Why are some people poor?

[awg]

That's all very well, but no man can guarantee himself another 30 years.

What is freeganism? (Obviously I'm missing something obvious here.)


That will obviously change as you age, as will your risk profile.

"We forge the chains we wear in life."
- Charles Dickens

Chains of habit are too light to be felt until they are too heavy to be broken.
Warren Buffett

I'm all for freeganism, but it's hard to remain dignified whilst dumpster diving.

Was it Dickens?.... about expenses and income being one penny different etc etc?

No.. dont think my 30yrs change cause wanna croak with larger capital base than have now...its called estate planning (also easy to run out if live too long)

If I had no children, grandchildren, would be different

I feel dignified when practising freeganism, abhor waste and the throwaway mentality..each of my properties has its own magnesium-base lawnmower, picked up from roadside chuck-outs, takes only a few minutes for me to fix them, last forever.
New steel ones rust out in a short time, cannot be repaired.

 

[Tysonboss1]

No.. dont think my 30yrs change cause wanna croak with larger capital base than have now...its called estate planning (also easy to run out if live too long)

If I had no children, grandchildren, would be different

I plan to give away my capital base when I die to charities that will change to world for all mankind, hopefully I can give the bulk away before I die. When it comes to money I will give my children nothing but advice.

Hopefully I can raise my kids well enough that they don't need welfare assistance from me.

 

[Julia]

, hopefully I can give the bulk away before I die.

The difficulty is in knowing when you're going to die. I'd like to do as you suggest, too, but would then be a bit put out if I lived a lot longer and went back to being poor in the last years.

 

[prawn_86]

Hopefully I can raise my kids well enough that they don't need welfare assistance from me.

I think it is nice to give your kids something.

I got a small inheritance from both sides of grandparents and will have some coming when my old man pegs it. I got a small amount throughout uni, but it was only enough that i appreciated it and didnt expect it

 

[Tysonboss1]

I think it is nice to give your kids something.

I got a small inheritance from both sides of grandparents and will have some coming when my old man pegs it. I got a small amount throughout uni, but it was only enough that i appreciated it and didnt expect it

They will probably get a bit from what is remaining in my personal accounts, but as for the company and investment trusts, they will get none of it.

To be honest I want nothing from Mum and Dad when they pass, I would much rather see them enjoy the cash in their twilight years making their life a bit easier and enjoying the finer things.

I want their house, But I plan on offering them some sort of deal where they live in it rent free and I purchase it over say 20 years like a reverse morgatege. I am far more likly to hand money up than pass it down.

 

[Tysonboss1]

The difficulty is in knowing when you're going to die. I'd like to do as you suggest, too, but would then be a bit put out if I lived a lot longer and went back to being poor in the last years.

yeah thats the hard bit isn't,

You could have your cash invested in income producing assets and live on the distributions and then when you die have them liquidated and the capital sent to a few charities of your choice.

 

[burglar]

The difficulty is in knowing when you're going to die. I'd like to do as you suggest, too, but would then be a bit put out if I lived a lot longer and went back to being poor in the last years.

When you get really old you can't travel overseas, you can't drive!
Oh, you get the drift.

The things you can do dwindles towards nothingness, ...

I would risk being poor in the last years.

 

[Julia]

When you get really old you can't travel overseas, you can't drive!
Oh, you get the drift.

The things you can do dwindles towards nothingness, ...

I would risk being poor in the last years.

Would you? Well perhaps you're not taking into account that evolving government policy is that we will all have to make a substantial contribution to our own aged care.

The costs of providing full taxpayer funded aged care, given the blow out in the aging population, are simply not sustainable, so there is going to have to be a new model introduced where we pay for the level of care we want.

Certainly distasteful if this is going to mean that we get better care if we are able to pay for it, but essentially necessary.

