation</a> to pay off mortgages in retirement.</p> <p>This may impose extra burdens on the age pension system. Another unwelcome consequence, which may add to health costs, is the prospect of <a href="https://www.ahuri.edu.au/sites/default/files/migration/documents/AHURI-Final-Report-319-Mortgage-stress-and-precarious-home-ownership-implications-for-older-Australians.pdf">debt-related psychological distress</a> among those who can’t pay off their mortgage in old age.</p> <p>If the current trends continue, the <a href="https://www.afr.com/policy/economy/what-happens-when-australia-s-boomers-hand-5-trillion-to-their-heirs-20240515-p5jdvf">great wealth transfer</a> that has already begun looks set to <a href="https://theconversation.com/not-everyone-wins-from-the-bank-of-mum-and-dad-73842">further entrench inequality</a> between those who have access to the bank of mum and dad and those who do not.</p> <p>Encouraging older people to use their housing equity to fund their needs in old age may lighten fiscal burdens on younger generations. But policy reforms will be needed to relieve concerns about the risks of equity borrowing in old age.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/238924/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/rachel-ong-viforj-113482"><em>Rachel Ong ViforJ</em></a><em>, ARC Future Fellow &amp; Professor of Economics, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a> and <a href="https://theconversation.com/profiles/christopher-phelps-378137">Christopher Phelps</a>, Research Fellow, School of Accounting, Economics and Finance, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/young-homeowners-are-more-likely-to-use-their-home-as-an-atm-than-their-boomer-parents-heres-why-238924">original article</a>.</em></p> </div>

Money & Banking

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The Queen lets Duchess Kate borrow valued possession during Balmoral Castle visit

<p>The Duchess of Cambridge made a rare sighting on the weekend, appearing in public during her maternity leave to attend church in Balmoral with her royal family.</p> <p>Duchess Kate was seen travelling to Crathie Kirk parish in Scotland, sitting next to the Queen in the car and behind her husband Prince William, who was in the front passenger seat.</p> <p>Kate showcased her classy style while wearing a Catherine Walker coatdress and hat, but it was her jewellery which sent royal fans into a frenzy.</p> <p style="text-align: center;"><img style="width: 500px; height: 416.48590021691973px;" src="https://oversixtydev.blob.core.windows.net/media/7820515/1.jpg" alt="" data-udi="umb://media/40c2e519b0d7485890a247bc6f69e333" /></p> <p>The mother-of-three was seen wearing a pair of pearl earrings that were borrowed from Her Majesty’s very own jewellery box.</p> <p>The Bahrain pearl and diamond drop earrings are very special to the Queen as the pearls were gifted to the monarch on her wedding day.</p> <p>According to <a href="http://queensjewelvault.blogspot.com/2012/11/the-bahrain-pearl-drop-earrings.html"><span style="text-decoration: underline;"><em><strong>Her Majesty’s Jewel Vault</strong></em></span></a>, the earrings were made from two of the seven pearls that were given to the Queen and Prince Philip for their 1947 wedding from the ruler of Bahrain at the time.</p> <p>The earrings also made an appearance in the Buckingham Palace summer exhibit that marked the royal couple’s 60th wedding anniversary.</p> <p>William and Kate have joined the Queen and Prince Philip on their annual summer holiday trip to Balmoral Castle.</p> <p>As the royals made the trip to the local church on the cool 14-degree day, Kate was seen with a cosy blue blanket draped across her knees for the duration of the drive.</p> <p>The Queen also looked elegant in a blue ensemble, while also wearing a pair of pearl earrings.</p> <p>Kate is not the only in-law who has had the privilege of borrowing a piece of jewellery from the Queen’s personal collection, with Duchess Meghan also previously wearing jewels belonging to Queen Elizabeth II.</p> <p>At her wedding to Prince Harry, Meghan wore the Queen Mary Diamond Bandeau tiara from the Queen’s jewellery vault, which was previously owned by the monarch’s grandmother, Queen Mary.</p> <p>It is also believed that when Meghan was invited for the first time to accompany the Queen on a public engagement, Her Majesty gifted the newlywed a pair of pearl and diamond drop earrings similar to her own version.</p> <p>Meghan wore the special present during their trip to Cheshire, where the duo were photographed giggling with each other throughout the day.</p> <blockquote style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" class="instagram-media" data-instgrm-permalink="https://www.instagram.com/p/BkAZm5Wgu9S/?utm_source=ig_embed" data-instgrm-version="9"> <div style="padding: 8px;"> <div style="background: #F8F8F8; line-height: 0; margin-top: 40px; padding: 58.79629629629629% 0; text-align: center; width: 100%;"> <div style="background: url(data:image/png; base64,ivborw0kggoaaaansuheugaaacwaaaascamaaaapwqozaaaabgdbtueaalgpc/xhbqaaaafzukdcak7ohokaaaamuexurczmzpf399fx1+bm5mzy9amaaadisurbvdjlvzxbesmgces5/p8/t9furvcrmu73jwlzosgsiizurcjo/ad+eqjjb4hv8bft+idpqocx1wjosbfhh2xssxeiyn3uli/6mnree07uiwjev8ueowds88ly97kqytlijkktuybbruayvh5wohixmpi5we58ek028czwyuqdlkpg1bkb4nnm+veanfhqn1k4+gpt6ugqcvu2h2ovuif/gwufyy8owepdyzsa3avcqpvovvzzz2vtnn2wu8qzvjddeto90gsy9mvlqtgysy231mxry6i2ggqjrty0l8fxcxfcbbhwrsyyaaaaaelftksuqmcc); display: block; height: 44px; margin: 0 auto -44px; position: relative; top: -22px; width: 44px;"></div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" rel="noopener" href="https://www.instagram.com/p/BkAZm5Wgu9S/?utm_source=ig_embed" target="_blank">A post shared by Kensington Palace (@kensingtonroyal)</a> on Jun 14, 2018 at 6:10am PDT</p> </div> </blockquote>

