- Originally posted by dacium:
What I mean is that if people have debts already they struggle really badly.
$39k per year is about $576 per week. $200 rent. $125 car payment. $80 other car costs (fuel, insurnace, rego). $40 bills (elec. phone. etc). Food $100. HECS $30. That leaves $0. Maybe $100 if you used share accomidation and paid $100 a week rent. Either way a loan repayment, you can only afford may $200 per week. That only covers interest on about $135k loan.
I was on $39k and I saved over $30k in 2 years so it can be done, but i had no car loan and $50 rent. It can be done sure, but something is wrong with society when kids have to do this out of school, where none of this is taught.
What about the car payment? $125 per week ($541 per month) is one serious car.
You don’t need a car, and if you do, you don’t need an expensive one. Five grand will be more than enough.
And what about the rent? you can get a 1 bed unit for about $140 per week unless you want to live absolutely in the ‘cafe district’ (even less if you board somewhere), or spend about $10-15 more for a 2 bed and rent out one bedroom to a mate or stranger.
No-one holds a gun to your head and says “you must have the best of everything straight out of school and/or rack up thousands of credit card debt”.
It is YOUR choice.
Don’t feel sorry for Peter Hutchy – the guy’s got a Bachelor of Business. He’s earning better than most 24 year olds, and as a bank officer has access to very cheap finance I’m tipping, has a degree in making money and is still whinging.
I do agree with you about not being taught this stuff in school though; it is needed.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
I agee with LA…there’s no point in being bitter about your situation…house prices are quite unaffordable at the moment but that’s just the way it is…I’m too from your generation but i don’t complain about it, I just find ways to try to get ahead…i’m 27 and have been living at home until last year…I was earning an average wage but still managed to scrape enough $$$ to buy my first IP…I did this by living at home and make sandwichs for lunch, giving up alcohol etc…you’d be surprised at how much you can save if you give up a few things…
and last year I took a job offer in the bush for a 50% payrise and I managed to talk them into paying rent for me….i admitt it’s pretty boring in the bush and I miss my friends/family…but it’s too good an opportunity to pass up…there’re opportunities to make more $$$ if you look around, like where i live is a mining town and young blokes/couples flock in from brisbane to make good $$$…most of them i’ve spoken to don’t like living here much but they stick it out for a few years to get ahead and move to the sunshine coast eventually…
no point in complaining, just try to put yourself in a better position…and as for baby boomers pushing house prices up, that’s a good thing…more inheritance for me!![biggrin]
Peter,
you are totally right, if you think you can’t you can’t.
If you think you can you can.
It is as simple as that, once you have the will you will find the ways to your means.
Have faith, believe, read some proverbs.Hi all, been following this thread with some amusement. At last, my 2 cents worth.
Peter & others of like ilk, houses are commodities, just like bananas. You don’t like the producers’ prices, grow your own.
Investors as such, do not push up prices. Don’t they wish they could!!
I’ve discovered that the government is the biggest owner of land & they are the biggest seller. They sell a block of land to me for $120000, it costs me $160000 to put a house on it, hey presto, that house cannot be less than $300000 because there’re other costs as well.
The fact of the matter is that no government can support the housing needs of an entire nation, even socialist governments have found out to their cost.
Therefore to all who are concerned, I say ‘Wake up & solve your own housing needs.’ It is NOT someone else’s responsibility.
Have a good day,
Kum YinHi,
I am just curious if Peter Hutchy is still reading his own thread, because it seems like he has no more input into this issue.
Regards
Daniel Lee [specs]Hey Pete;
looks like you were right after all!http://www.news.com.au/business/story/0,23636,21312475-31037,00.html
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Here in Holland you can’t even buy properties under $250,000 and most rentals are under $160/week because of controlled rents. Land for building is upwards of $375/m2 and hardly available. Starters can’t afford a house unless their parents lend money. Still get a decent cashflow by getting off the beaten track. You have so much land and so many fix-up properties you don’t even realize how many investment opportunities you have. Open your eyes.
I think a good deal of the problem is 1. People have forgotten how to live within their means (whatever those means are) and 2. To start small.
It always fascinates me how people pop up on ACA/Today Tonight obese, smoking, with a beer in their hand and say they are ‘battling’.