So far the family home has been quarantined from assessment in aged care payments.
The new suggestion is that it won't be in future. Seems fair enough to me.
Why should succeeding generations of taxpayers have to fund our retirement because we want to hold on to the family home to pass on to our children?

No reason I can think of.

 

[Tysonboss1]

Would you? Well perhaps you're not taking into account that evolving government policy is that we will all have to make a substantial contribution to our own aged care.

The costs of providing full taxpayer funded aged care, given the blow out in the aging population, are simply not sustainable, so there is going to have to be a new model introduced where we pay for the level of care we want.

Certainly distasteful if this is going to mean that we get better care if we are able to pay for it, but essentially necessary.

So far the family home has been quarantined from assessment in aged care payments.
The new suggestion is that it won't be in future. Seems fair enough to me.
Why should succeeding generations of taxpayers have to fund our retirement because we want to hold on to the family home to pass on to our children?

No reason I can think of.

Use the family home to fund your aged care, reverse morgatage style. Or setup an annuity funded by the sale of your home to see you through the final years, and give the rest away, you family can have the remainder of the annuity on your death as a little bonus.

 

[burglar]

... we will all have to make a substantial contribution to our own aged care.

As much as it pains me to say ... I think you got me there!

 

[brianwh]

Having browsed through several pages of the posts on this thread, I have come to the (not surprising?) conclusion that they are written by people who are not poor. For the most part I am not detecting much empathy with or sympathy for people who find themselves in depressed financial circumstances. And it made me think of someone I know very well and perhaps his circumstances may provide another perspective.

He is part of a small pool of aged pensioners, all in their late sixties, early seventies who are on call, seven days a week, to ferry drive vehicles for a rental car agency. The drive is often 200 plus kilometres each way and includes some city driving. For this they get paid $6 per hour!!!! This begs the obvious questions: why would they work for such a pittance and/or why don't they demand award rates. Their answer is that given their age, the prospect of getting any other work to supplement their pension is nil; and when they have made representations to their employer, they have been told that he is treating them as contractors and he can pay what he likes. I don't think any of them have high levels of education and would have little idea of what recourses they have they have open to them. And of course there is no union involvement at the place.

You might be able to make a case that this story is extreme and not likely to be in any way representative. But I suspect that there are many similar stories in this age group particularly. These men worked all their lives, raised families, in most cases, on one income and now find themselves unable to improve their lot in even a small way. And meantime they are vulnerable to expoitation.

 

[inq]

What does sympathy have to do with it?

In the end, you have the choice between trying to set yourself up financially for retirement (A good period of 45 years between 20 and 65) and if you don't so be it.

I cannot wait for old age pensions to be grandfathered out of welfare, it will result in much greater accountability of individuals.

 

[Julia]

You might be able to make a case that this story is extreme and not likely to be in any way representative. But I suspect that there are many similar stories in this age group particularly. These men worked all their lives, raised families, in most cases, on one income and now find themselves unable to improve their lot in even a small way. And meantime they are vulnerable to expoitation.

That's a sad story, Brian.

 

[Julia]

What does sympathy have to do with it?

In the end, you have the choice between trying to set yourself up financially for retirement (A good period of 45 years between 20 and 65) and if you don't so be it.

I cannot wait for old age pensions to be grandfathered out of welfare, it will result in much greater accountability of individuals.

inq, it has to do with the culture of the time. A couple of generations ago, there was a genuine belief that if one paid all tax due, the ultimate benefit would include a pension in retirement that was sufficient to live on.

Such a belief certainly seems naive now.

And yes, perhaps more accountability should be happening. I think it's gradually happening as more people appreciate that anything offered by governments will simply not be enough.

But we will always have a proportion of the population who will need support.
We're simply not all born equal, in terms of intrinsic capability or opportunities.

You might feel invincible, but anyone can have a sudden catastrophic event, illness or accident which will render them unable to look after their own needs, physical and financial.

