How will Australia's younger generation get ahead?

[sptrawler]

If the capital gains tax exemptions are reduced, if the negative gearing tax incentives are reduced, if the franking credit rebates are reduced, how do young married couples build a nest egg for retirement?
I'm not being funny here, but without any investment advantage and with Bank lending standards due to tighten, how would a young working couple save for their retirement and be financially independent?
It is going to be really hard for a young couple, to do anything, other than pay off their own house.
Oh well, we end up just like the U.S.A and the U.K, no dream, no opportunity, no hope. lol

That was what I've always like about Australia, we were different, if you got of your arse took a risk, there was always opportunity.
Yes there was a tax advantage, but there was also a risk involved.
We are just going to make it that the rich speculate, because they have the money and the plebs stay the plebs because they have no leverage. LOL
The World is certainly becoming a level playing field, for the plebs. IMO

 

[PZ99]

It's not that hard, really. It all comes down to working harder and less gimme-gimme-gimme.

I'm sure plenty of us will post in this thread about how they had to "do without" to get ahead.

Anyone remember the cocktail loans? You had to take out a personal loan to make a deposit for a home loan and then you had ridiculously high levels of interest to service both loans.

No Govt handouts in those days and your personal tax was much higher than today.

Investing? Well, that's even better. Your employer sponsors nearly 10% of your wage every month and you now have the freedom to invest it where you want and the technology to make it happen instantly from anywhere in the world.

Speculate away!

 

[SirRumpole]

People's nest eggs in retirement are their own homes where they can live rent free when their incomes reduce after they retire.

No one needs to negative gear to "get ahead", if people have the cash they can put it into super or shares that don't deprive others of the security of home ownership.

 

[SirRumpole]

How some people like to retire.

http://www.abc.net.au/news/2018-05-...as-because-they-cant-afford-australia/9762418

 

[luutzu]

If the capital gains tax exemptions are reduced, if the negative gearing tax incentives are reduced, if the franking credit rebates are reduced, how do young married couples build a nest egg for retirement?
I'm not being funny here, but without any investment advantage and with Bank lending standards due to tighten, how would a young working couple save for their retirement and be financially independent?
It is going to be really hard for a young couple, to do anything, other than pay off their own house.
Oh well, we end up just like the U.S.A and the U.K, no dream, no opportunity, no hope. lol

That was what I've always like about Australia, we were different, if you got of your arse took a risk, there was always opportunity.
Yes there was a tax advantage, but there was also a risk involved.
We are just going to make it that the rich speculate, because they have the money and the plebs stay the plebs because they have no leverage. LOL
The World is certainly becoming a level playing field, for the plebs. IMO

I think it's because of the generous capital gains exemption and negative gearing that's making it harder for young families and working people to get ahead. They can barely get their head above water because of those two.

With those two in place, high income earners no longer own just two or three houses, they own as many as it take to reduce their income tax to zero.

With their cash (and tax incentive) in the market, house prices goes up and beyond most young families, forcing them to rent for a long, long time.

So instead of young working people affording their home, start paying it off and save for that retirement... they pay the rent that pay the landlord's loss-making, but tax minimising, investment scheme.

Driving up property prices, reducing the tax revenue from high income earners.

 

[Triathlete]

If we take away the tax benefit for investors will this not cause another problem with slowing down the building industry which will then cut down jobs?so we end up with another problem...also last time they took negative gearing away this caused rents to increase as well only lasted about 2 years i think......I do understand the problem with first timers tryong to get into their first home though.....

 

[SirRumpole]

If we take away the tax benefit for investors will this not cause another problem with slowing down the building industry which will then cut down jobs?

The majority of negative gearing is on existing property and therefore does nothing for the building industry.

 

[Sdajii]

It's easier than ever. I speak to people in their early 20s complaining about having missed out on too many years without doing enough international travel. They buy $5 cups of coffee twice per day (literally costing thousands of dollars per year, just for that) and own big screen televisions etc. Let's not forget the avocado. You also never see a dinged up old car on the road, they're all driving around in financed flash sets of wheels, wearing designer clothes, etc.

If you have the same mentality of work your arse off and save as much as you can like their grandparents did, it's easier than ever. The only difficulty is overcoming the social pressure to make yourself look wealthy starting from when you're a teenager.

 

[luutzu]

It's easier than ever. I speak to people in their early 20s complaining about having missed out on too many years without doing enough international travel. They buy $5 cups of coffee twice per day (literally costing thousands of dollars per year, just for that) and own big screen televisions etc. Let's not forget the avocado. You also never see a dinged up old car on the road, they're all driving around in financed flash sets of wheels, wearing designer clothes, etc.

If you have the same mentality of work your arse off and save as much as you can like their grandparents did, it's easier than ever. The only difficulty is overcoming the social pressure to make yourself look wealthy starting from when you're a teenager.

Kids and poor people nowadays ey.

Get off your arse and see a financial advisor, you bum!

 

[Sdajii]

Kids and poor people nowadays ey.

Get off your arse and see a financial advisor, you bum!