Duh. Stop smoking/cut back drinking/go for a walk. Get a job. Save. I totally agree when older people think younger people should stop complaining (and I aint old). I have lost track of the number of times people my age say they cant buying anything cos its too expensive. And then find out they are only looking at 3 bedroom houses within a 5 km radius of the city. Then they refuse to buy anything smaller/cheaper cos ‘I dont want to live there’.I bought a one beddie in the daggiest suburb imaginable. People laughed. Renovated on the cheap and stopped spending on crap I dont need. Rent doubled in 2 years. Flat got revalued at an extra $40,000. Wouldnt you know it – people stopped laughing and I get told all the time how ‘lucky’ I got. Will repeat process next year as the rent I get will make it totally CF+
It is totally possible. And I say that having completely stuffed around in my 20’s!
Marc ( L A Aussie) with the news article you supplied me with more or less proving my problems, what am I to make of it?
This is a load of crap…there are much easier entries into property, but people are being held back, as I once was, by not being creative with sourcing loans and living beyond their means….I mean $125 for car payments for a week???? Get a grip on reality…
""Flat got revalued at an extra $40,000. Wouldnt you know it – people stopped laughing and I get told all the time how 'lucky' I got."""
This is so true…. How people can winge and moan and if you save, go out and give it a go (property) and then make some decent money. Then get "GOT LUCKY!" No, i made it happen!!!!
Hey foundation.
Wow just read your post. And i was going to have kids in the near future. No point hey.May as well shoot myself now while i can still afford the bullet.Sorry to sound like a smart ass but wow.According to your calculations life as we know it is about to end.Scary stuff.Foundation, I am new to the property market (very new only have PPOR no IP, working on it). I read your response to Peter with interest but could not follow all of it (some of went over my head). can you please spell out the long and short of for us newcomers.
thanks
Lostie (by name, not necessarily by nature)
devo76 wrote:May as well shoot myself now while i can still afford the bullet.Sorry to sound like a smart ass but wow.According to your calculations life as we know it is about to end.Scary stuff.What a strange and immature response.
If anything I've written is demonstrably wrong, feel free to refute it. You have many tools available to you; primarily rational reasoning, logic, empirical evidence. Sarcasm, exaggeration and deliberate misinterpretation of my words makes you look inept and petty, while doing no harm to my proposition(s).
Here’s an example. I might say to you:
“Make no mistake about it Devo my boy, an unsustainable trend in debt is the driving force of our economy today and will be the most influential factor in our economic future over the next decade or so (either by its continuation or by its absence).”You might try to refute this statement, but you’d have a hard time trying. That debt growth is following an unsustainable trend is proven beyond doubt. That without this unsustainable trend our economy would be in recession is adequately arguable on empirical grounds, and certainly stronger than any counter-argument. Thus, the (continuation or absence of this) unsustainable trend will decide whether we will have an economy of growing or declining productivity in the future.
Given that the very definition of unsustainable is that it cannot be sustained, I’ll leave you to make your own assessment of the probabilities of various futures.
Don't forget that a back-of-the-fag-packet calculation can indicate roughly the percentage impact on house prices that a slowing of debt growth to a sustainable rate would have. Do report back when you're done!
lostie wrote:can you please spell out the long and short of for us newcomers.
Lostie (by name, not necessarily by nature)Hi Lostie. Everything you need to know about this subject can be found on Steve Keen’s Debt Deflation blog here:
http://debtdeflation.com/blogs/SK is a mathematician and professor of economics, so some of his work is very technical, but his argument is sound and his blog itself is an easy read. Check through the comments and you’ll find I’ve tried to make my point over there too (probably better so than here). There are also plenty of clever people reading there, so anything you don’t understand can be sorted out with a quick question. Oh, and PM me – I’ll link you to an interesting site.
If you don't feel like checking out those sites, I'll break it down to "the short" as you requested:
The past 30 or so years of house price growth has been dependent on an unsustainable trend in debt growth. This trend is reaching it's limit. Anybody who is basing their expectation of house price growth over the next 30 years on their experience or knowledge of house price growth over the last 30 years is deluding themselves.
Cheers, F. [cowboy2]
And even if they turn out not to be entirely deluding themselves, they might simply be abusing mathematics. For example, by assuming house price growth is exponential* (based on a poorly fitted historical function), and entirely disconnected from real drivers, such as wage growth…
* An example of this would be parroting "house prices double every seven to ten years", which not only assumes exponential growth, but assumes that only price and time are relevant. Something like "historically, house prices have tended to track slightly higher than wages, but this gap has been bridged by increasing mortgage debt" would be more accurate…
Anybody needing a refresher on exponential (compound) growth versus other functions? Here ye go:
Next time somebody tells you that house prices have "grown by 9% per year on average over the last 10 years", ask them to point to which one matches house price growth…
Cheers, F. [cowboy2]
peterhutchy wrote:Marc ( L A Aussie) with the news article you supplied me with more or less proving my problems, what am I to make of it?It is telling you what you keep saying; it's all too hard.
