Australia Cost of Living $200k + Not enough

[Skani]

6 hours ago, ramot said:

Wish we could have afforded a 5 bedder at age 30! As a baby boomer, (not sure how many of us there are on Poms?)  my reality of actually being in that situation is that none of our friends could afford to do that.  We lived a far more frugal life then, ‘I might get my violin out’ did the washing by hand and went to The launderette once a week, remember the excitement of saving up and finally having a washing machine. Saved and bought our first house, mid 1970’s,

 

This baby boomer, at age 30 was working full time (as was my husband) and renting a tiny one bedroom flat in Adelaide.  No car.  No aircon.  We did have a washing machine - one of those infernal twin tubs came with the flat.  I finally bought my first automatic washing machine when I was 38:  before that nowhere I lived had the plumbing for one.  No pub nights or takeaways, no holidays, no gym memberships (I don't even remember them existing then?)   2 concerts in 6 years and a restaurant meal at birthdays only.  We were saving for our first house too - bought when I was 32 and he 35.

None of my baby boomer friends ever managed 5 bedrooms.

[Skani]

9 hours ago, can1983 said:

The 50-60 years old chartered engineers I worked with live in 5 bed detached houses and have done since they were in their 30's...

That's how I measure how hard it is, look at where somebody who does the same job today as you did at their age lives - make the comparison and tell me there isn't a problem. Find even one example of someone who has 'knuckled down' not eating avocado toast for brunch and afforded that 5 bedder at 30 like so many boomers did.

Either you have a very fanciful idea of how most baby boomers lived or the areas where you and I grew up bear no resemblance.  None of my baby boomer friends has ever managed a 5 bedroom house - even now they are in their 60s.  Neither did my chartered engineer father who became the Chief Electrical Engineer of a very large organisation.  We only ever had a standard 3 bedder, 1 bathroom...and 1 car only while we were growing up.  No holiday homes, no investment properties, no overseas holidays. Some baby boomers may have done well due to personal circumstances - a family inheritance can be very helpful, for example - but  it is mistaken  to see the whole cohort as having it easy.  In fact, one of the largest and fastest growing homeless groups are baby boomer women.

Edited October 15, 2018 by Skani

[can1983]

14 hours ago, Skani said:

Either you have a very fanciful idea of how most baby boomers lived or the areas where you and I grew up bear no resemblance.  None of my baby boomer friends has ever managed a 5 bedroom house - even now they are in their 60s.  Neither did my chartered engineer father who became the Chief Electrical Engineer of a very large organisation.  We only ever had a standard 3 bedder, 1 bathroom...and 1 car only while we were growing up.  No holiday homes, no investment properties, no overseas holidays. Some baby boomers may have done well due to personal circumstances - a family inheritance can be very helpful, for example - but  it is mistaken  to see the whole cohort as having it easy.  In fact, one of the largest and fastest growing homeless groups are baby boomer women.

Geez there must be a selection of modest wealth boomers here. Statistically your generation make up 25% of the population but 50% of the wealth in Australia. These are facts. Someone even made a sick countdown clock until the day you will all die, thankfully its been taken down. There's a lot of resentment towards your generation whether its right or not.

https://www.news.com.au/finance/money/wealth/wealth-divide-widens-between-old-and-young-generations/news-story/eadcc3fb337b178af298da6103a88bae

https://mccrindle.com.au/insights/blog/australias-generations-wealth-income/

The quarter who own more than half

In total the Baby Boomers (45 to 64) are a quarter of the population (25%) but own more than half of Australia’s national wealth (53%). Their economic footprint is twice as large as their demographic footprint. While the Gen Y’s have decades of wealth accumulating ahead of them which will grow their net worth footprint, it is unlikely that Australia will ever see the likes of today’s Boomers again where a quarter own more than half. The Boomers have been the beneficiaries of a near 50-year economic miracle, and they are unlikely to ease out of this accumulating any time soon.

 

[Marisawright]

52 minutes ago, can1983 said:

Geez there must be a selection of modest wealth boomers here. Statistically your generation make up 25% of the population but 50% of the wealth in Australia. These are facts.

