# Australia's high personal debt



## Ald123 (7 March 2016)

So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.


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## Gringotts Bank (7 March 2016)

Ald123 said:


> What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




More debt, until it all implodes.

Turnaround might require a large cultural shift away from the very popular "if I achieve x and acquire y, then I will finally feel full/satisfied/loved/peaceful/happy".


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## moXJO (7 March 2016)

Recession.
Probably needed it 10 years ago.


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## luutzu (8 March 2016)

Ald123 said:


> So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




More free trade agreements; Less red tapes; Less environmental protection; Less tax so we'd be as "competitive" as other nations in not taxing; lower the legal working age to 10 - those kids better earn their way and learn that the state is no nanny...


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## Tisme (8 March 2016)

luutzu said:


> More free trade agreements; Less red tapes; Less environmental protection; Less tax so we'd be as "competitive" as other nations in not taxing; lower the legal working age to 10 - those kids better earn their way and learn that the state is no nanny...




Yes standard of living aspirations are so overated ....we should take a leaf from our neighbours on how to be happy and prosperous.


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## Monkey C Doo (9 March 2016)

Ald123 said:


> So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




What's the old saying...

"there are only two ways to generate true money - you farm it or mine it"  (something like that?)

We only have so much viable mineral resources and productive farmland - once the capacity of these resources are overtaken by the population we will become like Greece. 

But with any luck climate change will turn the vast wasteland of Australia's interior into productive farmland. It's a long shot but if the butterfly effect can do its magic on the climate models, Aust. will be king of the world.

So, as long as we can keep exporting "stuff" the Government can keep subsidising the average joe blow zombie out there and we'll all be happy. Population growth can continue, house prices will keep up ect...

If a we can generate free money by mining / farming faster than the others in the world - the party will go on.


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## luutzu (9 March 2016)

Monkey C Doo said:


> What's the old saying...
> 
> "there are only two ways to generate true money - you farm it or mine it"  (something like that?)
> 
> ...




Let's not hope for Climate Change so Australia can grow shall we?

For one, it will create more refugees and Nauru will have gone under along with all them potential Pacific solution. May need to ship them off to what few hilltops that was Tasmania. That or Indonesians will start rowing over and our submarines can only do so much.


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## luutzu (9 March 2016)

Tisme said:


> Yes standard of living aspirations are so overated ....we should take a leaf from our neighbours on how to be happy and prosperous.




For sure. Going the way of them tigers and dragon works wonders for the some part of the country and a handful of them people. Wait, we're there already aren't we?

Not yet? I guess cheap airfare and freedom to crack jokes at our dear leaders is enough to show those whiny Aussies how much better they have it compare to them black haired folks.


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## PZ99 (8 June 2018)

Interesting article > http://www.abc.net.au/news/2018-06-08/australia-pipped-by-switzerland-for-debt-world-title/9844518


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## PZ99 (4 July 2018)

*Credit card users struggling under mountain of debt that may never be repaid, ASIC report shows*

One in six consumers is struggling under a mountain of credit card debt that might never be repaid, according to alarming research by the corporate regulator.

*Key points:*

New report by ASIC shows that Australians owe $45 billion in credit card debt
More than one in six Australians — around 1.9 million people — are struggling to repay their debt
Despite new regulations in 2012, not all credit providers are proactive in countering persistent debt
The Australian Securities and Investments Commission (ASIC) report showed 18.5 per cent of consumers were overwhelmed by their credit card debt load with outstanding balances now totalling $45 billion.

The study said banks and credit card companies were in the midst of a revenue bonanza with interest being reaped on $31.7 billion of that $45 billion debt figure.

http://www.abc.net.au/news/2018-07-...users-struggle-under-mountain-of-debt/9936826

My GF is caught up in this brainfartiyessness. It beggars belief. I told her to join ASF and win every tipping comp for the next 12 months if she thinks money can grow on trees this easy...

Presumably it's just consumers following the logic of spending by the last few federal Govts


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## moXJO (4 July 2018)

PZ99 said:


> *Credit card users struggling under mountain of debt that may never be repaid, ASIC report shows*
> 
> One in six consumers is struggling under a mountain of credit card debt that might never be repaid, according to alarming research by the corporate regulator.
> 
> ...



It is a worry. I wonder if the decline of cash and the rise of online and tap and go payments are the major offenders. Easy credit doesn't help.


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## sptrawler (4 July 2018)

Ald123 said:


> So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




The Australian dollar has to drop a lot in value. Easy if you have a regulated currency, not so easy if your currency is floated, then you have to wait for the markets to do it.


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## Value Collector (4 July 2018)

Ald123 said:


> So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




Money isn't wealth, money is just a unit of exchange.

Australia is a very rich nation, we have lots of wealth, Sure not every Australian feels "wealthy", but in general they are consuming products and services at rates that would make most other countries drool with envy, and make our ancestors from 100 years ago blush.

Most "poor" Australians are not "poor" by global standards.



> What is going to cause these people to have all of a sudden extra wealth that will then be invested?




If you compare what Australia looked like in 1788 when the first fleet arrived, and compare it to the real wealth we have now, it's night and day. As I said real wealth is not money, its the real installed assets and working capital of the nation.

Anyone can build up an ownership stake in the real wealth of Australia if they want to, But if you are just focussing on taking on debt so you can consume more, obviously you won't. 

And if debt is offset by real assets, it kind of cancels its self out, the total debt figure doesn't tell you anything, eg if some one borrowed $5000 to buy solar panels, then the debt would show up as personal debt but there is a productive assets thats been generated that will contribute more than $5000 over its life back to the Australian economy.


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## Value Collector (4 July 2018)

This video shows how you can really set yourself up by not trying to keep up with the jones and earning interest rather than paying interest.

I know the guys rate of 12% is a bit high, but the principle is sound, if parents taught their kids methods like this, we could cut out the hyper consumption based debt, and build families real wealth.

Here is how to get "Free cars" for life.


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## sptrawler (4 July 2018)

Value Collector said:


> Money isn't wealth, money is just a unit of exchange.
> 
> Australia is a very rich nation, we have lots of wealth, Sure not every Australian feels "wealthy", but in general they are consuming products and services at rates that would make most other countries drool with envy, and make our ancestors from 100 years ago blush.
> 
> Most "poor" Australians are not "poor" by global standards.




Credit cards just enable people to spend their pay, before they get it, then wonder why they can't afford the 'stuff' they want to buy on payday.

It really has brought about a society, who want 'it' and want 'it' now, without respecting the fact that they will have to pay for 'it' sooner or later.

But as you say VC, in comparative terms, we have never been wealthier.
Even those on welfare, if they manage their money wisely, can get by.
Most Countries of the World have no welfare, if you don't work you don't eat, if you don't eat...
Credit as recently as the 1970's, was extremely difficult to access, therefore people were forced to live within their means.
With the deregulation of the financial systems, the access to credit has become easier, to some it is difficult to control the urge to use it for whatever the purpose.
Some use it to make ends meet, but if they weren't making ends meet before putting it on credit, why do they think they will be able to when the bill comes in.
Some use it to gamble on winning, but double their loses, if they loose.
So is the answer, to just stop credit cards and only have debit cards?
Go back to the days, when you had to apply for a personal loan to get credit, at least then it takes more effort, than pointing your mobile phone at an eftpos machine.
The Government, Banks and retail sector, would spew.
It won't happen they love people being in debt, much easier to control people, who have their head down and ar$e up.
Then your political debate can revolve around, he/she called me a name, this politician's grandfather was born overseas, makes politics easy.
You don't have to address the 'Big Issues'.


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## Value Collector (4 July 2018)

sptrawler said:


> Credit cards just enable people to spend their pay, before they get it, then wonder why they can't afford the 'stuff' they want to buy on payday.
> 
> It really has brought about a society, who want 'it' and want 'it' now, without respecting the fact that they will have to pay for 'it' sooner or later.




Yep, I agree.

Back in the day you had to go and Hock an Item at the local pawn shop if you wanted to spend more than you earned that week.

Not only was Hocking stuff harder logistically, there was social stigma.

But credit cards allow people to over spend without the social stigma, and its easy.



> Some use it to make ends meet, but if they weren't making ends meet before putting it on credit, why do they think they will be able to when the bill comes in.




Not to mention that people have more "ends to meet", no one wants to reduce their life style, they are quite happy to spend 10% more than they earn each week, but eventually that debt incurred each week gets very heavy.

As I said, we need to just teach people to live on 90% rather than 110% of their earnings, and they will get richer and richer as time goes on, otherwise they explode.

and the credit card companies don't care if you explode 10 years down the track, because at 25% interest, + transaction fees, they are well ahead anyway, especially if you never explode and just limp along for life.


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## SirRumpole (4 July 2018)

sptrawler said:


> But as you say VC, in comparative terms, we have never been wealthier.




Paying off a mortgage is getting harder, but some can do it.

https://www.domain.com.au/news/its-...-retirement-than-ever-before-20170407-gvcylg/


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## Value Collector (4 July 2018)




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## Value Collector (4 July 2018)

SirRumpole said:


> Paying off a mortgage is getting harder, but some can do it.
> 
> https://www.domain.com.au/news/its-...-retirement-than-ever-before-20170407-gvcylg/




Even if you hit retirement with some debt on your home, you will probably still be better of than a renter.

A Lease is still a debt, and once you get over the midway point through your home loan, the interest cost on the loan is much smaller than the lease costs.


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## sptrawler (4 July 2018)

SirRumpole said:


> Paying off a mortgage is getting harder, but some can do it.
> 
> https://www.domain.com.au/news/its-...-retirement-than-ever-before-20170407-gvcylg/




Another funny thing is, in the poorest Countries, home ownership is amongst the highest in the World.

https://www.worldatlas.com/articles/countries-with-the-highest-home-ownership-rates.html

So it isn't all, just about, what you earn.


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## sptrawler (4 July 2018)

Value Collector said:


> Even if you hit retirement with some debt on your home, you will probably still be better of than a renter.
> 
> A Lease is still a debt, and once you get over the midway point through your home loan, the interest cost on the loan is much smaller than the lease costs.




I guy I know is 62 still working, still renting at $400/wk and really angry.
We were having a beer, so I knew it was none of my business, but I thought what the hell we get on o.k.
I asked if he had any savings, he said about $20k. I said what about super, he said if he works to 67, he'll have about $320k-$350k
I said, at the moment you can pick up a duplex close to Perth, for $160,000. Why not buy one, cheaper than rent and pay it off when you retire.
Well he looked at me as if I had two heads, and said I must be some sort of idiot, he would rather rent and have the cash.
Maybe he is unusual, but from all the people I have worked with(blue collar), I'm amazed how many don't buy a house, or are still paying it off 30yrs later.


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## tech/a (4 July 2018)

Wow that is amazing.
Its pretty clear why he only has around $20K.
Hasn't he heard the saying
2 heads are better than 1!


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## Value Collector (4 July 2018)

Value Collector said:


>





For me the saddest part of this video is that my Inlaws are examples of "revolvers" that are described in this video, as a couple they earn a little over $100K a year, but they over spend on life style.

In the 15 years I have known them, they have not reduced their home loan, because they keep drawing out "equity" to fund holidays and toys, their credit card debt has grown and most of the time they simply pay the minimum, they byy things on silly hire purchase deals etc, and car loans never get paid off because newer cars are always bought, even today they are planning what they will buy when their couch is paid off in 6 weeks.

However they are now at the age where their bodies can't handle their work, and they are really struggling, which is leading to medical bills going on credit cards while their income is getting shaky.

For years I tried to get them to see the benefits of living more frugally and building up an investment base, But was firmly told one day to stop "Preaching" so since then I have resided to watching the train wreak unfold, It's sad but there is nothing I can do now.


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## Lantern (4 July 2018)

I can honestly say I owe nothing. Everything is paid. 
Was taught very early on if you look after the pennies then the pounds look after themselves.


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## sptrawler (4 July 2018)

Value Collector said:


> For me the saddest part of this video is that my Inlaws are examples of "revolvers" that are described in this video, as a couple they earn a little over $100K a year, but they over spend on life style.
> 
> In the 15 years I have known them, they have not reduced their home loan, because they keep drawing out "equity" to fund holidays and toys, their credit card debt has grown and most of the time they simply pay the minimum, they byy things on silly hire purchase deals etc, and car loans never get paid off because newer cars are always bought, even today they are planning what they will buy when their couch is paid off in 6 weeks.
> 
> ...




My parents where just like that, Dad always earned above average wages, was always a workshop supervisor. They spent everything they earned and then some.
Maybe that's what drove me, to get to the position I'm in?
I know I always thought, there is no way, I want to end up on the bones of my ar$e.
Many of my mates comment on how frugally we lived, to get ahead, our first house was a 50 year old weatherboard and tile, that someone wanted removed from a block..
It had the roof removed, was chopped in half, chucked on the back of a couple of trucks and re stumped on a block 200klm from Perth.lol
There was many a BBQ and beer day, when the mates came to give me a hand to fix it, I was 25 had 3 kids and could take on the World.
Ah, great days, life was simple then so were our wants. Times have changed.


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## sptrawler (4 July 2018)

SirRumpole said:


> Paying off a mortgage is getting harder, but some can do it.




The problem is, buying a house requires sacrifice, it requires self discipline and it requires foregoing things that you would like to have.
There are a lot of people who don't want to do that, it doesn't make them wrong, it just means they don't have a house and as comfortable retirement.
From their perspective, they have had a great time spending their money on holidays, cars, consumables and lifestyle, while they are young and healthy.
They may see their friends who have saved and done without, that own their own home at retirement, then drop dead soon after as crazy.
Just because we choose to do life one way, doesn't mean it is for everyone, life is about freedom of choice.
What annoys me, is when I have to pay for their choices, as well as my own even after I retire.