As I said; I guess you were right after all.
As others have already said; if you think you can't, then you can't.
The only problem is, it's just a news story, generalising and being sensational as news stories are to get readers, but if the right (or wrong) people read these stories, then they start to believe them.
You can make of it what you like; are you going to say; 'yeah; I told you so' or are you going to say 'well, I don't agree and I'm going to make it happen for me.'
Get out there and find a way to make it happen.Perhaps we are expecting too much too soon?
I didn't even think to buy my first home until i turned 30.
We should stop blaming governments, baby boomers, anyone and anything.
We all have to do the hard work and try to save for our first deposit (no home owners grant in my time).
By the way, there are stacks of homes/units in the outer east of Melbourne for around $250,000 to $300,000.
eg. Ferntree Gully, Boronia, Croydon, Moorolbark.
Believe it or not, we have all facilities out here, even train transport to the city.
Yes and even coffee shops.
so what is the problem?foundation wrote:devo76 wrote:May as well shoot myself now while i can still afford the bullet.Sorry to sound like a smart ass but wow.According to your calculations life as we know it is about to end.Scary stuff.What a strange and immature response.
If anything I've written is demonstrably wrong, feel free to refute it. You have many tools available to you; primarily rational reasoning, logic, empirical evidence. Sarcasm, exaggeration and deliberate misinterpretation of my words makes you look inept and petty, while doing no harm to my proposition(s).
Here’s an example. I might say to you:
“Make no mistake about it Devo my boy, an unsustainable trend in debt is the driving force of our economy today and will be the most influential factor in our economic future over the next decade or so (either by its continuation or by its absence).”You might try to refute this statement, but you’d have a hard time trying. That debt growth is following an unsustainable trend is proven beyond doubt. That without this unsustainable trend our economy would be in recession is adequately arguable on empirical grounds, and certainly stronger than any counter-argument. Thus, the (continuation or absence of this) unsustainable trend will decide whether we will have an economy of growing or declining productivity in the future.
Given that the very definition of unsustainable is that it cannot be sustained, I’ll leave you to make your own assessment of the probabilities of various futures.
Don't forget that a back-of-the-fag-packet calculation can indicate roughly the percentage impact on house prices that a slowing of debt growth to a sustainable rate would have. Do report back when you're done!
lostie wrote:can you please spell out the long and short of for us newcomers.
Lostie (by name, not necessarily by nature)Hi Lostie. Everything you need to know about this subject can be found on Steve Keen’s Debt Deflation blog here:
http://debtdeflation.com/blogs/SK is a mathematician and professor of economics, so some of his work is very technical, but his argument is sound and his blog itself is an easy read. Check through the comments and you’ll find I’ve tried to make my point over there too (probably better so than here). There are also plenty of clever people reading there, so anything you don’t understand can be sorted out with a quick question. Oh, and PM me – I’ll link you to an interesting site.
If you don't feel like checking out those sites, I'll break it down to "the short" as you requested:
The past 30 or so years of house price growth has been dependent on an unsustainable trend in debt growth. This trend is reaching it's limit. Anybody who is basing their expectation of house price growth over the next 30 years on their experience or knowledge of house price growth over the last 30 years is deluding themselves.
Cheers, F. [cowboy2]
Well ok. Lots of big words in there that a little boy like me has trouble following. Back to the sand box for me. Do not respond to me like im some uneducated 16 year old. If you were to know me you would eat many of your words. I was making a point that you seem to be a "glass is half empty" kind of person. Where you see the worst case scenario many see the best. I believe the truth to be in the middle somewhere.After all that i find your post very interesting and worth investigating as to go into anything blind and not consider all outcomes, you are setting yourself up for a fall.
"Where you see the worst case scenario many see the best."
Correction: I see a range of potential outcomes, but limit my maximum expectation ("the best") to one that is possible. If other people choose to believe in a scenario that is impossible, that's their choice. I'd call this kind of thinking delusion, but if you're happy to see it as healthy optimism I'll not argue with that!
F. [cowboy2]
foundation wrote:"Where you see the worst case scenario many see the best."Correction: I see a range of potential outcomes, but limit my maximum expectation ("the best") to one that is possible. If other people choose to believe in a scenario that is impossible, that's their choice. I'd call this kind of thinking delusion, but if you're happy to see it as healthy optimism I'll not argue with that!
F. [cowboy2]
I see your point entirely and i feel you do a good thing for people on this forum showing them the up and down side to property investing but you have to admit. Its a gloomy outlook.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