So the financial advisor can tell me that despite never having been in any debt, not having worked very hard, and spending most of my life on holiday (about 10 international flights so far this year, my next few months of travel planned, haven't had a day job for quite a few years, father left when I was 4 years old, mother didn't even feed me properly, hardly was born with a silver spoon in my mouth - I spent the night of my 21st birthday homeless, I slept in my broken down car, and at that point figured I needed to do something with myself, took a job in a factory and worked up from there) that I should be doing it tough?

If you're Australian and think life is financially difficult you're ignorant and/or stupid. Anyone who genuinely wants to find work and isn't literally disabled can find it, and anyone who isn't extravagant with money can buy a home, at least a modest one. The main problem is that what most Australians today think of as frugal is absolutely extravagant, and rather than work on making their situation better they prefer to whinge and expect someone else to fix the problem for them.

 

[Value Collector]

"Spend less than you earn and invest the difference"

it's advice that is as old as the hills but it still works and will always work.

Of course some people in politics seem hell bent on reducing the net return those of us who invest our money back into the economy can get, but following the advice will work over time.

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One important thing is though that many people don't know how to invest outside of speculation in buying real estate or bitcoins.

There is a real lack of "Investment Mindset" in Australians, I don't know how to fix that, I have given up even trying to teach family members, its just to hard, the urge to follow fads like bitcoin etc is just to strong, and longterm investment in good companies seems boring to them, or they are easily spooked at the first sign of market fluctuations.

---------

It might seem selfish, But I have grown to feel that time spent trying to teach someone is time that I could be using to learn something knew myself, So now I just stick to working on my stuff, and it a family member asks anything I just tell them to buy the index and if they bring up any market or investment myths, I just quickly agree to disagree.

 

[Value Collector]

You also never see a dinged up old car on the road, .

yeah you do, I am driving it. (at least until my Tesla Model 3 reservation comes)

 

[luutzu]

So the financial advisor can tell me that despite never having been in any debt, not having worked very hard, and spending most of my life on holiday (about 10 international flights so far this year, my next few months of travel planned, haven't had a day job for quite a few years, father left when I was 4 years old, mother didn't even feed me properly, hardly was born with a silver spoon in my mouth - I spent the night of my 21st birthday homeless, I slept in my broken down car, and at that point figured I needed to do something with myself, took a job in a factory and worked up from there) that I should be doing it tough?

If you're Australian and think life is financially difficult you're ignorant and/or stupid. Anyone who genuinely wants to find work and isn't literally disabled can find it, and anyone who isn't extravagant with money can buy a home, at least a modest one. The main problem is that what most Australians today think of as frugal is absolutely extravagant, and rather than work on making their situation better they prefer to whinge and expect someone else to fix the problem for them.

Tell me about it. Bloody coffee with milk! And often two sachet of sugar!

And freaking holidays! Don't they know that at $50,000 a year income, after the tax, the bills, the food, the noodles and tap water... why they can have at least $10,000 in savings.

At an average $1.2M... scrap that, modest $600K... scrap that... modest $450K apartment needing 20% deposit... all they need is save up for 9 years and pray to all the gods that apartment wouldn't go up in a decade.

Easy!

 

[SirRumpole]

There is a real lack of "Investment Mindset" in Australians, I don't know how to fix that,

Maybe start at school.

 

[Sdajii]

Tell me about it. Bloody coffee with milk! And often two sachet of sugar!

And freaking holidays! Don't they know that at $50,000 a year income, after the tax, the bills, the food, the noodles and tap water... why they can have at least $10,000 in savings.

At an average $1.2M... scrap that, modest $600K... scrap that... modest $450K apartment needing 20% deposit... all they need is save up for 9 years and pray to all the gods that apartment wouldn't go up in a decade.

Easy!

Most people in this world would be pretty happy to earn $10k per year, let alone save $10k, and they live in far worse conditions than Australians, even poor ones living on welfare in housing commission, would consider acceptable human living conditions, and they work far harder than most Australians to earn what they have, and they complain less. If one was to work as hard as most people in the world and live as frugally as most people in the world, in Australia with all the financial support, free healthcare, etc etc, they would save a lot more than $10k per year even on minimum wage. When I was a young fella with no tertiary education, around 20 years ago, I took a job in a factory on minimum wage, rented a little bungalow in someone's back yard, and saved over $10k that year, around 50% of my wage after tax. It's easier now than it was 20 years ago.

It's laughable that you would even mention $1.2M in the context of a modest dwelling. Modest doesn't mean mid range. $1.2M is up around double the national median price!

Sure, if you want to live a luxurious lifestyle and buy a nice car and a nice house and you you're on minimum wage and don't want to get off it, you're going to be disappointed; just as disappointed as you deserve to be. I have never whinged about my situation. I've been through very hard times and very good times, and if things are tough I only have myself to blame. If you are the sort of person who wants to blame others, you're not taking responsibility for yourself... so... you're not likely to take responsibility for yourself! It's self evident, but so many whingers miss it.