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## luutzu (4 July 2018)

How do you guys define personal debt? 

I think some economist define it as also including the mortgage/s. 

But either way, the current high level of personal debt [excluding the high housing prices] are not just because Australians are more reckless than before. A lot of factors beside personal responsibility and easy credit are also at play... and if we're similar to the data I saw from the US, the high level of personal debt have more to do with stagnant wages, higher and ever rising costs of living etc., than gambling or free-spending.

I mean, of course there are people who would rather spend than save; and if credit is easy, as they are, they would put things on the card rather than save up for it. But yea, willing to bet that those aren't the main contributing factors to today's high level of personal debt.


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## sptrawler (4 July 2018)

luutzu said:


> I mean, of course there are people who would rather spend than save; and if credit is easy, as they are, they would put things on the card rather than save up for it. But yea, willing to bet that those aren't the main contributing factors to today's high level of personal debt.




How much would you like to Bet?
If they paid for it, they wouldn't have debt. If they borrowed, on the expectation of a pay rise, lowering the exposure, that's gambling or speculation.
If, when they borrowed they allowed for the worst case scenario, they wouldn't be distressed.
You have a noble outlook and a humble, humane view of people, that if a person is in a financially challenged position it is never of their making.
When most financial data shows, most people spend very little time, thinking about their financial position until it hits them.


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## Value Collector (4 July 2018)

luutzu said:


> How do you guys define personal debt?




To me, "Personal debt" would be any debt held by a person that accrued due to personal consumption or living expenses, In my mind I would separate that from business of investment debt.

eg. Buying a car for personal use is personal debt, while buying a car to use for Uber I would not class as personal debt, I would say that is Business debt.

But I think the figures would show both cars as being "personal debt"

There is also a grey area, Eg Solar panels, borrowing $5000 K for solar panels on your home, is technically an annuity style investment, buts its all for personal use, So its a bit of both.

-----------------------

Also, I am in the money lending business, If I loan some one $15,000 to buy a car, the figures will show National personal debt went up by $15,000.

But really as a country the position didn't change, because my $15,000 asset on my balance sheet offsets the $15,000 liability on theirs, the net position is the same, all that has happened is I have let some one else spend my savings, in the hope they repay me with a decent interest rate.


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## luutzu (4 July 2018)

sptrawler said:


> How much would you like to Bet?
> If they paid for it, they wouldn't have debt. If they borrowed, on the expectation of a pay rise, lowering the exposure, that's gambling or speculation.
> If, when they borrowed they allowed for the worst case scenario, they wouldn't be distressed.
> You have a noble outlook and a humble, humane view of people, that if a person is in a financially challenged position it is never of their making.
> When most financial data shows, most people spend very little time, thinking about their financial position until it hits them.




betting my usual imaginary $5 

I'm not disagreeing with you gents that there are people who are reckless and irresponsible. I know quite a few. Was just pointing out that there are also people who got into financial trouble because no matter how frugal or how hard they work, they just couldn't get ahead. 

Maybe some of them didn't have the right upbringing or gave up saving after a few setbacks, who knows. But I know people who just suffer some bad luck and without help would have gotten into a downward spiral.

But yea, the stats in the US I quoted earlier... it's not just personal spending and recklessness that's causing the high level of private debt. I'm betting it's a similar pattern in Australia. 

Costs of living, housing, low wages for most people... Some turn to Uber after their dayjob to try and earn a few extra bucks; some have to take out credit cards to pay the bills. Then things happen.


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## sptrawler (4 July 2018)

luutzu said:


> betting my usual imaginary $5
> 
> I'm not disagreeing with you gents that there are people who are reckless and irresponsible. I know quite a few. Was just pointing out that there are also people who got into financial trouble because no matter how frugal or how hard they work, they just couldn't get ahead.
> 
> ...



Like I said, you have a wonderful underlying belief if people, it is admirable.

There is a reason, that Australia is known as the land of opportunity, if someone is prepared to get stuck in they can get ahead.
This may mean, working in a place like Walgett, Meekatharra or somewhere in the outback, but if you try there is reward.
Already here in W.A there is a huge shortage of workers again, yet our population has grown, but the road repair company my D.I.L works for can't get lollipop people.
Why you ask, because it is out in the Goldfields, no one wants to leave the City.

Which leads to the obvious, they can't afford a house in Perth, can't get a job in Perth, but won't leave Perth.
Which then means you and I have to be taxed more, to pay more welfare, because they can't afford to live in Perth on the existing welfare.
Meanwhile we bring in 457 visa lollipop people.


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## Value Collector (4 July 2018)

luutzu said:


> Was just pointing out that there are also people who got into financial trouble because no matter how frugal or how hard they work, they just couldn't get ahead.




I really doubt that, of course mis fortune happens with sickness and bad luck etc.

But barring that, I find it very hard to believe that some one can be genuinely frugal, and genuinely hard working and not be able to get by and build up some savings.


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## Value Collector (4 July 2018)

I even here people whinge about the cost of food and say Coles and Woolies are rip off's.

But a Truly frugal person should be able to provide a family of four with more than enough food for $100 or less per week.


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## SirRumpole (4 July 2018)

Value Collector said:


> But a Truly frugal person should be able to provide a family of four with more than enough food for $100 or less per week.




I doubt that. I'm living alone, eat one meal a day and still pay $100 plus. And of course as well as food there are other sundries like cleaning fluids, personal items, loo paper etc.


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## luutzu (4 July 2018)

Value Collector said:


> I really doubt that, of course mis fortune happens with sickness and bad luck etc.
> 
> But barring that, I find it very hard to believe that some one can be genuinely frugal, and genuinely hard working and not be able to get by and build up some savings.




Maybe that's because you haven't walked the other side of the track. 

I'm sure we all have savings. Just not savings enough to call it "wealth" though.

I know plenty of people who, as far as I know, aren't living it high, aren't at the pokies all day but aren't living in their own house or owning the latest model Ford. 

There's my dad's neighbour. White Ausie, late 50s. He was a self-employed tradie; work here and there for big companies in his younger years. Said he could never managed to save up enough of a deposit to buy a house. Missed out twice on a deposit because each time he goes out to the bank, they said he need more deposit because his job aren't stable... then when he saved up enough, property shoots up so would need a larger deposit.

Soon after that he just doesn't see the need. Gave up. 

Maybe we can say he shouldn't have, but yea... you can understand why. He's still renting; still working a couple part-time jobs to make ends meet. 

I'm sure he have savings. But not the kind of savings a bank manager would offer him a free capucinno whenever he visit though. 


Also know another older lady. Her parents died in the war, she being the oldest she have to sacrifice her education, get work to raise her younger siblings. She was practically a single mother. No husband. I'm sure she would have some saving, but again, not "wealth". 

Also know a pretty rich guy. Nice and decent enough I suppose. He like new BMWs, branded clothing, latest electronic gadgets. Not faulting the guy, simply pointing out that some people can be rich, have plenty of wealth... and aren't exactly the most responsible in spending their cash. 

I guess what I'm trying to get at is the fact that wealth and indebtedness aren't always due to the wealthy being more responsible and frugal while those who are in debt or have no wealth must have been reckless and lazy.


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## luutzu (4 July 2018)

Value Collector said:


> I even here people whinge about the cost of food and say Coles and Woolies are rip off's.
> 
> But a Truly frugal person should be able to provide a family of four with more than enough food for $100 or less per week.






I take it you haven't done the shopping lately? And not buying for 6?


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## sptrawler (4 July 2018)

luutzu said:


> Maybe that's because you haven't walked the other side of the track.
> 
> I'm sure we all have savings. Just not savings enough to call it "wealth" though.
> 
> ...




That sums up most of my mates life story.
Like I said, you are a lovely bloke.
Maybe there is someone who could let him put a granny flat, or caravan on their block.
I have helped one of my family, by putting a granny flat on my property.


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## luutzu (4 July 2018)

sptrawler said:


> That sums up most of my mates life story.
> Like I said, you are a lovely bloke.
> Maybe there is someone who could let him put a granny flat, or caravan on their block.
> I have helped one of my family, by putting a granny flat on my property.




He's planning on moving North to semi-retire. Said the school he know up there have a job for him; property is cheaper too so he could, hopefully he said, finally have his own place. 

But yea, I'm too poor to help him, or anyone. If I do, they'd be suspicious about my intend


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## Value Collector (4 July 2018)

luutzu said:


> Maybe that's because you haven't walked the other side of the track.




I got to where I am now by living frugal in my 20's




> I know plenty of people who, as far as I know, aren't living it high, aren't at the pokies all day but aren't living in their own house or owning the latest model Ford.




Are they Genuinely frugal? or are they frittering away money behind the scenes on countless things that go under your radar.




> There's my dad's neighbour. White Ausie, late 50s. He was a self-employed tradie; work here and there for big companies in his younger years. Said he could never managed to save up enough of a deposit to buy a house. Missed out twice on a deposit because each time he goes out to the bank, they said he need more deposit because his job aren't stable... then when he saved up enough, property shoots up so would need a larger deposit.
> 
> Soon after that he just doesn't see the need. Gave up.




If he were genuinely hard working and frugal, and just invested in an index fund, he could have over $1M in his late 50's.

However, if just fritters away money, we won't, its simple at that, nothing structural against him, its all behavioural.




> Also know another older lady. Her parents died in the war, she being the oldest she have to sacrifice her education, get work to raise her younger siblings. She was practically a single mother. No husband. I'm sure she would have some saving, but again, not "wealth".




I bet she lived better than her grandparents.


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## luutzu (4 July 2018)

Value Collector said:


> To me, "Personal debt" would be any debt held by a person that accrued due to personal consumption or living expenses, In my mind I would separate that from business of investment debt.
> 
> eg. Buying a car for personal use is personal debt, while buying a car to use for Uber I would not class as personal debt, I would say that is Business debt.
> 
> ...




I heard from a couple of economists, one of them being Steve something, Keene? - that Aussie property bear guy...

He was saying that when a bank lend out money for a mortgage, they simply write up the asset/liability in their books. And that create the wealth. That they didn't collect savers and investor's capital to lend out at all. 

Hmm... that is almost unbelievable but yea, heard it from a couple of sources. Is it true?


----------



## Value Collector (4 July 2018)

luutzu said:


> I take it you haven't done the shopping lately? And not buying for 6?




I do the shopping, and I could feed a family of 6 easily for $150 a week, as I said basic nutritious food is cheap, it's just there a multitude of options to over spend on that help people fritter away their money.

But if you shop well, and plan your meals, you can feed a family of four well for about $100 a week,


----------



## SirRumpole (4 July 2018)

Value Collector said:


> But if you shop well, and plan your meals, you can feed a family of four well for about $100 a week,




Prove it. 

Let's see your shopping list and prices.


----------



## luutzu (4 July 2018)

Value Collector said:


> I got to where I am now by living frugal in my 20's
> 
> Are they Genuinely frugal? or are they frittering away money behind the scenes on countless things that go under your radar.
> 
> ...




I spoke to an accountant recently and he said he doesn't invest in stocks. Have no interests in it. That he'd seen too many of his clients losing money on the thing. 

I was like,  .... 

Stocks aren't for everyone. Even an Index fund. 

In fact, I only know 1 person who think stock is something different from gambling. 

----

I don't know what habits and addiction they might or might not have, so can't say. But there are people who aren't wealthy because they have a habit of volunteering or giving their cash away to relatives or family members in need.


----------



## luutzu (4 July 2018)

Value Collector said:


> I do the shopping, and I could feed a family of 6 easily for $150 a week, as I said basic nutritious food is cheap, it's just there a multitude of options to over spend on that help people fritter away their money.
> 
> But if you shop well, and plan your meals, you can feed a family of four well for about $100 a week,




No you can't. 

And you can't feed them just literal bread and butter with a glass of tap water either alright?

I'm pretty cheap and I can't do it. Well, maybe I'd save a bit more if I plan things better but my plan always involve buying things with a bright yellow ticket next to it. Heck, I even count the cent per sheet of toilet paper to get the best bargain... and my wife have to tell me that not all apples are the same; so stop buying cheap ones all of the time


----------



## cynic (4 July 2018)

> ...
> 
> But if you shop well, and plan your meals, you can feed a family of four well for about $100 a week,



Yes. $100 can buy one a heck of a lot of rice.


----------



## Value Collector (4 July 2018)

SirRumpole said:


> Prove it.
> 
> Let's see your shopping list and prices.






Breakfasts -

$  7.00 - 1.5 Kg pack of weetbix (84 biscuits) 12 per day
$10.80 - 6 Litres of Soy milk (28 servings for weetbix)
$  3.00 - 2 loaves of bread (32 slices + 4 crusts) 4.5 slices per day
$  6.00 - toppings for toast (peanut butter etc)

Total 7 days of breakfast = $26.80

Lunch bases.

$  6.00 - 4 loaves of bread
$  3.00 - Ice berg lettuce
$15.00 - tomatoes, carrots, cucumber, hummus etc (purchased according to prices)
$  0.00 - Left over dinner foods.

Total 7 days lunch base = $24.00

Dinner bases

$  8.00 - 4 KG of rice ( 60 servings of rice 14 per person)
$  7.50 - 4 KG of potatoes or pasta ( 4 servings per person)
$  4.00 - Soy milk and Marg for mashing potatoes
$14.60 - 4 kg of frozen Veg ( 1 kilo person)

Total 7 days dinner base = $34.10


that leaves $15.10 to dress things up, or add some snacks.

for example.