That is true, but that's because house prices boomed once we were in our thirties and forties, and those who managed to buy a modest house by that time, are now sitting on a goldmine.

The fact is that baby boomers had to scrimp and save in order to own that modest house in the first place.  In our eyes, an awful lot of millenials aren't even trying - they eat out all the time, spend stupid money on clothes, cars, gadgets and  holidays - no wonder they've got no wealth.

[Gbye grey sky]

On 15/10/2018 at 07:59, can1983 said:

Over the weekend this has clearly become a inter generational debate...

I think baby boomers had it the easiest of any generation that has ever lived, baby boomers disagree. the debate will never end..... Its not that I don't respect the generation interest rates were eye watering for you in the 1970s and 1980s plus the strikes limited power/lights per day and my parents used to sit on the floor when they first brought their house until they could afford second hand furniture initially BUT they also had a second home which earned 20k a year for 10 years in the 90/00's- more than my mums salary!! so she gave up work (retired) at 45

The fact remains the house I took 8 years to pay for used to be occupied by dock workers and then by workers in the local factory but for me I had to become a chartered engineer to afford it. The 50-60 years old chartered engineers I worked with live in 5 bed detached houses and have done since they were in their 30's...

That's how I measure how hard it is, look at where somebody who does the same job today as you did at their age lives - make the comparison and tell me there isn't a problem. Find even one example of someone who has 'knuckled down' not eating avocado toast for brunch and afforded that 5 bedder at 30 like so many boomers did.

Where I live is largely 4/5 bedroom homes with 2/3 bathrooms on decent-sized plots often with large sheds, utes, 4x4s, boats, caravans and a myriad of toys.  The latest phones and gadgets.  Almost none are rented.  I am 58, and yes I own one of these homes but have none of the aforementioned add-ons.

Yet almost all of my neighbours are under 40 with kids.  Many are clearly tradies or run their own businesses. Others commute to Brisbane.

I am sure they are up to their eyeballs in debt but they have a lifestyle way beyond what I could afford now, let alone then.

[unzippy]

On 13/10/2018 at 02:02, The Pom Queen said:

 

Is afterpay in the UK?

Not that I know, unless it's arrived in the months I've been gone.

We don't have Lay-by either.  I'd never seen it until I'd first visited Aus.  I half thought it might be to do with space - UK doesn't have the space to store unnecessary stuff.  Even in my lifetime thing have changed from "I'll check out the back" to "If it's not on the shelf we don't have it"

UK was/is all about credit - buying crap you don't need with money that isn't yours.  Lay-by is definitely better in that respect as you can't have it until you have paid for it.

[s713]

You can on afterpay though.

[Skani]

2 hours ago, can1983 said:

 Statistically your generation make up 25% of the population but 50% of the wealth in Australia. T

Of course.  The  price of property has increased enormously since the first baby boomers started purchasing a home ....due to massive immigration and government policies which have encouraged property to be exploited as an investment rather than basic secure shelter.     Save  your resentment for the policy makers who facilitated this....not for the cohort of baby boomers

But those same baby boomers had to scrimp and save to get into those homes in the first place  without  the extravagances now considered essential by so many young people - gap year, overseas holidays, car on leaving school, credit cards,  gigs, concerts, bars, restaurants,  entertainment and media gadgets and packages,  designer clothing and accessories, brand new furniture, brand new cars etc.     And without current day benefits  such as Medicare rebates  (before Medicare you either had full private health insurance or paid the full cost of medical treatment),  child care assistance,  leave loadings - even equal pay for women.  When I started working in the Commonwealth public service my salary  as a female was 80% of a male doing an identical job.

Moreover, baby boomers are now aged mid 50s - 72.  They've been working and accumulating assets for 35 - 50+ years.  Of course they'll be a lot wealthier than someone just starting out on a career path.