 

[explod]

So the financial advisor can tell me that despite never having been in any debt, not having worked very hard, and spending most of my life on holiday (about 10 international flights so far this year, my next few months of travel planned, haven't had a day job for quite a few years, father left when I was 4 years old, mother didn't even feed me properly, hardly was born with a silver spoon in my mouth - I spent the night of my 21st birthday homeless, I slept in my broken down car, and at that point figured I needed to do something with myself, took a job in a factory and worked up from there) that I should be doing it tough?

If you're Australian and think life is financially difficult you're ignorant and/or stupid. Anyone who genuinely wants to find work and isn't literally disabled can find it, and anyone who isn't extravagant with money can buy a home, at least a modest one. The main problem is that what most Australians today think of as frugal is absolutely extravagant, and rather than work on making their situation better they prefer to whinge and expect someone else to fix the problem for them.

Not sure where your from Sdajii, but jobs are very hard to get here at Frankston. As a member of the Australian Unemployed Workers Union, a retired policeman and now 72, I can say that compared to productive Australia a few years back there are just no jobs for the average young fellow today. The allowance they are expected to live on (if they can get through the red tape) is less than a packet of smokes.

 

[luutzu]

Most people in this world would be pretty happy to earn $10k per year, let alone save $10k, and they live in far worse conditions than Australians, even poor ones living on welfare in housing commission, would consider acceptable human living conditions, and they work far harder than most Australians to earn what they have, and they complain less. If one was to work as hard as most people in the world and live as frugally as most people in the world, in Australia with all the financial support, free healthcare, etc etc, they would save a lot more than $10k per year even on minimum wage. When I was a young fella with no tertiary education, around 20 years ago, I took a job in a factory on minimum wage, rented a little bungalow in someone's back yard, and saved over $10k that year, around 50% of my wage after tax. It's easier now than it was 20 years ago.

It's laughable that you would even mention $1.2M in the context of a modest dwelling. Modest doesn't mean mid range. $1.2M is up around double the national median price!

Sure, if you want to live a luxurious lifestyle and buy a nice car and a nice house and you you're on minimum wage and don't want to get off it, you're going to be disappointed; just as disappointed as you deserve to be. I have never whinged about my situation. I've been through very hard times and very good times, and if things are tough I only have myself to blame. If you are the sort of person who wants to blame others, you're not taking responsibility for yourself... so... you're not likely to take responsibility for yourself! It's self evident, but so many whingers miss it.

When you're doing a rat race, it's not supposed to be one to the bottom.

Sure there are those in the world who live on less than a dollar a day and that's a good day. Just that $1 a day in Australia couldn't even get me a can of coke.

I don't know of poor whingers to be honest. And I know poor people. They all just shrugs and say, houses are too high for me, can't afford it.

They don't blame the world, don't blame themselves. Just go to work and try to save up.

So unless stating a fact that house prices and the cost of living is getting steep is considered a whinge. Meh.

You should looked into taking a course on "applied statistics". Well, not literally. But you can't apply statistics like "the average house prices around Australia" is xyz so why are Sydneysiders whinging about high prices.

There's the family, friends, jobs jobs jobs, kids schooling, not wanting to live like the pioneers back in the days. So people can't simply move wherever their pocket can afford a house.


And if you compare the figures on real wage growth vs cost of living. Despite what you have gone through, the young aren't having it easier nowadays.

We, the Western countries, are going to miss the trend that our children will be better positioned than we were.

Just saw a stat that in the US, an average worker today earn slightly less than the same cohort earns back in the 70s.

Gas, electricity, food, housing... those haven't exactly gone nowhere have they?

 

[explod]

Jobs are disappearing. But ANYOLEHOW, the climate will bring early retirement to everybody lol.

Companies are folding in bankruptcy and many employees of years standing are not getting their entitlements (super, LSL etc)

We should not have a private building industry. A home (as per Maslow's Law) should be a state right to everyone. The same in education. State run and owned education should be provided free to every citizen till 3rd year university. How can we attest to true democracy unless we are all educated to the full level of or choosing.

 

[Value Collector]

Maybe start at school.

Yeah, more needs to be taught at schools about the basic's of investing.

Everyone understands by the time they a 6 years old the concept of having a job and earning money by contributing labour to the economy and that they should get a job to earn money.

However many adults don't seem to understand that investing their savings (capital) back into the economy is also a valid way (and much needed way) to earn money.

A lot of adults even look down on the idea that some one might earn their money by investing rather than working full time, and that a "worker" is some how morally superior to an "investor", this is simply because they don't understand the concept that the economy requires both labour and capital and rewards both, and even if you are a "worker" you should probably be saving some of your earnings and be an investor to.

I have actually had some one say that living off investment earnings is glorified dole bludging, what they don't understand is that their earnings as a "worker" are increased by the investment made by investors, and not all of their "production" is a result of strictly their labour, because most likely the output of their labour has been multiplied by the addition of investment capital, and those people suppling the capital deserve a slice of the much bigger pie they assisted creating.

 

[Value Collector]

We should not have a private building industry. A home (as per Maslow's Law) should be a state right to everyone. The same in education. State run and owned education should be provided free to every citizen till 3rd year university. How can we attest to true democracy unless we are all educated to the full level of or choosing.

We should all have access to water too, But its a good idea to put a cost on it, to prevent waste.