Australia's high personal debt

[SirRumpole]

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]

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]

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]

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]

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

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How does Afterpay work? AUS

• 6 hours ago
  
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Apparently it is very popular with young people. lol

 

[luutzu]

Must watch.
Wealth Inequality in 'merka.

The numbers are revolutionary.

 

[Wysiwyg]

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]

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]

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.

 

[luutzu]

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.

 

[PZ99]

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

 

[sptrawler]

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.

 

[luutzu]

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.

 

[sptrawler]

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]

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.

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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".

 

[sptrawler]

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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.

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.

 

[luutzu]

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.




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.

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...

 

[sptrawler]

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...

How did you manage?

 

[Smurf1976]

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.

 

[sptrawler]

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.

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.