If I spend $6 on green curry paste and coconut milk I can turn the rice and veggies into a thai green curry.

or $2 of pasta sauce and $6 of vegan mince or mushrooms can turn some of the pasta in bolognasie.

etc etc.

Basically you start with cheap staples and use your imaginations to dress it up.


----------



## sptrawler (4 July 2018)

Value Collector said:


> I even here people whinge about the cost of food and say Coles and Woolies are rip off's.
> 
> But a Truly frugal person should be able to provide a family of four with more than enough food for $100 or less per week.



I have just come home from doing the shopping with the wife, so i thought i would run that past her, if there is anyone who can do a tight food budget it is her.
We had 4 kids and lived as frugally as possible, here is her thoughts.

She said no, it isn't possible to feed a family of 4 on $100 more like $150, I asked why.
The main reason is the cost of fruit and veggies, bread, milk etc, meat isn't such an issue because you can use $7 mince as the base and a silverside and or a roast to break it up.

The other thing she said is, most young people today don't cook, or make cereal themselves.
Also they need to plan and buy to a menu, that is worked out over a fortnight, then repeated. This doesn't work in with today's society, she thinks.

I asked what sort of menu would you knock up? Here is what she used to make.

Breakfast. toast and porridge made from bulk oats dried raisings added when cooked apparently adds taste, don't buy pre packaged oats.

Lunch. sandwiches, polony and or a filler or jam.

Dinner. chilli concarne, spaghetti bog, mince rice and vegies, corned silverside(pressure cooked) + vegies (leaves cold meat for sandwiches), shepherds pie, leg of mutton roast(leaves meat for another day), tuna bake, egg bake, steaming fowl(pressure cook) use meat in chicken and spaghetti bog with touch of tabasco (use the stock for chicken soup).

Then she blew her top and asked if I'm planning on leaving or something.

Anyway it was an interesting shopping trip, thanks for the topic VC.

Just read your post below VC, the other thing she said was, you have to change it up and space the favourites out. Otherwise the kids get really anti.
I see with your menu, you are bringing up vegetarians.


----------



## Value Collector (4 July 2018)

sptrawler said:


> She said no, it isn't possible to feed a family of 4 on $100 more like $150, I asked why.
> The main reason is the cost of fruit and veggies, bread, milk etc, meat isn't such an issue because you can use $7 mince as the base and a silverside and or a roast to break it up..




If you eat meat you might need $150, but if you are vegan and really committed to being frugal to generate some savings for a while, $100 is do able.

$7 might get you some mince, but it would buy 4KG of potatoes or 8 Kilograms of rice or 3kg of frozen veg.


----------



## sptrawler (4 July 2018)

Value Collector said:


> If you eat meat you might need $150, but if you are vegan and really committed to being frugal to generate some savings for a while, $100 is do able.
> 
> $7 might get you some mince, but it would buy 4KG of potatoes or 8 Kilograms of rice or 3kg of frozen veg.




Yes, but then you are making the kids become something you believe in. 
I'm one of those people who just lets the kids chose their way. If they didn't like meat I wouldn't have given it to them, it wasn't as though they didn't reject brussel sprouts.

Same with religion, I'm confirmed C of E, but the kids aren't even christened. If as they grew up they chose to study religion, so be it, I would support them.


----------



## Wysiwyg (4 July 2018)

Value Collector said:


> Breakfasts -
> 
> $  7.00 - 1.5 Kg pack of weetbix (84 biscuits) 12 per day
> $10.80 - 6 Litres of Soy milk (28 servings for weetbix)
> ...



I hate that refrigerator ...


----------



## SirRumpole (4 July 2018)

Value Collector said:


> Breakfasts -
> 
> $  7.00 - 1.5 Kg pack of weetbix (84 biscuits) 12 per day
> $10.80 - 6 Litres of Soy milk (28 servings for weetbix)
> ...




What about the recommended 3 pieces of fruit per day per person ?


----------



## sptrawler (4 July 2018)

luutzu said:


> Heck, I even count the cent per sheet of toilet paper to get the best bargain...




You sound like my wife, I had to change the toilet roll holder, because this really big roll apparently is a lot cheaper/sheet. lol


----------



## luutzu (4 July 2018)

sptrawler said:


> You sound like my wife, I had to change the toilet roll holder, because this really big roll apparently is a lot cheaper/sheet. lol




A year's savings from those sheets should cover the initial cost of changing the holder. Every cent after that is pure profit my friend 

My wife bought this old style paper holder where you have to unscrew the bolt each time you want to change the roll. That's annoying but it has that bucket under it so each time I change the roll I'd just pull the bolt and the cardboard roll just drop into it. 

That's efficiency right? Then wait until it pile up before you take them all to the bin at once. 

She doesn't see it that way though.


----------



## luutzu (4 July 2018)

Value Collector said:


> If you eat meat you might need $150, but if you are vegan and really committed to being frugal to generate some savings for a while, $100 is do able.
> 
> $7 might get you some mince, but it would buy 4KG of potatoes or 8 Kilograms of rice or 3kg of frozen veg.




If you ever wonder why your wife sometime frowned and mutter to herself at breakfast, lunch and dinner... it's highly probable it all have to do with your choice of food. 

Mrs VC: He's buying himself a freakin Tesla yet here I am, eating Weatbix, toast with peanut butter; more toast and lettuce for lunch. Potatoes boiled or mashed. Day in, day out. I knew I should have married Bruce. The douche spent like a sailor but at least we won't be eating like it's the Famine


----------



## Smurf1976 (4 July 2018)

SirRumpole said:


> What about the recommended 3 pieces of fruit per day per person ?



Buy one apple and cut it into the same number of pieces as there are people in the household.

Now cut each piece into thirds.

There's your 3 pieces of fruit.


----------



## SirRumpole (4 July 2018)

Smurf1976 said:


> Buy one apple and cut it into the same number of pieces as there are people in the household.
> 
> Now cut each piece into thirds.
> 
> There's your 3 pieces of fruit.




You should be a tax accountant.


----------



## Smurf1976 (4 July 2018)

I think a big part of the trouble is that a large portion of the population has no idea how to apply even the most basic maths in their real world everyday life. For whatever reason people just don't seem capable of putting things into perspective in terms of annual costs or comparing multiple options.

I've come across many such people, many of them seemingly intelligent and with a decent education, but they haven't a clue how to put it into practice in the real world.

Do schools not teach this stuff these days?


----------



## SirRumpole (4 July 2018)

Smurf1976 said:


> Do schools not teach this stuff these days?




They seem more concerned with gender fluidity.

I've posted before about our pathetic ranking in literacy and numeracy.

39/41 OECD nations. No wonder the banks are putting it all over consumers.


----------



## luutzu (4 July 2018)

SirRumpole said:


> They seem more concerned with gender fluidity.
> 
> I've posted before about our pathetic ranking in literacy and numeracy.
> 
> 39/41 OECD nations. No wonder the banks are putting it all over consumers.




Both my kids are reading a year or two ahead of their grade. Their maths are, from my own estimate, about a year head too. 

So you welcome 

Goes without saying that we're somewhat luckier than other parents in that we can spend more time with them. Helping with homework and extra maths/English exercises. 

Other parents we know either don't have much time so they either send the kids to tutoring - which isn't cheap. $60 or so an hour? What! We spent a fraction of that on treats and outings for the extra studies.

With high level of debt, both parents busy and overworked to pay the bills, it's going to cost the next generation more than just dollar and cents. And that cost will eventually trickle out into the wider community and economy.


----------



## Smurf1976 (4 July 2018)

Much of this stems from people seemingly being incapable of critical thought. This then leaves them vulnerable to believing all sorts of nonsense designed to separate them from their money.


----------



## sptrawler (4 July 2018)

Smurf1976 said:


> Much of this stems from people seemingly being incapable of critical thought. This then leaves them vulnerable to believing all sorts of nonsense designed to separate them from their money.




I went to a retirement seminar a few years ago, It went for two days, at the end of the second day I thought well that was a waste of two days in my life.
I couldn't believe it when 90% of the people were blown away with it, they thought it was earth shattering knowledge, I thought jeez it just shows how little people give a $hit, about their retirement and preparing for it.
It was common knowledge and or common sense IMO.
But then again, how many people really do spend time, setting short term and long term goals. My guess is not many.


----------



## Smurf1976 (4 July 2018)

sptrawler said:


> I couldn't believe it when 90% of the people were blown away with it, they thought it was earth shattering knowledge



In a similar way I’ve had people thinking I’m some sort of genius simply on account of applying high school level maths and physics to practical real world situations.

Amazing given that everyone was taught this stuff.


----------



## Value Collector (5 July 2018)

Wysiwyg said:


> I hate that refrigerator ...
> 
> View attachment 88149




If it means Getting out of debt, I think its worth families doing the hard yards for a few months.


----------



## Value Collector (5 July 2018)

SirRumpole said:


> What about the recommended 3 pieces of fruit per day per person ?




There is 4KG of Veg in the dinner section, $15.00 allowance for fruit and salad in the lunch section, and if you want to add more you can use the $15.10 left over.


----------



## Value Collector (5 July 2018)

luutzu said:


> If you ever wonder why your wife sometime frowned and mutter to herself at breakfast, lunch and dinner... it's highly probable it all have to do with your choice of food.
> 
> Mrs VC: He's buying himself a freakin Tesla yet here I am, eating Weatbix, toast with peanut butter; more toast and lettuce for lunch. Potatoes boiled or mashed. Day in, day out. I knew I should have married Bruce. The douche spent like a sailor but at least we won't be eating like it's the Famine




Me and Mrs VC did the hard yards in our 20's, We lived like no one else and now we get to live like no one else, Trust me Mrs VC retired at 30, she loves our trips to Disneyland, Cruises and I am sure she will love the Tesla.

But now of that would be possible if we didn't live frugally for our early years,


----------



## Value Collector (5 July 2018)

sptrawler said:


> Yes, but then you are making the kids become something you believe in.
> .



 When you raise them to eat meat you are doing the exact same thing, you teach them to like the idea of chicken flesh, while being disgusted at the idea of horse or dog flesh, meanwhile some other family teaches their kids to like horse but be disgusted by pig.

Carnists (meat eaters), Bring just as many "beliefs" to the dinner table as vegans, However the there are far more "myths" involved in carnist culture.



> I'm one of those people who just lets the kids chose their way.




Give a child an informed choice, show them some videos about slaughter house horrors and you will find they might not like the idea of eating animals.


Kids get it, when its explained to them, children love animals.

Adults love animals too, but the chains of habit and myth lead a lot of them to not align their actions with their beliefs.


----------



## SirRumpole (5 July 2018)

Value Collector said:


> There is 4KG of Veg in the dinner section, $15.00 allowance for fruit and salad in the lunch section, and if you want to add more you can use the $15.10 left over.




Do you actually live on that diet yourself ?


----------



## Value Collector (5 July 2018)

Being Frugal is a Double Barrelled shot gun, It has two massive impacts.

1, It allows you to direct a larger portion of your wages into savings and investments than you could if you weren't frugal.

2, Because you can live on a smaller weekly income, you can retire on a smaller capital base.

So not only are you building that capital base faster by being frugal, but the size of the capital base you need to retire is much smaller.


----------



## Value Collector (5 July 2018)

SirRumpole said:


> Do you actually live on that diet yourself ?




Not any more, but I did live on something like that in the early years, and was able to set my partner and I up for life.

But, I still don't spend much more than that.

But I am only feeding 2, not 4. but we aren't restricting ourselves.


----------



## sptrawler (5 July 2018)

Value Collector said:


> Me and Mrs VC did the hard yards in our 20's, We lived like no one else and now we get to live like no one else, Trust me Mrs VC retired at 30, she loves our trips to Disneyland, Cruises and I am sure she will love the Tesla.
> 
> But now of that would be possible if we didn't live frugally for our early years,




Agree completely, I remember in the early years a crying Mrs Trawler saying, why do we have to live like this, why can't we have and do what our friends John and Jan are doing.
I said we can do it tough now, while the kids are young and have a great life later, or we can spend everything now and have FA later.
Like you I retired at 56, Mrs Trawler only worked part time occasionally and stopped completely at 40.
John and Jan, are in their 60's still working and still renting, we go over East and see them every couple of years. 
Lovely people, but they are where they are through life choices, not through misfortune. He is a very good industrial senior supervisor and she a University lecturer.
It isn't for everyone, but if you have the ambition, drive and vision it can be done.
But you can't have it both ways, you can't use dollars to indulge and invest, blue collar don't earn enough.


----------



## luutzu (5 July 2018)

sptrawler said:


> Agree completely, I remember in the early years a crying Mrs Trawler saying, why do we have to live like this, why can't we have and do what our friends John and Jan are doing.
> I said we can do it tough now, while the kids are young and have a great life later, or we can spend everything now and have FA later.
> Like you I retired at 56, Mrs Trawler only worked part time occasionally and stopped completely at 40.
> John and Jan, are in their 60's still working and still renting, we go over East and see them every couple of years.
> ...




How did you get Mrs T to stop crying? With hard evidence was it?

I told mine the same thing and she just smile it off (on a good day). On a moody day... stop buying cheap apples! They're on sale for a reason!


----------



## SirRumpole (5 July 2018)

Value Collector said:


> Not any more, but I did live on something like that in the early years, and was able to set my partner and I up for life.