 

[burglar]

... there was a genuine belief that if one paid all tax due, the ultimate benefit would include a pension in retirement that was sufficient to live on. ...

http://www.centrelink.gov.au/internet/internet.nsf/payments/age_eligible.htm

" Age pension age
From 1 July 2017, the qualifying age for Age Pension will increase from 65 to 65.5 years. The qualifying age for Age Pension will then rise by 6 months every 2 years, reaching 67 by 1 July 2023."

And that is just the age requirement!!

I am glad I looked that up because it is not as severe as I thought.
(I turn 65 before it comes in)

 

[inq]

Oh I agree Julia,

There indeed will always be those in need, however I believe they should be captured under disabled, permanently injured payments etc. not an old age pension.

Thankfully the government seems to be moving in this direction in by winding back the old age pension, now if they can just move towards fixing the dole.

 

[brianwh]

What does sympathy have to do with it?

In the end, you have the choice between trying to set yourself up financially for retirement (A good period of 45 years between 20 and 65) and if you don't so be it.

Inq I suggest a lot of people don't have the choice to set themselves up. The reasons for this are many, but clearly not everyone has the same opportunities to to provide a comfortable retirement for themselves. I was making the point that my friend (and probably his work mates) was a case in point. And mitigating against them improving their lot is a business person who will probably provide for his or her own comfortable retirement at their expense.

 

[Tysonboss1]

Having browsed through several pages of the posts on this thread, I have come to the (not surprising?) conclusion that they are written by people who are not poor. For the most part I am not detecting much empathy with or sympathy for people who find themselves in depressed financial circumstances. And it made me think of someone I know very well and perhaps his circumstances may provide another perspective.

He is part of a small pool of aged pensioners, all in their late sixties, early seventies who are on call, seven days a week, to ferry drive vehicles for a rental car agency. The drive is often 200 plus kilometres each way and includes some city driving. For this they get paid $6 per hour!!!! This begs the obvious questions: why would they work for such a pittance and/or why don't they demand award rates. Their answer is that given their age, the prospect of getting any other work to supplement their pension is nil; and when they have made representations to their employer, they have been told that he is treating them as contractors and he can pay what he likes. I don't think any of them have high levels of education and would have little idea of what recourses they have they have open to them. And of course there is no union involvement at the place.

You might be able to make a case that this story is extreme and not likely to be in any way representative. But I suspect that there are many similar stories in this age group particularly. These men worked all their lives, raised families, in most cases, on one income and now find themselves unable to improve their lot in even a small way. And meantime they are vulnerable to expoitation.

So they are on the pension, and have hobby with a very small income attached, I can hardly see how this person can be called poor.

How ever their life could have been improved if they had a better saving/spending habits during their working life.

 

[Tysonboss1]

inq, it has to do with the culture of the time. A couple of generations ago, there was a genuine belief that if one paid all tax due, the ultimate benefit would include a pension in retirement that was sufficient to live on.

.

And it is true, My Nanny has a decent standard of living on the pension. I must admit though it is easier for a pensioner who owns their own home. Which Is one of the reasons I recommend home ownership as one of the cornerstones of financel stratergy.

 

[Julia]

So they are on the pension, and have hobby with a very small income attached, I can hardly see how this person can be called poor.

Depends on whether they are on a single pension or are part of a married couple getting almost twice as much to meet all the same expenses. i.e. the single pensioner even with his own home still has to meet most of the same expenses such as rates, water, electricity, insurance. That can be very tight on a single pension.

How ever their life could have been improved if they had a better saving/spending habits during their working life.

Perhaps, but we don't know what difficulties they may have encountered before reaching age pension age. If e.g. there has been a relationship breakdown with the assets split that couple are then individually going to be in a disadvantaged financial situation. Or people can be retrenched, ill, etc during what would usually be working years.

And I don't want to interpret for Brian, but I think he was also pointing out the pretty disgusting fact that the employers of these elderly folk are exploiting them and that's despicable imo.