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4 things you should borrow instead of buy

<p>In today’s disposable world, it’s easy to get bogged down in a lot of ‘stuff’ in your home. When things are cheap (but not made to last) we think nothing of throwing things out instead of repairing them, or buying things instead of borrowing them.</p> <p>But if you want to save some money as well as avoid adding to landfill, there are many ways that you can borrow what you need instead of buying it. Some have a small fee, while others are completely free.</p> <p><strong>1. Books, CDs and magazines</strong></p> <p>OK, OK you already know about libraries for borrowing books. But did you ever think about borrowing your favourite magazines instead of buying them? Or listening to a CD before you commit to buying it by borrowing from the library music collection? You can also sign up to online eBook borrowing services at many libraries – they have the latest titles that you can download to your Kindle or smartphone to read at your leisure. Then you just click a button to return them. Easy.</p> <p><strong>2. Cars</strong></p> <p>Need to deliver something, pick up a friend at the airport, or get to an out of the way meeting? You can ‘borrow’ a car if you don’t have one using car share programs such as GoGet. For a fee you’ll be given a smartcard to access cars parked all over major cities. Book in online, use your card to open the car and the keys are inside waiting for you. Enjoy all the benefits of a car without the insurance, petrol and maintenance costs.</p> <p><strong>3. Toys</strong></p> <p>Think about the types of toys your kids or grandkids like at age one, two and three. All pretty different, right? Instead of cluttering your home with plastic toys that kids grow out of so quickly, why not borrow what you need instead? Many libraries offer toy libraries, normally for an annual fee. It’s also a great way to see what items your kids love before you choose something for them for their birthday or Christmas.</p> <p><strong>4. Tools</strong></p> <p>How many times per year do you actually use your drop saw or hedge trimmers? Did you know that many areas have tool libraries where you can borrow what you need? Contact your local council to inquire if there is one in your area. Or speak to your local Men’s Shed who may have some insight.</p> <p>Have you ever thought about starting a borrowing scheme in your local area? Perhaps it could be a fashion swap or book swap. We would love to hear your ideas in the comments.</p>

Books

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5 style tips to borrow from the Queen