I bet they fed you better than that in the SAS.


----------



## sptrawler (5 July 2018)

luutzu said:


> How did you get Mrs T to stop crying? With hard evidence was it?
> 
> I told mine the same thing and she just smile it off (on a good day). On a moody day... stop buying cheap apples! They're on sale for a reason!




She really didn't have much choice, three kids under three, 23 years old.
I just said 'trust' me, jeez I hoped and prayed I was right, but it turned out fine.
Now it is beer and skittles, but it is a long hard road, never indulging until you get to the end.
Non of my mates begrudge the position I'm in, because they've seen the sacrifice it took to get here, and we are all still great mates and get together for happy hour on Fridays.
We just have different retirements, I still don't have a McMansion, still live in a small house and drive a normal car. 
The only difference is MrsT and I are always away on holidays.


----------



## Value Collector (5 July 2018)

SirRumpole said:


> I bet they fed you better than that in the SAS.




I was in the SOER, not the SASR (we work closely with each other though)

That is a good thing about the Army, Mess meals used to be $3 so while I was on base Breakfast and lunches were $3 all you can eat, and while you are away doing a course or on a training exercise all meals are provided, we also had subsidised housing etc, So that all contributed to me being able to set myself up.

But, as I said above, the Double barrelled affect of being frugal was still the key, Plenty of guys Frittered away all the benefits and pay, and lived in debt.

I probably also lucked out finding the right Mrs VC, she was always more happy at the sports club having a 2 for 1 meal and a lemonade, than being at a fancy restaurant with champagne, we had a champagne budget, but we lived a Beer and peanuts lifestyle.


----------



## SirRumpole (5 July 2018)

Value Collector said:


> I was in the SOER, not the SASR (we work closely with each other though)
> 
> That is a good thing about the Army, Mess meals used to be $3 so while I was on base Breakfast and lunches were $3 all you can eat, and while you are away doing a course or on a training exercise all meals are provided, we also had subsidised housing etc, So that all contributed to me being able to set myself up.
> 
> ...




Well anyway I wish more young people could read your example. I'm sure it would do them a lot of good, but sadly they are probably too busy whinging and maxing out their credit cards on cosmetics or fancy cars.


----------



## gaius (5 July 2018)

Ald123 said:


> So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




Simple, borrow to invest. It's pretty safe since there is a limit how far the market could fall. Government is there to protect the rich so nothing bad could happen to the market.


----------



## sptrawler (5 July 2018)

gaius said:


> Simple, borrow to invest. It's pretty safe since there is a limit how far the market could fall. Government is there to protect the rich so nothing bad could happen to the market.




If it was that simple, no one would be poor.


----------



## Value Collector (5 July 2018)

sptrawler said:


> I'm one of those people who just lets the kids chose their way.




Anyone who doubts children can understand or get excited about being Vegan need to listen to this kid.

As I said, children get it, they love animals, and if they are taught the truth behind chicken nuggets etc before the chains of habit are to heavy, they can easily choose to be vegan on ethical grounds.


----------



## Value Collector (5 July 2018)

gaius said:


> Simple, borrow to invest. It's pretty safe since there is a limit how far the market could fall. Government is there to protect the rich so nothing bad could happen to the market.




While I do agree that debt can be used to make sound investments, I do find your attitude to it far to flippant, in my opinion, you have to be a skilled investor before you should consider using any debt, Debt not only removes a safety net, its puts spikes there, so it would be silly to recommend it to a novice.


----------



## sptrawler (5 July 2018)

VC, I have been having a think about what is fundamentally different between the people I know, which are quite a lot of people. I am thinking along the lines of character trait differences, between those who have become financially secure and those that haven't.
The one glaring difference is the ability to say no, I guess it is self discipline, those who have made it seem to have more.
Like you say 'live frugally', but really it is the ability to say no, be it to smoking, changing your car, buying the latest phone, going out for food, buying yuppy beer, getting the latest gadget.
It boils down to the persons ability to say no, to him/herself.
Just my ponderings


----------



## Value Collector (5 July 2018)

sptrawler said:


> VC, I have been having a think about what is fundamentally different between the people I know, which are quite a lot of people. I am thinking along the lines of character trait differences, between those who have become financially secure and those that haven't.
> The one glaring difference is the ability to say no, I guess it is self discipline, those who have made it seem to have more.
> Like you say 'live frugally', but really it is the ability to say no, be it to smoking, changing your car, buying the latest phone, going out for food, buying yuppy beer, getting the latest gadget.
> It boils down to the persons ability to say no, to him/herself.
> Just my ponderings




Totally self discipline is a big part of it, and thats true with any goal you set yourself, whether that be making it to the olympics, climbing Everest, or simply paying off your debt. You have to set the goal, make a plan, and then most importantly have the self discipline every day to carry out the plan over a number of years.

But like any muscle, the more you exercise self discipline the easier it gets.

And if you can get your partner on board and excited about the plan, it will be so much easier, I was lucky my partner got it straight away, and she was 18 at the time and only just starting full time work, so she had never ramped up her consumption, so I don't think she ever felt like she was sacrificing anything, not to mention she didn't drink alcohol or smoke.


----------



## Value Collector (5 July 2018)

This guy is pretty awesome when it comes to getting people out of debt and building wealth.


----------



## basilio (5 July 2018)

sptrawler said:


> VC, I have been having a think about what is fundamentally different between the people I know, which are quite a lot of people. I am thinking along the lines of character trait differences, between those who have become financially secure and those that haven't.
> The one glaring difference is the ability to say no, I guess it is self discipline, those who have made it seem to have more.
> Like you say 'live frugally', but really it is the ability to say no, be it to smoking, changing your car, buying the latest phone, going out for food, buying yuppy beer, getting the latest gadget.
> It boils down to the persons ability to say no, to him/herself.
> Just my ponderings




Simple ... but profound.  

And totally and utterly subversive. Imagine a world where people started to take these ideas seriously. Our current economic system would be on its knees within months. Consider the main drivers of "economic growth" and join the dots.


----------



## sptrawler (5 July 2018)

basilio said:


> Simple ... but profound.
> 
> And totally and utterly subversive. Imagine a world where people started to take these ideas seriously. Our current economic system would be on its knees within months. Consider the main drivers of "economic growth" and join the dots.




We don't need to worry, none will be reading this forum. 

My best mate, has been for the last 50years, he just can't change, he had changed 27 cars by the time I sold my first car.
He finally may be seeing the light, he has just given up smoking, not long to go to retirement and then debt free.
The nicest bloke you would ever meet.


----------



## Value Collector (5 July 2018)

basilio said:


> Consider the main drivers of "economic growth" and join the dots.




I don't think so, because over their life a person who focuses on building wealth and reducing debt, will consume more than a person who chooses to front load consumption and spend a life paying interest.

For example,

lets say there are 2 people, both will work from 18 - 65 and earn $ 4.7 Million at their jobs.

Person A, is a hyper consumer and front loads a bunch of their consumption in the first 20 years, and then eventually has to slow consumption down due to principle and interest payments .

Person B, is a lowish consumer at first, never gets into any real debt just lives within his earnings and saves and invests some.


Over their life person A only gets to spend $ 3.5 million of the total $4.7 Million of earnings because they paid $1.2 Million in interest.

However, Due to not having any interest payments, person B was able to spend their entire $4.7 Million earnings over their life, along with perhaps another $2 million of investment earnings.


So person B although their spending was lower at first, they were able to ramp up consumption over their life and end up consuming 2 x the products and services person A did.

People save and invest because they want to consume more in the future, not less. its a flawed view that suggests the economy relies on waste to survive.


----------



## Value Collector (5 July 2018)

Any one that doesn't think being frugal can lead you to an early retirement need to have a look at this family.


----------



## SirRumpole (5 July 2018)

Value Collector said:


> People save and invest because they want to consume more in the future, not less.




But the type of their consumption affects the economy in different ways.

Buying an established large house and taking lots of overseas trips (and cruises) does little for the local economy, whereas continued spending on buying new cars, groceries, food, tv sets, mobile phones etc, and even alcohol and fast food generates employment and keeps the economy turning over.

So if people basically stop spending the economy (and your share revenue) dives. You are benefiting from other people's excesses and credit card debt.


----------



## sptrawler (5 July 2018)

Value Collector said:


> Any one that doesn't think being frugal can lead you to an early retirement need to have a look at this family.




The thing is VC most people don't want to be frugal, and who is to say that is wrong or the frugal way is right, it is everyone's choice which way they go.

Where the problem lies is, the only ones being held responsible for their choice, is the frugal one.
They are being punished, to reward, the less frugal one.


----------



## Humid (5 July 2018)

But if everyone lived like you lot what would employment and the economy be doing?
Just a thought.


----------



## Value Collector (5 July 2018)

SirRumpole said:


> But the type of their consumption affects the economy in different ways.
> 
> Buying an established large house and taking lots of overseas trips (and cruises) does little for the local economy, whereas continued spending on buying new cars, groceries, food, tv sets, mobile phones etc, and even alcohol and fast food generates employment and keeps the economy turning over.
> 
> So if people basically stop spending the economy (and your share revenue) dives. You are benefiting from other people's excesses and credit card debt.




As I said, frugality is a temporary tool to get you ahead at the start of your journey, Today my consumption is back to what would be considered normal, or even perhaps a little higher, and will grow through out the rest of my life.

Purchasing New cars, TV sets, Mobile phones, alcohol does little for the Australian economy, they are mostly made over seas or owned by foreign companies.


I have never said stop consuming, every consumes every day, 

All I am saying is be mindful of your consumption, stick within your means, and invest some savings back into the economy.

If we all just hyper consumed, we would be debt slaves to foreign nations, The ownership of all our productive assets would drift over seas, and we would all be slaves shackled by debt working for the Man and shopping at the company store.

If you think suggesting that Australians should spend wisely, and invest their savings is bad for the economy, you are wrong.


----------



## sptrawler (5 July 2018)

SirRumpole said:


> But the type of their consumption affects the economy in different ways.
> 
> Buying an established large house and taking lots of overseas trips (and cruises) does little for the local economy, whereas continued spending on buying new cars, groceries, food, tv sets, mobile phones etc, and even alcohol and fast food generates employment and keeps the economy turning over.
> 
> So if people basically stop spending the economy (and your share revenue) dives. You are benefiting from other people's excesses and credit card debt.




You are right on the money, and this is where our useless Governments have stuffed up, by tampering with the original pension/welfare system which was like the U.K,N.Z, Canada system.
Where everyone pays into the pension scheme, then at retirement everyone gets a basic pension.
If you want a better retirement you put into your own super, then the income you pull from that is taxed as per income.
The  flaw with our system is the pot was raided, and the pension paid from consolidated revenue.
Eventually as the population grows it becomes unaffordable, it has taken 60 years, but we have got there.
Now they want to raid the super pot again, because the pension still isn't funded, they are just kicking the ball down the street. What happens when those with super have spent it, who do they hit next? This is the flaw with Labor ATM they just want to redistribute wealth, not fix the issue and make it sustainable.

The two fold benefit of the U.K system is, it is funded and it encourages participation in the workforce.


----------



## Value Collector (5 July 2018)

sptrawler said:


> The thing is VC most people don't want to be frugal, and who is to say that is wrong or the frugal way is right, it is everyone's choice which way they go.
> .




There is no right or wrong, but it's about aligning your actions with the outcomes you want to get.

If you want to spend more than you earn don't complain about your debt, If you want to eat like a king, don't complain about your food bill.

You are totally right, everyone has a choice, So you shouldn't complain about the outcome of your choices, you made them.


----------



## SirRumpole (5 July 2018)

Value Collector said:


> Purchasing New cars, TV sets, Mobile phones, alcohol does little for the Australian economy, they are mostly made over seas or owned by foreign companies.




But they are retailed here and that produces jobs.

Sure, a lot of people spend money on junk, like a lot of the stuff produced in China. Value for money is what we need.

I bought some underwear a few days ago and its coming apart already, but it seems that it's all you can get these days.


----------



## Value Collector (5 July 2018)

Humid said:


> But if everyone lived like you lot what would employment and the economy be doing?
> Just a thought.




you would have people in their 20's saving and investing, and as you got higher in ages people spending more and more, until you have the older crowd living like kings on their nest eggs.

As I said total consumption will be the same or higher, all you are doing is reversing it from over consumption in the beginning to over consumption at the end. Not everyone is in their 20's.


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## Value Collector (5 July 2018)

SirRumpole said:


> But they are retailed here and that produces jobs.
> .




More and more is done online.

But as I said, total consumption wouldn't be less, it would be the same or more, all I am suggesting is time shift it. 

And I hardly like getting people early in their life to stat saving 10% - 20% of their income will crash the economy.


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## Humid (5 July 2018)

Wine and beer.....overseas
You should buy a new tv and catch up man!


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## basilio (5 July 2018)

VC I can see the internal logic of your comparing a high spending vs a low spending person over  a lifetime. On an individual basis I see your point.

But that wasn't what I was referring to.

In my observation a huge amount of our current economic activity could be labelled wasteful, excessive or totally counter productive.  And yet this activity is the ongoing drive to increasing GDP year in and year out to keep the economies "growing".

