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Well you've answered your own question and as long as you are happy with the outcome thats great, it is those who spend everything then bitch about the fact they are broke that get up my nose.
Well I do like horses and a jet-ski would look pretty cool behind the ute.
over9k
So I didn't tell my wife, but I...
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Yes, as long as we all get pay rises etc commensurate with it.
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In theory that's absolutely true.
It's the in practice detail where difficulties arise and there's a few issues there.
First is simply bracket creep. As your gross income goes up x%, your take home income after Income Tax goes up by a lesser % simply because you're moving up the scales into a higher bracket. Unless government constantly raises the income thresholds, which it almost certainly won't or at least not without a considerable lag, that in due course captures everyone.
Second is that pay rises will usually lag inflation in practice. In large businesses and the public service CPI itself is often an input to pay rates. They'll look at last year's CPI and apply that to next year's pay rise +/- anything that's been negotiated. That's extremely common in situations where there's a large workforce of people all at the same grade / level which pegs them to a particular pay rate with no room for individual negotiation.
Small business well it's often the case that getting a pay rise means getting a new job and that of itself ensures that it lags for most workers.
End result, in practice, is real take home pay growth fails to keep pace with inflation for most when prices are rising quickly.
Then there's the compounding of CPI itself using that same approach. Eg councils and utilities very often apply a CPI price increase automatically. The higher CPI goes, the higher they raise charges.
In theory that's absolutely true.
It's the in practice detail where difficulties arise and there's a few issues there.
First is simply bracket creep. As your gross income goes up x%, your take home income after Income Tax goes up by a lesser % simply because you're moving up the scales into a higher bracket. Unless government constantly raises the income thresholds, which it almost certainly won't or at least not without a considerable lag, that in due course captures everyone.
Second is that pay rises will usually lag inflation in practice. In large businesses and the public service CPI itself is often an input to pay rates. They'll look at last year's CPI and apply that to next year's pay rise +/- anything that's been negotiated. That's extremely common in situations where there's a large workforce of people all at the same grade / level which pegs them to a particular pay rate with no room for individual negotiation.
Small business well it's often the case that getting a pay rise means getting a new job and that of itself ensures that it lags for most workers.
End result, in practice, is real take home pay growth fails to keep pace with inflation for most when prices are rising quickly.
Then there's the compounding of CPI itself using that same approach. Eg councils and utilities very often apply a CPI price increase automatically. The higher CPI goes, the higher they raise charges.
Interesting, thanks.
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sadly , what you say has a modern logic and wide acceptance
back when both my parents were alive ( mid 1960s ) the only major debt the family had was home mortgage , the family car was second hand bought for cash ( the last one funded by the savings caused by paying the house mortgage several years early )
a new ( old ) fridge you saved up for , car ( saved up for ) etc etc , and even today i have never had a credit card in my life ( saving up for a special item has been a family trait )
now i am not practitioner in the charts , but that doesn't make them useless , you can still see the trends and the changes in trends ( volatility )
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YEP , worse than the hay-fever season ( at least the hay-fever season is only a few months a year )
mind you , life ( for some ) will be unimaginable chaos if we have a 'credit crunch '
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I have never borrowed money in my life, until recently I thought this is reasonably normal, seems not
You paid cash for a house??
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Not yet, but that is the plan
I make a exception for a mortgage, that is definately not normal. I mean like credit cards, after pay etc
I am thinking about buying my next car with cash, I mean literally wads of paper dollars. The car is a D-max probs around $50k+.. do banks even have that much cash to handover the counter??
I reckon the car salesman will wet his pants. I will pull out the pile dollars in a brief case or whatever and say.. I want a bull bar, sports bar, tub lining to all for free. I am paying cash. Dude won't be able to control himself.
Taking my dog and an baseball bat with me in case someone tries to rob me.
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they won't accept it, tried it lol they will tell you anywhere between 2k to 10k is the max a business will take. Maybe for a private sale you will get lucky. Don't know about now, 10 years ago I bought a car with 25k cash and nobody said nothing, bank gave it over the counter and the seller took it. 10 years forward you will probably be looked at as a crim ?
However my friend said he sold 30-40k of bullion recently, said he asked for cash. I got very curious and quizzed him but he reckons it was business as usual the dealer needed a day notice and the bank took it over the counter pretty casually
p.s carsales man hate doing cash sales, they get commission on up selling finance
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yes i did once , i took out a ( sub-prime ) mortgage on a block of land , NOW i look clever ( the land value has risen 4000% ) but that mortgage in the mid 1970's/1980's had me wondering if i did the right thing at all
i still maintain a very low-debt life-style ( once bitten , twice shy )
besides i discovered lay-by to acquire those 'must-have items' ( pay installments FIRST take it home later )
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A mortgage is a exception, definately good debt and investment into your future. However my path in life has not allowed me one, been walking the big uphill road on my own always, hence my nick
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you had better check with your bank first ( some of them need a couple of days warning ) , AND those folks worried about money-laundering and crime ( the government didn't commit ) too
$50k to $100k you can do it with ankle wallets and money belts ( wear calf high leather boots and long pants ) and a fairly slim satchel ( assuming it is in $50s and $100s ) ( big fancy metal cases , draw attention to you , especially the ones with handcuffs )
extra hint don't dress up too flashy , just enough to look like another punter kicking tyres in the show-room
don't scare the salesman too much , heart attacks are surprisingly common among them
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about 1982 it sure didn't feel like it ( good debt or a wise investment ) , just saying 17.5% fixed isn't the best debt to have in an uncertain job-market
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An article on inflation by the ABC, written by a business reporter, with a good understanding of economics.
www.abc.net.au
Some people benefit from rising inflation, but millions don't. What's your situation?
When the value of money changes, it doesn't change equally for everyone, writes Gareth Hutchens
www.abc.net.au
Mohammed Hazabig'un
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A few Canaries in the Mine are dropping off aren't they @over9k ? Building Permits down to -18.5 from 42 Business and Consumer Confidence down. Is Inflation the only thing keeping us going - it's buy now effect on Consumers?
Employment figures out Thursday (for Aus).
Employment figures out Thursday (for Aus).
Mohammed Hazabig'un
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And Wednesday Building Permits (US) out, Friday existing home Sales (US) out. They won't be good. More Canaries. Another big sell off, assuming we even get that far?
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A mortgage is only good debt, when it is weighed against what it costs, take for example someone who works in a city and rents an apartment for $600/week.
That apartment may be worth $1.3m to buy + say $10k a year in associated costs.
Right what if that person took a loan out to buy that apartment, how much better off would he be? I wont do the sums, because I'm lazy.
Now what if that person borrowed $600k and bought a 4x2 out in the suburbs, close to transport,schools and facilities and rented it out at $500/wk?
He stayed in the apartment at $600 and got a mate in to share the rent.
Not saying it is for everyone, but I'm not a great believer in borrowing upto the eyeballs to buy your house, which isn't deductable and is really only saving you rent.
I would rather go bush, earn mega bucks and rent, then at the same time buy an investment property that I want to move into eventually, than stay in the city on the treadmill and try and pay for it with after tax dollars while I live in it.
Just different ways of looking at the same issue IMO, there isn't a right and a wrong, only what suits your circumstances and sacrifices.
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