<p>She’s one of the most recognisable and powerful women in the world, but the Queen’s influence reaches far beyond public engagements, charity work and national affairs. She’s proven herself to be a wonderful wife, mother, grandmother and even great-grandmother, and Her Majesty has asserted herself as something of a fashion icon, too.</p> <p>Today, as we celebrate her 91st birthday, we take a look at some of her best style secrets, and how you can add a hint of royalty to your own look, without the accompanying price tag.</p> <p><strong>1. Be bold</strong></p> <p><img width="498" height="245" src="https://oversixtydev.blob.core.windows.net/media/35600/image-1_498x245.jpg" alt="Image 1 (10)" style="display: block; margin-left: auto; margin-right: auto;"/></p> <p>There seems to be a misconception that older women avoid wearing bright colours, but the Queen is proof that there’s no better age to take fashion risks and go bold. Her energetic, vibrant colour choices always make her stand out in a crowd and she always makes sure to show off her personality through her outfits.</p> <p><strong>2. Don’t be afraid to be too “matchy”</strong></p> <p><img width="500" height="333" src="https://oversixtydev.blob.core.windows.net/media/35601/image-2_500x333.jpg" alt="Image 1 (11)" style="display: block; margin-left: auto; margin-right: auto;"/></p> <p>Throw the rulebook out the window! Clashing prints may be in and matching your shoes to your bag might no longer be a necessity, but that doesn’t mean a classic two- or even three-piece outfit (or even one item with a matching accessory) can’t look fantastic. Her Majesty never shies away from a nice coordinated outfit, and always pulls it off with style.</p> <p><strong>3. Add some bling</strong></p> <p><img width="500" height="314" src="https://oversixtydev.blob.core.windows.net/media/35602/image-3_500x314.jpg" alt="Image 3 (8)" style="display: block; margin-left: auto; margin-right: auto;"/></p> <p>There’s no easier way to jazz up a casual outfit than to add a bit of glitz. The Queen is particularly partial to gem-encrusted brooches, but you can achieve the same beautifully-adorned look with blingy jewellery or a sparkly hair clip. Best of all? These days, costume jewellery and brooches look almost as good as the real thing.</p> <p><strong>4. Dress suitably</strong></p> <p><img width="500" height="424" src="https://oversixtydev.blob.core.windows.net/media/35603/image-4_500x424.jpg" alt="Image 4 (3)" style="display: block; margin-left: auto; margin-right: auto;"/></p> <p>Her Majesty always looks dressier than most, but she knows when to tone it down. No matter if she’s attending a formal dinner or going for a horse ride, the Queen always dresses perfectly for the occasion and isn’t afraid to don some wellies if need be!</p> <p><strong>5. Embrace hats</strong></p> <p><img width="498" height="245" src="https://oversixtydev.blob.core.windows.net/media/35604/image-5_498x245.jpg" alt="Image 5 (2)" style="display: block; margin-left: auto; margin-right: auto;"/></p> <p>There’s many people out there who adamantly deny they can pull of a hat, but the secret is finding the right style. Her Majesty is a huge fan of dramatic, whimsical hats, but also has smaller, more casual hats for less formal occasions.</p>

Beauty & Style

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Is Kate about to borrow Diana’s tiara?

<p>Next week the Duchess of Cambridge is set to don a crown for the third time in her life. So one question remains, will she wear the beautiful Spencer Tiara?&nbsp;</p><p>On October 20 Kate Middleton, the Duchess of Cambridge, will attend her first Buckingham Palace state banquet. Protocol will see the Duchess wear a tiara for the event.</p><p>While there are several pieces for Kate to choose from, rumours, or rather questions, have been flying around as to whether or not she will choose the beautiful Spencer Tiara. This is the heirloom piece that Kate’s late mother-in-law, Princess Diana, wore on her wedding day – and several times following. It is said to be the frontrunner for crown contenders.&nbsp;</p><p>Other options include the Cambridge Lover’s Knot Tiara, given to Diana by the Queen as a wedding gift in 1981 and now back in the royal collection. Or there’s the Cartier Halo Tiara that Kate wore on her wedding day and Princess Margaret’s Papyrus Tiara which Kate opted for when see attended a diplomatic reception at Buckingham Palace in 2013.</p><p>But if pattern repeats itself – Kate’s engagement ring and outfits that she’s worn that pay homage to Diana – then we think it just might be the Spencer Tiara.</p><p><strong>Related links:</strong></p><p><span style="text-decoration: underline;"><strong><em><a href="/lifestyle/family/2015/09/funny-twin-photos/">Hilarious twin photos in matching outfits</a></em></strong></span></p><p><span style="text-decoration: underline;"><strong><em><a href="/lifestyle/family/2015/06/secrets-of-happy-families/">8 things happy families have in common</a></em></strong></span></p><p><span style="text-decoration: underline;"><strong><em><a href="/lifestyle/family/2015/06/raise-happy-granddaughters/">How to raise happy healthy granddaughters</a></em></strong></span></p>

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