Lets pick a few at random.
1) *Fashion.  *Buying and changing clothes, cosmetics, cars, toys whatever on an endless basis.
2) *Technology . *The relentless changes in phones, computers, electronic gadgets. 
3) *Cars.  *Another relentless drive of consumption with change for changes sake and delibrate construction of excessive maintenance costs to keep up profits and encourage the purchase of new  cars
4) *Renovations.* New kitchens and bathrooms  every 10 years (or less) whether you need them or not.  
5)* Hyper promotion of all legal drugs.   *Sugar, grog, gambling, chocolate,  smoking, a million treats.
6) *Arms industry. *Trillions of dollars spent on the most expensive ways to destroy the worlds population many times over.

But returning to the actual topic-  Australias' very high personal debt.

Perhaps the overriding factor has been the role of financial institutions in creating easy mechanisms for people to borrow( which in fact has financed  the ever growing economy)

Credit cards are only 40 years old! Before that you either had cash or "went to the bank for a personal loan."  Being able to magically pay for something immediately with a piece of plastic was unheard of.

Housing loans were once quite strictly given on the basis of
1) The repayment was based on the amount you earned - 25% of net pay or 33% of gross
2) You had to have a 10-20% deposit saved over at least 12 months.

And yet until very recently many financial institutions were offering housing loans for 100-105% of the house cost on fanciful  stories of  income and living costs.


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## SirRumpole (5 July 2018)

Value Collector said:


> But as I said, total consumption wouldn't be less, it would be the same or more, all I am suggesting is time shift it.




Good point.

Might put off the obesity crisis untill middle age too.


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## Value Collector (5 July 2018)

Humid said:


> Wine and beer.....overseas
> You should buy a new tv and catch up man!




Most of the Beer and spirts drank in Australia is foreign owed


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## sptrawler (5 July 2018)

Rumpy and VC, IMO you are both saying the same thing, just looking down the pipe from different ends.

You can be frugal and spend your money when you're older, or you can spend your money now and keep the economy ticking over.
The only difference is the one who spends his money now, has to be funded from the tax base later, the frugal one never has to be funded.


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## basilio (5 July 2018)

If you havn't heard of it The Cheapskates Club is  a great source of ideas to live well on less.
https://www.cheapskatesclub.net/

https://www.cheapskatesclub.net/300-a-month-food-challenge.html


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## Value Collector (5 July 2018)

basilio said:


> Lets pick a few at random.
> 1) *Fashion.  *Buying and changing clothes, cosmetics, cars, toys whatever on an endless basis.
> 2) *Technology . *The relentless changes in phones, computers, electronic gadgets.
> 3) *Cars.  *Another relentless drive of consumption with change for changes sake and delibrate construction of excessive maintenance costs to keep up profits and encourage the purchase of new  cars
> ...




I can assure you, I consumed all of those things even in my hyper frugal years


----------



## Value Collector (5 July 2018)

sptrawler said:


> Rumpy and VC, IMO you are both saying the same thing, just looking down the pipe from different ends.
> 
> You can be frugal and spend your money when you're older, or you can spend your money now and keep the economy ticking over.
> The only difference is the one who spends his money now, has to be funded from the tax base later, the frugal one never has to be funded.




exactly, and with a population of 24 million all at different stages of life, the pipeline will be full at all stages.


----------



## Value Collector (5 July 2018)

SirRumpole said:


> Good point.
> 
> Might put off the obesity crisis untill middle age too.




This is what awaits a nation that over consumes, and fails to invest.

Is it any wonder Chinese money is buying up Australias assets.

As I said we would all be debt slaves shopping at the company store if we all went into debt to "Boost the economy", I am sure the economy would do fine for a while, but it wouldn't be Aussie Owned.


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## SirRumpole (5 July 2018)

sptrawler said:


> Rumpy and VC, IMO you are both saying the same thing, just looking down the pipe from different ends.
> 
> You can be frugal and spend your money when you're older, or you can spend your money now and keep the economy ticking over.
> The only difference is the one who spends his money now, has to be funded from the tax base later, the frugal one never has to be funded.




Well, I can see VC's point and I think people should be more thrifty when they are younger. The big problem imo is the easy availability of credit, credit cards did not exist when I was a kid so people had to live within their means , even if it meant blowing their spare cash on beer and fags. 

The banks are once again taking advantage of the stupid and greedy and I can see that there may need to be some regulation on credit card limits, as anti free market as that is.


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## Humid (5 July 2018)

Value Collector said:


> Most of the Beer and spirts drank in Australia is foreign owed




What isn’t besides the service industry which survives on consumption


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## SirRumpole (5 July 2018)

Taking 17 years to pay off a $2,000 credit card debt.

http://www.abc.net.au/news/2018-07-05/chart-of-the-day-credit-card-debt/9940612


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## sptrawler (5 July 2018)

SirRumpole said:


> Well, I can see VC's point and I think people should be more thrifty when they are younger. The big problem imo is the easy availability of credit, credit cards did not exist when I was a kid so people had to live within their means , even if it meant blowing their spare cash on beer and fags.
> 
> The banks are once again taking advantage of the stupid and greedy and I can see that there may need to be some regulation on credit card limits, as anti free market as that is.




I agree, the other thing is they need to make the pension sustainable, not just a tax grab and scramble to fund it.
As technology etc takes more jobs, the amount of welfare/pension is going to increase exponentially, no one is talking about how to fund it. Both sides are in the wrong on this.

They probably know how much it is going to cost, maybe the super surcharge after a certain date, should be directed into a pension future fund.
Then if people want a better retirement they buy extra, instead of just putting the surcharge up to 12% and giving it to fund managers?
Who knows, but something needs to be done, it is the elephant in the room, and they know it. 
All they are doing, is Fing, prancing around it.
Just my opinion.


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## basilio (5 July 2018)

Value Collector said:


> I can assure you, I consumed all of those things even in my hyper frugal years




I wasn't suggesting we don't "do anything" except eat brown rice and water.  I was suggesting that here is massive over consumption in these areas.


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## sptrawler (5 July 2018)

SirRumpole said:


> Taking 17 years to pay off a $2,000 credit card debt.
> 
> http://www.abc.net.au/news/2018-07-05/chart-of-the-day-credit-card-debt/9940612




The only people who should have a credit card, are those who don't need one.

The rest should have a debit card, if they can't afford to buy it, don't.


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## SirRumpole (5 July 2018)

sptrawler said:


> The only people who should have a credit card, are those who don't need one.
> 
> The rest should have a debit card, if they can't afford to buy it, don't.




I tore my credit card up years ago and just have debit cards.

Not that I'm a big spender anyway, but the credit card just made spending too easy.


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## Humid (5 July 2018)

There ok if you pay them off in full every cycle I used to pay my quarterly bas with Amex and get some serious qantas points and the card surcharge was tax deductible lol


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## sptrawler (5 July 2018)

Humid said:


> There ok if you pay them off in full every cycle I used to pay my quarterly bas with Amex and get some serious qantas points and the card surcharge was tax deductible lol




If you can afford to pay it off every cycle, you really don't need one, it is just a convenience.
*Which is the way it should be.*


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## Humid (5 July 2018)

sptrawler said:


> If you can afford to pay it off every cycle, you really don't need one, it is just a convenience.
> *Which is the way it should be.*



 I like flying business class without paying the premium


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## Humid (5 July 2018)

Humid said:


> I like flying business class without paying the premium



It also shows you your spending patterns ......years ago it looked like an address book for metropolitan bottle shops


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## Value Collector (5 July 2018)

Humid said:


> What isn’t besides the service industry which survives on consumption




And how does encouraging people to go into debt and spend to "stimulate the economy" help rectify the problem of losing Aussie owned businesses?

as I said it does nothing but make them look like more attractive investments to out siders, while the Aussie citizens are so swamped in debt and focusing on consumption that none of them are investing.


----------



## Value Collector (5 July 2018)

basilio said:


> I wasn't suggesting we don't "do anything" except eat brown rice and water.  I was suggesting that here is massive over consumption in these areas.



 the economy adjusts, nothing is going to happen over night.

A wise lady called Mary Poppins once said - "Enough is as good as a feast", there is no need to waste the economy would do just fine without the waste.


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## Value Collector (5 July 2018)

SirRumpole said:


> Well, I can see VC's point and I think people should be more thrifty when they are younger.




starting younger puts the power of compounding on your side.

This example of two people show the young saver will have the greater power of consumption over his life.

the example is of a guy that saves from 19 till he turns 26 will beat a guy that saves from 27 - 65


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## bellenuit (5 July 2018)

Just to add some humour. Quotes from George Best, Northern Ireland and Manchester United footballer and notorious playboy in his time: 
_
'I spent a lot of good money on drink, women and cars. The rest I just squandered'

'In 1969 I gave up women and alcohol - it was the worst 20 minutes of my life'_
_
_


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## Humid (5 July 2018)

Value Collector said:


> And how does encouraging people to go into debt and spend to "stimulate the economy" help rectify the problem of losing Aussie owned businesses?
> 
> as I said it does nothing but make them look like more attractive investments to out siders, while the Aussie citizens are so swamped in debt and focusing on consumption that none of them are investing.




What I’m saying if people don’t consume you will go into recession is how I see it
Remember the Labor handouts
My point was if everyone follows your previous lifestyle it won’t work....no jobs no money it’s the fact that not everyone does it so it works.
I can buy a house cheaper now than 5 years ago so how would my investment be looking if I did.
It’s just not being a tightarse that works


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## Value Collector (5 July 2018)

bellenuit said:


> Just to add some humour. Quotes from George Best, Northern Ireland and Manchester United footballer and notorious playboy in his time:
> _
> 'I spent a lot of good money on drink, women and cars. The rest I just squandered'
> 
> ...




Here is my Pithy response.

Money or time you enjoyed wasting, was never really a waste, but if you are living on borrowed money, you are living on borrowed time.


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## Value Collector (5 July 2018)

Humid said:


> What I’m saying if people don’t consume you will go into recession is how I see it
> Remember the Labor handouts
> My point was if everyone follows your previous lifestyle it won’t work....no jobs no money it’s the fact that not everyone does it so it works.
> I can buy a house cheaper now than 5 years ago so how would my investment be looking if I did.
> It’s just not being a tightarse that works




not everyone is aged between 19 and 26, if everyone was frugal for 7 years out of their life the economy would be fine.

its like saying "if we all got jobs flipping burgers the economy would crash" well off course it would, but there is nothing wrong with the majority of people flipping burgers part time while they are young, its a temporary phase,


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## gaius (5 July 2018)

Interest rates are at historical lows. It would be silly not to pick up more debt.


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## Value Collector (5 July 2018)

gaius said:


> Interest rates are at historical lows. It would be silly not to pick up more debt.




depends on what you are using it for I guess.


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## Wysiwyg (5 July 2018)

Value Collector said:


> I don't think so, because over their life a person who focuses on building wealth and reducing debt, will consume more than a person who chooses to front load consumption and spend a life paying interest.
> 
> For example,
> 
> ...



There would be an economic collapse if people did not borrow and consume useless stuff and were frugal. Businesses would collapse. However ... after a period of time the economy would balance up after adapting to the new consumer behaviour and this would be very healthy for the overall economy.


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## SirRumpole (5 July 2018)

Wysiwyg said:


> There would be an economic collapse if people did not borrow and consume useless stuff and were frugal. Businesses would collapse. However ... after a period of time the economy would balance up after adapting to the new consumer behaviour and this would be very healthy for the overall economy.




If you look at the 50's or 60's, there wasn't a lot of "useless" stuff you could buy, it was basically consumer items like fridges, washing machines, cars, tv and radio that added something to people's lives and the economy still went along fine. 

So I think you are right, if people stopped over consuming and buying stuff they didn't need, some businesses would go broke. I'm not sure it would be all good for the economy though, there is a limit to the stuff people actually need as opposed to what they want.


----------



## Value Collector (5 July 2018)

Wysiwyg said:


> There would be an economic collapse if people did not borrow and consume useless stuff and were frugal. Businesses would collapse. .




the whole country isn't going to change over night, hell it might not change at all.

My whole point has been that people have the power to change their situation if they truely want to, and living below your means and saving and investing the difference is a good way.


----------



## Value Collector (5 July 2018)

SirRumpole said:


> I'm not sure it would be all good for the economy though, there is a limit to the stuff people actually need as opposed to what they want.




There is nothing wrong with the economy producing "wants" and well as "needs", as I said its all about timing, and being sure you can afford them,


----------



## Wysiwyg (7 July 2018)

SirRumpole said:


> I'm not sure it would be all good for the economy though, there is a limit to the stuff people actually need as opposed to what they want.



Health wise for better quality food consumption (less sickness) and relationship wise for debt problems (stronger partnerships built on love rather than borrowed money). It would be resetting the bar regarding the cost of living.


----------



## luutzu (8 July 2018)

Latest report on global income inequality. Holy crap.

It's going to be really bad for the lower half; great for the top 1% who is estimated to own 65% of global assets by 2030. The lower half will own about 1%. 

These kind of inequality never ends well.


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## Smurf1976 (9 July 2018)

SirRumpole said:


> If you look at the 50's or 60's, there wasn't a lot of "useless" stuff you could buy




I've often said to people who are old enough to get it, just think back when you were a child and consider how many electrical or other powered (petrol etc) mechanical items of all sorts you had at home.

It's an incredibly short list compared to what is considered normal today and most of the items were themselves very low performance compared to even the cheapest products sold today. They did, however, tend to last somewhat longer.


----------



## Wysiwyg (9 July 2018)

luutzu said:


> Latest report on global income inequality. Holy crap.
> 
> It's going to be really bad for the lower half; great for the top 1% who is estimated to own 65% of global assets by 2030. The lower half will own about 1%.
> 
> These kind of inequality never ends well.