 

Edited October 16, 2018 by Skani

[Gbye grey sky]

25 minutes ago, Skani said:

Of course.  The  price of property has increased enormously since the first baby boomers started purchasing a home ....due to massive immigration and government policies which have encouraged property to be exploited as an investment rather than basic secure shelter.     Save  your resentment for the policy makers who facilitated this....not for the cohort of baby boomers

But those same baby boomers had to scrimp and save to get into those homes in the first place  without  the extravagances now considered essential by so many young people - gap year, overseas holidays, car on leaving school, credit cards,  gigs, concerts, bars, restaurants,  entertainment and media gadgets and packages,  designer clothing and accessories, brand new furniture, brand new cars etc.     And without current day benefits  such as Medicare rebates  (before Medicare you either had full private health insurance or paid the full cost of medical treatment),  child care assistance,  leave loadings - even equal pay for women.  When I started working in the Commonwealth public service my salary  as a female was 80% of a male doing an identical job.

Moreover, baby boomers are now aged mid 50s - 72.  They've been working and accumulating assets for 35 - 50+ years.  Of course they'll be a lot wealthier than someone just starting out on a career path.

 

Good points.  When I stop to think about it 25 years ago when I was 33 my net worth was less than zero.  I bought my first flat (with my first wife) in 1989 and it was still worth less than the original 95% endowment mortgage taken out to buy it due to a falling house market then and negative equity.  We had a loan on our only 2nd hand car and struggled to pay off the credit card month by month.  We had no children.

Now I have over $1,000,000 in assets which sounds a lot but most of it is tied up in the house, and no debt.  I have always lived very frugally in most respects and still do.  If I had bought designer clothes, dined out regularly, drank excessively, acquired and discarded tech, gadgets, furnishings, or smoked then I certainly would not be in the position I am now in.

We have always had choices to make and I don’t care how others prioritise their choices.....but it irritates me when people make certain choices which impoverish them now or in later life and then moan because of it.

[unzippy]

1 hour ago, s713 said:

You can on afterpay though.

I know. 

But I was talking about Lay-by.

[Johndoe]

On 12/10/2018 at 17:28, starlight7 said:

I used to like the lay-by system.  Especially at Christmas because it was a good way to hide all the kids' presents and you could go and collect them just before Christmas . How come they stopped doing it?

Because the queues were that long on Xmas Eve that some didn't get their pick up till Boxing Day

[Johndoe]

12 hours ago, Skani said:

Of course.  The  price of property has increased enormously since the first baby boomers started purchasing a home ....due to massive immigration and government policies which have encouraged property to be exploited as an investment rather than basic secure shelter.     Save  your resentment for the policy makers who facilitated this....not for the cohort of baby boomers

But those same baby boomers had to scrimp and save to get into those homes in the first place  without  the extravagances now considered essential by so many young people - gap year, overseas holidays, car on leaving school, credit cards,  gigs, concerts, bars, restaurants,  entertainment and media gadgets and packages,  designer clothing and accessories, brand new furniture, brand new cars etc.     And without current day benefits  such as Medicare rebates  (before Medicare you either had full private health insurance or paid the full cost of medical treatment),  child care assistance,  leave loadings - even equal pay for women.  When I started working in the Commonwealth public service my salary  as a female was 80% of a male doing an identical job.

Moreover, baby boomers are now aged mid 50s - 72.  They've been working and accumulating assets for 35 - 50+ years.  Of course they'll be a lot wealthier than someone just starting out on a career path.

 

Simple innit? It doesn't surprise me that those who can't. or more likely refuse to see the reason for the wealth of baby boomers are invariably the ones that resent the fact that they ain't got it and infer how hard it is for them and how easy it is/was for us. Most of that wealth is tied up in the family home or superann and isn't cash wealth. Many only just survive on their superann/pension and the family home can hardly be considered as "cashable"

[Skani]

13 hours ago, Johndoe said:

. Most of that wealth is tied up in the family home or superann and isn't cash wealth. Many only just survive on their superann/pension and the family home can hardly be considered as "cashable"

Exactly so.  Our mortgage was eventually paid off around the time I turned 60 - not exactly the lightning fast mortgage we all supposedly enjoyed - and I am really grateful that I have a secure home without financial worry.  But my pension supplemented superannuation is very modest and there's no way I can indulge in all the luxuries and globe trotting  we retired baby boomers are supposed to benefit from.   And neither do I live in a vast family home which we are all supposed to "downsize"  from and free up for others.  Downsizing for me would mean a caravan .    They'll all have to wait until I'm downsized into a nursing home room  - or a box.  