It has always been about who has the most money is king. Low income workers will always struggle to keep up with living costs. The best escape is to have a partner working or upskill to a field that pays well.


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## Ald123 (16 July 2018)

Ok so as the original poster.

Why has this high personal debt already not caused people to stop buying house, to stop buying stuff.

I mean a salary of $7000 take home pay is quite high but buying a house with a $650k loan results in a $3500 repayment at 5%; $3900 repayment at 6%; $4350 at 7%; and $4800 at 8%. Paying $1.72 million for a house instead of $650k seems ludicrous. I can’t see a person on $7000 living easily off $3500 left over with a big family, never mind $2650 when interest rates hit 8%.

It seems as if the banks are desperate in this country to prove that property goes up every 10 years or less, which is probably how much time it would take up to save for a house to buy with cash as a renter without investing your money in a cheap savings fund like AFIC or similar, and less if you did. The banks it seems to me deliberately make it possible for risky lenders to get credit. I am not surprised we have a royal commission I do however doubt very strongly that the Royal commission will do anything about it.

I mean look at APRA and ASIC, scrambling now to perform compliance when they have been doing nothing for years, because of what’s coming out in the Royal Commision. Now they want to quickly get their compliance numbers up so that they look like they have not been doing what they factually have, and that is wasting taxpayers money for decades, sitting in their office surfing the net,  resulting in the point where we had to have a super expensive again tax payer funded Royal commission to clean up what ASIC and APRA where set up to do and failed. We need a royal commission into APRA and ASIC and the politicians who have ties with the banks and who, instructed AASIC and APRA to do nothing for decades.


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## SirRumpole (16 July 2018)

Ald123 said:


> Why has this high personal debt already not caused people to stop buying house, to stop buying stuff.




I think that the almost unaffordable house prices in Sydney and Melbourne has caused a drop off in interest, resulting in stabilising if not falling prices in those areas, combined with new laws affecting foreign investors.


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## Tisme (16 July 2018)

SirRumpole said:


> I think that the almost unaffordable house prices in Sydney and Melbourne has caused a drop off in interest, resulting in stabilising if not falling prices in those areas, combined with new laws affecting foreign investors.




I'm thinking locals backed in rich chinese as being able to create wealth suburbs... no particular common sense rationale, just get on the bandwagon before missing out.


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## SirRumpole (16 July 2018)

Tisme said:


> I'm thinking locals backed in rich chinese as being able to create wealth suburbs... no particular common sense rationale, just get on the bandwagon before missing out.




Yes, good thinking. Get the Chinese in to build the houses, then get the government to change the rules so the Chinese leave and they can snap up the properties at reduced rates.


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## luutzu (16 July 2018)

SirRumpole said:


> Yes, good thinking. Get the Chinese in to build the houses, then get the government to change the rules so the Chinese leave and they can snap up the properties at reduced rates.




shh.... keep it low bro. That's always been the plan. 

Doesn't hurt that lots of locals fell for it too though. It'll keep their heads down.


----------



## Value Collector (16 July 2018)

SirRumpole said:


> Yes, good thinking. Get the Chinese in to build the houses, then get the government to change the rules so the Chinese leave and they can snap up the properties at reduced rates.




Hence why I have no issues with foreign investment, they can't take it with them, and we can change the rules and regulations and tax system whenever we want.

Although, given that Australia is generally pretty undercapitalised, it makes sense to treat foreign investors well, at least until we an get our own population to pull their socks up.

As I said before, I this guy gives me hope (it's funny, but also makes me hopeful investing will take of, and be popular with the average Joe)


----------



## Smurf1976 (16 July 2018)

Ald123 said:


> Why has this high personal debt already not caused people to stop buying house, to stop buying stuff.




Things like this always go on far longer than any rational logic says they ought to.

I liken it to picking up firewood in the bush for a camp fire. There's a hell of a lot of wood lying on the ground once you actually want it and start picking it up. However much you'd estimate to be there, there's far more in practice so long as you're not fussy about the quality of the wood and how well it burns. Key point being that you're willing to accept that it's imperfect and you've got to snap or cut it, that it won't burn all that great and so on but there's heaps of it if you aren't fussed about those details.

Same with debt fueled spending. There's a lot of lenders and willing borrowers so long as you're not worried about the quality of either. If you only want a high quality lender and they're only willing to lend to high quality borrowers then sure it's quite limited. Not if you drop the quality though and that tends to happen on both sides when the alternative involves the music stopping.



> The banks it seems to me deliberately make it possible for risky lenders to get credit.




It's the quality thing. If there aren't enough high quality borrowers willing to borrow however much the banks want to lend then no matter what they say, in practice they'll drop the quality requirements in order to find enough borrowers.

Bit like saying you want steak but if there's not enough steak then you'll take the hamburgers rather than have nothing. And if the burgers run out then sure you'll eat sausages. And if there's no sausages well there's a bag of chips left over so may as well eat those for dinner.

If the banks are hell bent on pushing out credit then any barrier in terms of the quality of borrowers is really just a selection tool. Much like how an employer will offer the job to someone who's keen to give it a go but lacks any relevant skills if they can't find someone who does have the skills. Same with most things.


----------



## Value Collector (16 July 2018)

Smurf1976 said:


> Things like this always go on far longer than any rational logic says they ought to.
> 
> I liken it to picking up firewood in the bush for a camp fire. There's a hell of a lot of wood lying on the ground once you actually want it and start picking it up. However much you'd estimate to be there, there's far more in practice so long as you're not fussy about the quality of the wood and how well it burns. Key point being that you're willing to accept that it's imperfect and you've got to snap or cut it, that it won't burn all that great and so on but there's heaps of it if you aren't fussed about those details.
> 
> ...




as far back as 1776 Adam Smith said -

*"The ordinary tone of expense seems everywhere to be regulated, not so much according to the real ability of spending, as to the supposed facility of getting money to spend"*

I would love to hear his thoughts on todays consumer credit industry.


----------



## SirRumpole (16 July 2018)

Value Collector said:


> As I said before, I this guy gives me hope (it's funny, but also makes me hopeful investing will take of, and be popular with the average Joe)




The rudiments should be taught in school as part of the Economics subject, if that still exists.


----------



## sptrawler (16 July 2018)

SirRumpole said:


> The rudiments should be taught in school as part of the Economics subject, if that still exists.



The problem still boils back to personality traits, you can teach kids how debt works, but only some will take it on board. Similar to smoking, the amount of money spent on advertising the  adverse health consequences, still people smoke.
I have four kids, well grown up now, I taught them all about investment endlessly.
Only one, really took it board.
The individual still has to be able to say no, to buying something they really want, until they can afford it or even forego buying it completely. Not many want to do that.
I bought the kids a book by Noel Whitaker, years ago, "Making Money made Simple".
One of the opening lines was, out of 100 people only 5 will become financially independent, I think that is still true.
Only 5 out of the 100, will be disciplined enough to forgo the spending, and save instead.
Let's be honest, it isn't nearly as much fun saving, as it is spending.


----------



## SirRumpole (16 July 2018)

sptrawler said:


> The problem still boils back to personality traits, you can teach kids how debt works, but only some will take it on board. Similar to smoking, the amount of money spent on advertising the adverse health consequences, still people smoke.




Yes, all that is true, but if you get to them at an early age then some more might take it on board.

You are quite right about saving vs spending though, that why we have a debt problem.


----------



## sptrawler (16 July 2018)

SirRumpole said:


> Yes, all that is true, but if you get to them at an early age then some more might take it on board.
> 
> You are quite right about saving vs spending though, that why we have a debt problem.




The big problem for most young people to get their head around is, there has to be a lot of blind faith, they have to believe that saving and doing without will lead to better things down the track.
This can be difficult to take on board when they see all their friends with the latest gadgets, going with their parents on holidays to Bali and talking about the latest films at the cinema.
It just takes a weird kid to say no, I'm going to save and not buy a Play Station, or go to the cinema, or do any of the cool things everyone else is doing.
The main problem is:
One, the kid doesn't want to do it, unless they are a nerd.
Secondly when the kid asks, " will all this doing without, make me rich"? The teacher will have to say "not necessarily, but it may".
It is just a hard sell, that's why not many make it.
The average person has to be driven, to want to do it, it isn't a fun way of living.


----------



## sptrawler (19 July 2018)

SirRumpole said:


> Yes, all that is true, but if you get to them at an early age then some more might take it on board.
> 
> You are quite right about saving vs spending though, that why we have a debt problem.




This story in today's SMH sums up the problem young people have.

https://www.smh.com.au/business/ban...rd-high-on-sales-figures-20180719-p4zse2.html

Here is how it helps you to spend your money:

*How does Afterpay work? AUS*

6 hours ago

Updated


We offer simple instalment plans for online shoppers, allowing a purchase to be paid for in four equal instalments, due every 2 weeks.

Simply shop with one of your favourite stores found in the Shop Directory and choose Afterpay as your payment method at checkout. First-time shoppers provide payment details as usual, returning shoppers simply log in to make their purchase. It’s that easy!

After you check out, the goods will be shipped to you by the merchant. At any time, you can log in to your Afterpay account to see your payment schedule and make a payment before the due date. Otherwise we will automatically take the money from your debit or credit card every 2 weeks.

*Please Note:*

Afterpay* does not* approve 100% of orders. We are committed to ensuring we support responsible spending.

When determining which orders to approve, we considers a number of different factors. As an example, the longer you have been a shopper with Afterpay and the more orders you have successfully repaid, the more likely you will be able to spend more.

*Things to consider:*

- are there sufficient funds on your card (generally we look to see 25% of the order value available to spend)

- length of time you have been using Afterpay (tighter in the first 6 weeks)

- amount you have to repay, it may help to pay some off (not a guarantee)

- the value of the order you are trying to place, it may help to reduce the value of your shopping cart (not a guarantee)

- adding a credit card may increase your spending power (not a guarantee)

- the number of orders you currently have 'open' with us (not a guarantee)

Whilst we know it can be frustrating to not know exactly how much you can spend each time or how many active orders you can have, our rules and approval process help Afterpay responsibly offer a completely free service to our shoppers.

*Please note that ID verification does not guarantee that your order with Afterpay will be approved.*

Apparently it is very popular with young people. lol


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## luutzu (21 July 2018)

Must watch.
Wealth Inequality in 'merka.

The numbers are revolutionary.


----------



## Wysiwyg (21 July 2018)

luutzu said:


> Must watch.
> Wealth Inequality in 'merka.
> 
> The numbers are revolutionary.



Warren, Bill and co. say they create wealth and employment via their business dealings. Does one person need the 1% category of money in one lifetime? No and you have to consider that not everyone wants to be filthy rich nor does everyone have the intelligence to get there. Much of big wealth is created with o.p.m. and supposedly anyone can give it a shot and grow smart or get lucky.


----------



## luutzu (22 July 2018)

Wysiwyg said:


> Warren, Bill and co. say they create wealth and employment via their business dealings. Does one person need the 1% category of money in one lifetime? No and you have to consider that not everyone wants to be filthy rich nor does everyone have the intelligence to get there. Much of big wealth is created with o.p.m. and supposedly anyone can give it a shot and grow smart or get lucky.




Sure they'd say that. 

But if they look at the stats they'll see what kind of wealth and employment they're offering, what kind of society they're building. 

Bezos is trying to send tourists to space though. For about $200K a pop you could get into a rocket, goes really fast into the upper atmosphere and see bugger all. 

But that's not a waste at all. Being taxed a million or less over five-years to help his own hometown's homeless... that's just too much for the mighty Bezos and his Amazon. 

What a douche. He better be using that space tourism nonsense as a front to the next generation of SkyNet and killer robots. I'd at least understand and appreciate the effort.


----------



## basilio (23 July 2018)

luutzu said:


> Must watch.
> Wealth Inequality in 'merka.
> 
> The numbers are revolutionary.





That is a mind blower.  If we were talking about France 1789 - this could be a comparison in terms of income inequality with a tiny group holding the  overwhelming amount of the wealth.

Well worth checking out.


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## luutzu (23 July 2018)

basilio said:


> That is a mind blower.  If we were talking about France 1789 - this could be a comparison in terms of income inequality with a tiny group holding the  overwhelming amount of the wealth.
> 
> Well worth checking out.




Just read on Reuters that it's those on the lowest 60% of income that's keeping the US economic engine running lately. They're doing it by emptying their savings and racking up personal debt. And clipping coupons. 

Real wages actually dropped by a penny over past couple of years. 

The new tariffs will do wonders for those stretched budgets.


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## PZ99 (24 July 2018)

Plain packaging for loans ?

In the same way that the Government banned tobacco advertising and forced the companies to show the after effects on their packaging, perhaps lenders should be made to do something similar.

Given that home loans and credit cards are not linked with gruesome cancers, something more akin to the plain packaging aspect of tobacco regulation seems most applicable.

This would allow banks and other lenders to advertise the products they have available, their interest rates and conditions, but not to use emotive messaging to sell their loans.

No more actors playing first-home buyers at an auction, or happy couples on a holiday paid for with a personal loan, or purchasing at a shop with abandon using their credit card but apparently never having to foot the bill.

Instead of an exclusive focus on the short-term lifestyle debt can facilitate, the ads would focus on the nature of the product — the interest rate, the term (if applicable) and the amount of repayments and interest on a standard sample loan amount.

Full article > http://www.abc.net.au/news/2018-07-...g-to-break-australian-debt-addiction/10024732


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## sptrawler (24 July 2018)

Yes, maybe they should just impose limits on credit cards commensurate with your earnings and not issue credit cards unless you have the ability and means to pay it.


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## luutzu (24 July 2018)

sptrawler said:


> Yes, maybe they should just impose limits on credit cards commensurate with your earnings and not issue credit cards unless you have the ability and means to pay it.




That's assuming Big Brother is out there looking after the plebs' interests instead of battering them to their knees, ready to be served.


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## sptrawler (24 July 2018)

luutzu said:


> That's assuming Big Brother is out there looking after the plebs' interests instead of battering them to their knees, ready to be served.



You are starting to get a very dark bent on things, house prices are falling, interest rates are the lowest in living history.
You can't protect people from themselves, they have to be allowed to make their own decisions, but with that comes the responsibility for making that decision.
Just ask a smoker, if they think the Government is doing the right thing by trying to stop people smoking.
If someone gets into debt it is 'big brothers fault', if someone smokes, it is 'big brothers fault', what these days isn't 'big brothers fault'.
You obviously haven't got unmanageable debt and I'll guess you don't smoke, is that because you're lucky, or because you chose not to?


----------



## luutzu (24 July 2018)

sptrawler said:


> You are starting to get a very dark bent on things, house prices are falling, interest rates are the lowest in living history.
> You can't protect people from themselves, they have to be allowed to make their own decisions, but with that comes the responsibility for making that decision.
> Just ask a smoker, if they think the Government is doing the right thing by trying to stop people smoking.
> If someone gets into debt it is 'big brothers fault', if someone smokes, it is 'big brothers fault', what these days isn't 'big brothers fault'.
> You obviously haven't got unmanageable debt and I'll guess you don't smoke, is that because you're lucky, or because you chose not to?




Weren't say suggesting that the gov't should put a limit on credit cards?

If the gov't were to "intervene", and intervene in such a way... that'd be them protecting consumers. 

I'm simply saing that if the gov't were to intervene, it's not to protect the little consumers, it's to open the market, free the animal spirit i.e. let the predators loose. 

It's not being dark, it's just how the world is. 

See, I'm smiling and happy. Well, happier than I ought to be but you get the point.

-----------

While we're on the subject... what is the role of government? To protect the masses, the ordinary people? 

Or are their role, as they see it, to serve the interests of donors, friends, masters and "job creators"?

If you look at their policies, they are all, yes, all of it... are designed to serve one group. And if in serving the top it sometime happen to also serve the bottom and the middle... well that's just accidental. 

There's some Harvard study a couple years ago on this in the US... That if a proposed policy is not one the top 1% of 1% like... it will never happen, ever. 

If it's what the majority of the population want - e.g. gun control, healthcare for all - but the top does not want it... it will not happen. I believe the phrase is "politically unfeasible".


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## sptrawler (24 July 2018)

luutzu said:


> -----------
> 
> While we're on the subject... what is the role of government? To protect the masses, the ordinary people?



The problem is the Government can't macro manage every person, it is still the responsibility of the individual, to take responsibility for personal choices and actions.
Actually Bob Hawke displayed exactly how Government can't change people, when he said no child will live in poverty after a certain date.
The problem is you can throw as much money as you like, at the problem, how the people spend that money is the problem. As always.




luutzu said:


> Or are their role, as they see it, to serve the interests of donors, friends, masters and "job creators"?




Well it would be an interesting World if people didn't have jobs, there was no industry and we all just sat around hugging and kissing. Sounds a bit like a movie.
It would only be a matter of time, before someone would want more, then everyone would say how come I haven't got that.
Protecting humans from themselves, is the biggest job Government has.


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## luutzu (24 July 2018)

sptrawler said:


> The problem is the Government can't macro manage every person, it is still the responsibility of the individual, to take responsibility for personal choices.
> Actually Bob Hawke displayed exactly how Government can't change people, when he said no child will live in poverty after a certain date.
> The problem is you can throw as much money as you like, at the problem, how the people spend that money is the problem. As always.
> 
> ...





They always say that gov't is the problem, should stay out of the way etc. But that's them referring to average, ordinary, poor people: take their money then leave them alone (and hand us the money).

When it comes to corporations and their owners... it's subsidies, "security", national interests, tax cuts, incentives.. i.e. corporate welfare.

Personal responsibility is just a code word for "you're on your own, get out of here". 

Examples of it can be heard by that douche Ryan in the US when he smuggly, and seriously, spout on about "dignity of work", "freedom to choose" healthcare... all while addressing a bill that will force poor, elderly, sick, young and poor children off of healthcare benefits and food stamps. 

Don't underestimate the power of that invisible hand of state. Personal choice and responsibility are almost non-existence when faced against such invisible forces.

For example, if the RBA decides to lower interest rate. What are the likely consequences? 

If the gov't decided to define income from investment/capital as not actual income but a special kind of income that deserve less tax... who does that take more from? Who will have to "work harder" to make ends meet?

If they cut funding to university, to trade schools... whose kids will likely attend uni and whose will "decide", voluntarily, to get a job at maccas. 

If they decide to permit loan sharks to charge 25% or any rate they want from "high risk" customers... and at the same time made policies where the wages are low, the cost of living high...


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## sptrawler (24 July 2018)

luutzu said:


> They always say that gov't is the problem, should stay out of the way etc. But that's them referring to average, ordinary, poor people: take their money then leave them alone (and hand us the money).
> 
> When it comes to corporations and their owners... it's subsidies, "security", national interests, tax cuts, incentives.. i.e. corporate welfare.
> 
> ...




How did you manage?


----------



## Smurf1976 (24 July 2018)

sptrawler said:


> Yes, maybe they should just impose limits on credit cards commensurate with your earnings and not issue credit cards unless you have the ability and means to pay it.



Agreed in principle but the banks have created a system where having a credit card is almost essential for some aspects of living.

Try checking into a hotel or hiring something without a credit card. Even a Visa or MasterCard debit card won’t be accepted in some cases, they insist it’s an actual credit card.

Given the banks created this system I think it’s not unreasonable that they ought be prohibited from refusing to issue one credit card with a low limit to anyone with no other cards given it’s borderline essential in practice.

Should the banks not like that idea then just pass a law requiring cash to always be an acceptable form of payment without exception.

In principle I agree with your point but banks have made credit cards pretty much essential for many in practice so I think it’s fair and reasonable that the banks accept the costs of what they’ve created. Either that or go back to cash always being accepted everywhere. Or remove the distinction between a debit and credit card as a workaround.


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## sptrawler (24 July 2018)

Smurf1976 said:


> Agreed in principle but the banks have created a system where having a credit card is almost essential for some aspects of living.
> 
> Try checking into a hotel or hiring something without a credit card. Even a Visa or MasterCard debit card won’t be accepted in some cases, they insist it’s an actual credit card.
> 
> ...




Are the banks the driving force behind this? Or is it the push toward a cashless society?
The Government is pushing towards a welfare card, my guess is the cashless society, is closer than people realise.
I think when it arrives, a lot of todays issues will be resolved, and new ones will be created.


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## SirRumpole (24 July 2018)

I can't think of any reason why a debit card would not be accepted, unless there is some kickback to the vendor from the bank charging exhorbitant interest rates.

Sounds like another job for the Royal Commission if that's the case.


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## HelloU (24 July 2018)

Smurf1976 said:


> Agreed in principle but the banks have created a system where having a credit card is almost essential for some aspects of living.
> 
> Try checking into a hotel or hiring something without a credit card. Even a Visa or MasterCard debit card won’t be accepted in some cases, they insist it’s an actual credit card.
> 
> ...



smurf, are you talking about recent rejection issues? I cannot remember any issue in the way you describe so find it odd (I always select credit at the checkout to have it rejected before I select savings....but that is my dumbness) Or I have some visa debit cards that have code defined uses so sometimes bounce depending on the merchant code but that is another matter again and not something that many others would be exposed to for a general transaction).

Another rejection I can think of is if the transaction has been treated as a 'cash forwarding' and the account did not have enough balance to cover it.....cos your card usually just draws from a linked account automatically to cover the days payments (but will not do this auto draw for this 'cash' transaction type)

Anyway, like I said, I find it strange......


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## luutzu (24 July 2018)

sptrawler said:


> How did you manage?




Good books. Great advise. Ability to inflate my own ego by measuring achievements by whatever I currently have rather than what I "ought to" have  

You definitely do not want to measure my ability based on my extraneous assets and bank account. No sir.


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## sptrawler (24 July 2018)

luutzu said:


> Good books. Great advise. Ability to inflate my own ego by measuring achievements by whatever I currently have rather than what I "ought to" have




Sounds like ability to take responsibility, for your own outcomes, to me. 

Not everyone who starts a business becomes rich, but most who don't work yet smoke and drink, can be assured of being poor.


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## luutzu (24 July 2018)

sptrawler said:


> Sounds like ability to take responsibility, for your own outcomes, to me.
> 
> Not everyone who starts a business becomes rich, but most who don't work yet smoke and drink, can be assured of being poor.




Most of those who were born poor tend to stay poor too. Same with most of those born into wealth... unless they really, really screwed up, it's very hard for them to fall into poverty. Two even became president 


My wife read recently that Selective Schools... which were meant to give poor but talented kids a break into well-resourced schools among talented students. That's fast become the play ground of upper-middle class kids.

See... they have these tests the kids take. What are those tests and who does well in it? Not the "natural talent", but hard, concrete, measurable scholastic test. The kind of test you'd do well if you could afford  private tutoring.

At some $60 an hour... good luck poor kids. There are burgers to flip and driveways to pave.

Nothing against rich people. Just saying that the invisible hands are everywhere at work.


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## HelloU (24 July 2018)

OT
often to do with exposure as well....kids that have always been surrounded by header drivers, gin workers (cotton), roo shooters, drovers and shearers are unlikely to announce on their last day of school that they want to be a neurologist.


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## sptrawler (24 July 2018)

luutzu said:


> Most of those who were born poor tend to stay poor too. Same with most of those born into wealth... unless they really, really screwed up, it's very hard for them to fall into poverty. Two even became president
> 
> 
> My wife read recently that Selective Schools... which were meant to give poor but talented kids a break into well-resourced schools among talented students. That's fast become the play ground of upper-middle class kids.
> ...




Well they will certainly stay poor with that outlook, thank god I didn't have it.


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## luutzu (24 July 2018)

sptrawler said:


> Well they will certainly stay poor with that outlook, thank god I didn't have it.




Thinking happy thoughts don't always make it come true though. 

I guess it's easier to see if you know people in the poorer countries. Plenty of idiots sitting in high places while average smart kids labouring in the great outdoor.


----------



## sptrawler (24 July 2018)

luutzu said:


> Thinking happy thoughts don't always make it come true though.




No, but wallowing around in self pity saying woe is me, I can't do it, always makes it come true.


----------



## luutzu (24 July 2018)

sptrawler said:


> No, but wallowing around in self pity saying woe is me, I can't do it, always makes it come true.


----------



## Smurf1976 (24 July 2018)

sptrawler said:


> Are the banks the driving force behind this?



I'm not sure but I do know there have been a few situations where I'd have been pretty much stuffed without a credit card and cash, EFTPOS or a debit card weren't acceptable.

Checking into hotels is one such situation. In Australia most ask for a credit card. Overseas I've had some refuse to accept a debit card and insist it must be a credit card as such. In all cases this is where accommodation has already been paid and they only want the card in case I decide to smash the room up etc.

Car rentals similar experiences.

I've encountered a few road tolls and the like, situations where there's a physical barrier you can't drive past without payment, where other means of payment weren't impossible but a credit card was an order of magnitude easier in practice.

Overall I just see that a situation has been created where someone not having a credit card is a bit like not having either a drivers license or a passport. You might not need to borrow money and you might have no intention of driving or going overseas but without them you'll still run into hassles with something as simple as hiring machinery or checking into a hotel when they insist on the credit card as security and also require photo ID for which you need either a drivers licence or a passport (and yes I've been asked for photo ID at a hotel a couple of times).

So I thus see that credit cards have become much like the internet or electricity. Strictly speaking not essential but they are in practice and for that reason I think they along with basic transaction accounts ought to be deemed an essential service and subject to appropriate regulation.


----------



## HelloU (24 July 2018)

ok....I have NEVER had a CC but also do not remember brick walls for similar transactions.......maybe u stay at flasher hotels........I only need one hour....two max, but showing off now.


----------



## sptrawler (24 July 2018)

Smurf1976 said:


> I'm not sure but I do know there have been a few situations where I'd have been pretty much stuffed without a credit card and cash, EFTPOS or a debit card weren't acceptable.




I agree, we use a credit card for 95% of our purchases, both here and overseas.
But we do pay off the balance, as it arrives.


----------



## SirRumpole (24 July 2018)

sptrawler said:


> I agree, we use a credit card for 95% of our purchases, both here and overseas.
> But we do pay off the balance, as it arrives.




It doesn't seem much different from a debit card in that case.


----------



## sptrawler (24 July 2018)

SirRumpole said:


> It doesn't seem much different from a debit card in that case.




That's true, very similar, but I'm not sure you get frequent flyers on a debit card.


----------



## sptrawler (24 July 2018)

Here is an example of high personal debt gone wrong, the bank shouldn't have lent them the money, also they shouldn't have asked for it.

http://www.abc.net.au/news/2018-07-18/westpac-accused-of-breaching-responsible-lending-laws/10002370


----------



## Smurf1976 (24 July 2018)

HelloU said:


> smurf, are you talking about recent rejection issues?



I've had it happen twice in the past year or so. In both cases it was the same story - either we have an imprint of a _credit_ card or you sir are not staying in our hotel no matter what. This was after rejecting a debit card.