[can1983]

clearly there's nobody under 50 on this forum (or at least this thread!)

Let's just all agree the baby boomers were the most oppressed group of individuals ever they are all poor and spend their weekends eating cold beans and fixing old cars so they can get to work the next week

[NicF]

29 minutes ago, can1983 said:

clearly there's nobody under 50 on this forum (or at least this thread!)

Let's just all agree the baby boomers were the most oppressed group of individuals ever they are all poor and spend their weekends eating cold beans and fixing old cars so they can get to work the next week

Actually this isn't far off the mark.  My parents are baby boomers.  When I was little, and they were in their late 20s/early 30s they were both working and had pretty much no money.  As nurses they were able to get help from the government to buy a house, which was the only way they could afford to buy.  We didn't have much in the early years - mum grew veggies and I have memories of eating meals of bones (literally cooked bones and we would eat the little bit of meat that was left on them with some bread and butter).  My parents stayed in the house and as the years went by their earnings grew and the mortgage stayed about the same so they had more disposable income, which they mostly saved.  More years go by and they were earning even more and still fairly frugal in their spending and they were in a position to buy another house and rent it out to my aunt.  More years go by and my dad was able to buy another house and let my brother live on the top floor and used the bottom floor as an office.

So now my parents are in that baby boomer category where they have a large amount of wealth.  But they haven't always been that way and they got there by scrimping, saving and going without in the early years and continuing to be careful with money once they had some.  If young people now went without in the same way my parents did they would be able to accumulate wealth in the same way.  And they could certainly live off a hell of a lot less than $112k a year.

[welljock]

47 minutes ago, can1983 said:

clearly there's nobody under 50 on this forum (or at least this thread!)

Let's just all agree the baby boomers were the most oppressed group of individuals ever they are all poor and spend their weekends eating cold beans and fixing old cars so they can get to work the next week

 

On 16/10/2018 at 05:57, can1983 said:

Geez there must be a selection of modest wealth boomers here. Statistically your generation make up 25% of the population but 50% of the wealth in Australia. These are facts. Someone even made a sick countdown clock until the day you will all die, thankfully its been taken down. There's a lot of resentment towards your generation whether its right or not.

https://www.news.com.au/finance/money/wealth/wealth-divide-widens-between-old-and-young-generations/news-story/eadcc3fb337b178af298da6103a88bae

https://mccrindle.com.au/insights/blog/australias-generations-wealth-income/

The quarter who own more than half

In total the Baby Boomers (45 to 64) are a quarter of the population (25%) but own more than half of Australia’s national wealth (53%). Their economic footprint is twice as large as their demographic footprint. While the Gen Y’s have decades of wealth accumulating ahead of them which will grow their net worth footprint, it is unlikely that Australia will ever see the likes of today’s Boomers again where a quarter own more than half. The Boomers have been the beneficiaries of a near 50-year economic miracle, and they are unlikely to ease out of this accumulating any time soon.

 

Has it not been the same for every generation; that when the GenX and any other label reaches the age that the Baby boomers are currently at, they too will be the 25% than own more than half

[Gbye grey sky]

7 minutes ago, welljock said:

 

Has it not been the same for every generation; that when the GenX and any other label reaches the age that the Baby boomers are currently at, they too will be the 25% than own more than half

Especially as, by that time, many will have inherited the assets of their ‘baby boomer’ parents.

[can1983]

6 minutes ago, Gbye grey sky said:

Especially as, by that time, many will have inherited the assets of their ‘baby boomer’ parents.

Yes that probably will be true, except that every baby boomer on this forum appears to buck the trend

But what is the use of living in a big house when your children have all grown up....