One night roaming the streets of Adelaide would have been a nuisance but I could have lived. Would have been less keen on doing it for a few days in Germany though due to lack of familiarity with where I was, nowhere to store luggage and so on.

No doubt I would have encountered it far more often had I actually tried to avoid it more often.

So my conclusion is that a credit card is much like a drivers licence. You need it even if you don't actually want to borrow money or drive since it has other functions in practice and many things are set up on the assumption that everyone has one. Owning a mobile phone is much the same too - it's just assumed that everyone has one these days.

I say this as someone who's always had a card but never paid interest because I always pay the balance off in full each month. I wouldn't choose to not have one though due to the reasons I mention.


----------



## HelloU (24 July 2018)

Smurf1976 said:


> I've had it happen twice in the past year or so. In both cases it was the same story - either we have an imprint of a _credit_ card or you sir are not staying in our hotel no matter what. This was after rejecting a debit card.
> 
> One night roaming the streets of Adelaide would have been a nuisance but I could have lived. Would have been less keen on doing it for a few days in Germany though due to lack of familiarity with where I was, nowhere to store luggage and so on.
> 
> ...



cheers, I get it now, The imprint thing is open ended (no dollar figures involved ).....a debit card does not allow that to happen in the same way - the debit requires a discrete value to be nominated.....(my interpretation)...I do remember now plonking a couple of grand on the counter somewhere as shutup money.
on street walking (and adelaide reference but could really be anywhere) that is why they build casinos imo.
see ya


----------



## sptrawler (25 July 2018)

sptrawler said:


> Are the banks the driving force behind this? Or is it the push toward a cashless society?
> The Government is pushing towards a welfare card, my guess is the cashless society, is closer than people realise.
> I think when it arrives, a lot of todays issues will be resolved, and new ones will be created.




Like I said, I believe the cashless society will be upon us sooner rather than later, we just embrace technology.

https://www.theage.com.au/national/...-cash-chorus-for-buskers-20180725-p4ztlv.html

Even buskers are getting pay wave readers. lol


----------



## Smurf1976 (25 July 2018)

sptrawler said:


> Like I said, I believe the cashless society will be upon us sooner rather than later, we just embrace technology.




Only thing I've used cash for in the past 6 months is some household goods I sold via Gumtree and then subsequently spending that cash in the shops to get rid of it. Apart from that I simply don't use it all these days although I do keep some on hand just in case.


----------



## sptrawler (25 July 2018)

Smurf1976 said:


> Only thing I've used cash for in the past 6 months is some household goods I sold via Gumtree and then subsequently spending that cash in the shops to get rid of it. Apart from that I simply don't use it all these days although I do keep some on hand just in case.



I'm the same Smurf, I don't think it will be long, before large denomination banknotes start getting phased out.
Just my opinion, I think it will coincide with the finishing of the NBN rollout, when everyone has access to an internet connection be it wireless or fixed line.
The NBN basically becomes an audit of online access, at the moment, it can't be guaranteed that every building has access.
Therefore it could be argued, that it is unfair to expect people to access online banking, when it isn't available. When it is available, the arguments, will be less convincing.
Just my thoughts,interesting times. IMO


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## moXJO (25 July 2018)

sptrawler said:


> Like I said, I believe the cashless society will be upon us sooner rather than later, we just embrace technology.
> l



I think its a dangerous thing. Cyber attack can basically bring a country to its knees in a cashless society. All this demonizing of cash by the government seems like a further authoritarian control measure.


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## Humid (25 July 2018)

A credit card will show you exactly where you spent for the month and is a great warranty get out of paying card


----------



## sptrawler (25 July 2018)

moXJO said:


> I think its a dangerous thing. Cyber attack can basically bring a country to its knees in a cashless society. All this demonizing of cash by the government seems like a further authoritarian control measure.



I agree, but you think how much extra tax they will get, when all the tradies, lawnmower men, window washers, outback deli's etc all have a tap and go device and have to use it.
It will be quite easy to introduce once you have universal internet access, you just get rid of $20, $50 & $100 notes, then everyone has to handle heaps of $5 & $10 notes or use a tap & go device.
The welfare card is already available and being fine tuned, on small scale sites, so the problems associated with welfare usage will be well and truly sorted out.
I love a conspiracy theory.


----------



## bellenuit (25 July 2018)

Using Cash doesn't make sense for me, if you are able to control your borrowing. I buy almost everything using a Coles Rewards Platinum Master card which give me 2 points (= 1 cent) per dollar for all qualifying purchases anywhere including overseas (and there are no overseas transaction charges). It's mainly government related and utility payments that don't qualify for points (ATO, Synergy etc.).

The card costs $100 pa, but we put about $35k of qualifying purchases on the card last year. That's $350 in points. They are easily redeemable as you can redeem 2,000 points to get a $10 discount every time you check out at Coles. 

Using Cash is just leaving cash on the table (excuse the pun). I am sure there are many other cards that when properly managed can give you back substantially more than the cost of the card. BTW, in case anyone asks, the rate used by Coles for overseas transactions is the Mastercard rate, which is usually less 0.3% off the spot rate, compared to 3% for many bank CCs.


----------



## moXJO (25 July 2018)

sptrawler said:


> I agree, but you think how much extra tax they will get, when all the tradies, lawnmower men, window washers, outback deli's etc all have a tap and go device and have to use it.
> It will be quite easy to introduce once you have universal internet access, you just get rid of $20, $50 & $100 notes, then everyone has to handle heaps of $5 & $10 notes or use a tap & go device.
> The welfare card is already available and being fine tuned, on small scale sites, so the problems associated with welfare usage will be well and truly sorted out.
> I love a conspiracy theory.



In my opinion it will just push more to welfare. Or make those that are already struggling, do it really tough.

International students are all cash. If they attempt to can it then a lot of universities will suffer along with all the other industries that feed of them.

I don't use cash really. But I'd prefer the option.


----------



## HelloU (25 July 2018)

bellenuit said:


> Using Cash doesn't make sense for me, if you are able to control your borrowing. I buy almost everything using a Coles Rewards Platinum Master card which give me 2 points (= 1 cent) per dollar for all qualifying purchases anywhere including overseas (and there are no overseas transaction charges). It's mainly government related and utility payments that don't qualify for points (ATO, Synergy etc.).
> 
> The card costs $100 pa, but we put about $35k of qualifying purchases on the card last year. That's $350 in points. They are easily redeemable as you can redeem 2,000 points to get a $10 discount every time you check out at Coles.
> 
> Using Cash is just leaving cash on the table (excuse the pun). I am sure there are many other cards that when properly managed can give you back substantially more than the cost of the card. BTW, in case anyone asks, the rate used by Coles for overseas transactions is the Mastercard rate, which is usually less 0.3% off the spot rate, compared to 3% for many bank CCs.



can you swipe flybuys card at coles to get points and at the same time pay on card to get Ccard points? (So double points) or does CC act as flybuys card?


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## bellenuit (26 July 2018)

HelloU said:


> can you swipe flybuys card at coles to get points and at the same time pay on card to get Ccard points? (So double points) or does CC act as flybuys card?




Yes, though you don't need to have a separate flybuys card. On the back of the Coles Rewards Mastercard there is a barcode that is the equivalent to that of your Flybuys card. You just place that in front of the scanner (not the EFTPOS terminal) when it asks and it will record your Flybuys number. When you select pay and have more than 2,000 points it will ask you if you want to use those points to get a $10 discount. You pay using the EFTPOS terminal as you would with any other card. BTW, only one $10 discount per purchase is allowed.

You don't get double points as normal purchase at Coles using the Flybuys card just gives you 1 point per dollar and using the card to pay gives you an additional 2. Each point is worth 0.5 cents.


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## noirua (26 July 2018)

Ald123 said:


> So if Australians have the highest personal debt in the world on mortgages and credit cards, how are they going to spend the money to allow business to grow. The only people making any money in Australia it seems are the banks, Woollies and Coles, the real estate agents, big car dealers and the petrol companies and the government. The mass population is paying top dollar for everything and their houses are sky high expensive. What is going to cause these people to have all of a sudden extra wealth that will then be invested? So how exactly is this going to turnaround and become a prosperous lucky country again? Just asking.




The average Aussie is probably 40 years of age and though still in debt has assets, including part value of a house, built up. In addition has contributed to pension plans etc., so the average citizen has higher asset value than debts. Therefore Australians are really quite rich and set to get richer.


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## Wysiwyg (26 July 2018)

sptrawler said:


> You can't protect people from themselves, they have to be allowed to make their own decisions, but with that comes the responsibility for making that decision.



The big R word, responsibility, is not high up on many people's attribute list. It must be a learned thing, not taking responsibility. The laws allow irresponsible people many outs.


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## Humid (10 August 2018)

HelloU said:


> can you swipe flybuys card at coles to get points and at the same time pay on card to get Ccard points? (So double points) or does CC act as flybuys card?



I shop at Woolies and get Qantas points on the CC and then swipe my woolies card and get Qantas points as well 
So double
Just returned from Bali solely using points on Jetstar......cheap holiday


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## HelloU (10 August 2018)

bellenuit said:


> Yes, though you don't need to have a separate flybuys card. On the back of the Coles Rewards Mastercard there is a barcode that is the equivalent to that of your Flybuys card. You just place that in front of the scanner (not the EFTPOS terminal) when it asks and it will record your Flybuys number. When you select pay and have more than 2,000 points it will ask you if you want to use those points to get a $10 discount. You pay using the EFTPOS terminal as you would with any other card. BTW, only one $10 discount per purchase is allowed.
> 
> You don't get double points as normal purchase at Coles using the Flybuys card just gives you 1 point per dollar and using the card to pay gives you an additional 2. Each point is worth 0.5 cents.



Thanks, and Humid,
I must have been alseep at the wheel and missed the earlier response.......
all food for thought in the card battles.....
btw....for flybuys (I do not have a CC attached) it stopped asking me quite some time ago if I wanted to redeem at checkout (and do not remember being restricted to $10) but I now have to logon computer and tell it to redeem.......use $100 each hit (lots of those 2500 bonus points things come my way as my local Coles has new local competition).....
what else....if you are using redeemed money for the shop, it (the redeemed money) does NOT count towards the total that is required to hit the target bonus value - if you are trying to hit another bonus value (hope that makes sense).....but nothing will tell u that.....you just never get the bonus points.


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## PZ99 (24 January 2019)

*The beleaguered Australian dollar faces a growing threat: an addiction to real estate is creating a debt mountain.*

After being the worst-performing developed-nation currency in 2018, the Aussie is set to extend losses this year as rising indebtedness at households and the economy overall make it more likely the Reserve Bank of Australia will cut interest rates, according to both HSBC Holdings Plc and Rabobank. HSBC sees a further 7 percent slide to 66 U.S. cents by year-end, while Rabobank tips 68 cents.

“The RBA just sat there watching the housing bubble grow for the past couple of years,” said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. “You’re in a doom loop. Now that the Federal Reserve is finally on hold, the RBA can finally talk about cutting again -- and they will.”

Australia’s household debt-to-income ratio has skyrocketed to 189 percent from 67 percent in the 1990s, according to data compiled by the RBA. The increase has gathered pace in recent years as a decline in interest rates encouraged households to take on more borrowing, while an easing of constraints on bank lending increased the funds available, RBA Assistant Governor Michele Bullock said in a speech in September.

Australia’s dollar has already tumbled for five straight quarters -- including a decline of 9.7 percent last year -- as the U.S.-China trade war and signs global growth is slowing has sapped demand for the export-reliant currency.

After ending last year at 70.49 cents, the Aussie briefly slid to 67.41 cents on Jan. 3 in a so-called “flash crash” when a holiday in Japan led to disjointed Asian markets. That was the weakest since the depths of the global financial crisis in March 2009. The currency was at 71.37 cents at 5 p.m. on Wednesday in Sydney.

HSBC is bearish on the Aussie due to the country’s debt binge and also the widening yield discount on Australian bonds compared with U.S. Treasuries, according to David Bloom, global head of foreign-exchange research in London.

“What does concern us about Australia is that their interest rates structure is below that of the U.S., and we would argue that the U.S. is a lower risk profile,” he said, referring to the nation’s debt levels. “You’re getting paid less for the Antipodeans, and you get more risk.”

There’s a 39 percent chance the Aussie will touch 66 cents by year-end, according to data compiled by Bloomberg based on option prices. A year ago, the same projection for December 2019 had a probability of only 14 percent.

‘Keep Cutting’

Rabobank sees the RBA cutting the nation’s benchmark rate by another 100 basis points from the already record-low 1.5 percent to help manage the debt burden, Every said.

“When you have an economy that’s piling on debt the way Australia does, the currency gets well supported because everything looks fine and dandy in this growth bubble,” he said. “And then as soon as you reach the end of the rope, the only thing the RBA can do is cut -- and keep cutting.”

While HSBC and Rabobank are bearish, the broader market is more positive. The Aussie will strengthen to 74 cents by year-end, according to the median estimate of currency forecasters compiled by Bloomberg.

Morgan Stanley says the Aussie will decline to 67 cents in the second quarter before recovering to end the year at 71 cents.

“Markets are currently pricing in about a 50 percent probability of an RBA rate cut over the next 12 months, fairly reflecting the economic weakness,” Morgan Stanley strategists including Hans Redeker in London, wrote in a research note. “Under these dynamics, we see further Australian dollar downside.”

https://au.investing.com/news/forex...eatens-to-drag-down-australian-dollar-1368801


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