My parents own 7 bedrooms over two properties and only use one at a time. Its all a big waste

[Gbye grey sky]

7 minutes ago, can1983 said:

Yes that probably will be true, except that every baby boomer on this forum appears to buck the trend

But what is the use of living in a big house when your children have all grown up....

My parents own 7 bedrooms over two properties and only use one at a time. Its all a big waste

Really.  Helps if you read what people actually post than just take away your own preconceptions.  As I and others have said we have all accumulated assets by our 50s and 60s but had nothing in our 30s.

I only own one home that the family lives in.  When my daughter moves out some day we will almost certainly downsize as many do.  However some older people become very attached to the home in which they brought their family up and so stay put.  Each to their own.

[can1983]

29 minutes ago, welljock said:

 

Has it not been the same for every generation; that when the GenX and any other label reaches the age that the Baby boomers are currently at, they too will be the 25% than own more than half

not sure most people I know (of course that's not the whole of society) every generation has had more than the previous until gen x. I'm gen X (just about, nearly Y). I can categorically state that I will only reach the wealth of my parents when they die and of course that's something id rather not happen! In all eventuality they might spend it all by then and if they do that's fine its not mine!

[ramot]

12 minutes ago, can1983 said:

Yes that probably will be true, except that every baby boomer on this forum appears to buck the trend

But what is the use of living in a big house when your children have all grown up....

My parents own 7 bedrooms over two properties and only use one at a time. Its all a big waste

No we haven’t bucked the trend we are very comfortable and own investment properties, but the point is that it didn’t come easy, nothing was handed to us on a plate, no inheritance came our way. We took chances that many wouldn’t have taken and it went our way luckily.

[can1983]

2 minutes ago, ramot said:

No we haven’t bucked the trend we are very comfortable and own investment properties, but the point is that it didn’t come easy, nothing was handed to us on a plate, no inheritance came our way. We took chances that many wouldn’t have taken and it went our way luckily.

You really believe the same chances will exist in the future? that my young children now will, in 20 years time, get the chance to make a comfortable life from capital gain in housing? Can't see it happening. Tragedy

[Gbye grey sky]

12 minutes ago, can1983 said:

not sure most people I know (of course that's not the whole of society) every generation has had more than the previous until gen x. I'm gen X (just about, nearly Y). I can categorically state that I will only reach the wealth of my parents when they die and of course that's something id rather not happen! In all eventuality they might spend it all by then and if they do that's fine its not mine!

But the point being made is that is only fair to compare your likely wealth when you reach the age your parents are now if you also compare the lifestyle you have now with the one they had when they were your age.

Many baby boomers got caught up in the easy credit, easy spend lifestyle and have very little.  Many I know of my age or in their 60s still have mortgages and expect to work on well into their 70s if they are capable as they cannot afford to retire.  In many instances this was down to life choices that they made and most accept that when I talk with them.

[Marisawright]

1 hour ago, can1983 said:

clearly there's nobody under 50 on this forum (or at least this thread!)

Let's just all agree the baby boomers were the most oppressed group of individuals ever they are all poor and spend their weekends eating cold beans and fixing old cars so they can get to work the next week

Are you saying people under 50 would know the truth whereas the ACTUAL baby boomers are all lying?  Give me a break.

As GreySky says, Millenials are making life choices now which mean they'll have far less in assets in their thirties and forties than the average baby boomer  - and that has NOTHING to do with house prices and everything to do with spending money on gadgets, cars, meals out, etc. 

We don't know if there will ever be a housing boom again, but because Millenials don't have that attitude, they won't be in a position to capitalise on it, even if it does happen. 

Besides, how does a future housing boom have anything to do with the baby boomers?

Edited October 17, 2018 by Marisawright

[Skani]

24 minutes ago, can1983 said:

You really believe the same chances will exist in the future? that my young children now will, in 20 years time, get the chance to make a comfortable life from capital gain in housing? Can't see it happening. Tragedy

You think that's a tragedy?  A tragedy would be if they were homeless...not being unable to make a capital gain out of housing.   A comfortable life comes from income, not from living in a capital gain.    What you should be worried about for your children is whether ecosystems will still be sustainable enough to support  the lives of x billion humans.