Barrier to Entry

I agree. Maybe im a tight ass but i still cringe at the costs of a new ipad, phone and these phone plans

A thousand bux for what lasts a year or two and is used for kids to me is ludicrous

My first car was 1000 . And you can still buy a decent first car for 2k or 3k

I use a high end phone but would never buy an iphone for over 1k!!!! Let alone for someone under the age of 12!
So where is the incentive for a kid to flip burgers all summer for 10 bux per hour??? Theyd obly be able to afford half an ipad!

The most expensice phone i bought was 2 years ago and it was a 550 phone and cringed buying it since i could have got a high end older model for 250 or 300

My phone plan is an unlimited plan for 28 bucks and i cringe at some of the teenagers or young adults who are on 65 dollar plans. And manage to rack up bills of 150 every month and then complain thry are broke

I know times have changed since i was a bit younger but indont give any sympathy to a person who is complaining how tough life is who has 3 kids all with high end ipads and parents with new iphone6s because their previous 12 month old iphone still on contract became not good enough and they needed to upgrade while having a 45k car loan

 

Imo generally our perception of what is expensive is framed by a)our income and b) how much wealth we have accumulated.

Then you have a segment of society who ignore the above and the long term results are as disastrous as they are insidious imo.

'The inability to delay gratification is a primary predictor of economic failure in life.' Brian Tracy.

 

@Leo2413 Totally agree

Had many conversations where someone will pipe up and say.

Why would you spend 200k on a car.
If I had 200k I wouldnt be buying a car with it.

I say. That's because your thinking like a person that doesn't have that type of money to buy things.

For some people a 200k car is like you buying a 10k Mazda.

And you might of even taken a loan out for that mazda and are paying back 25k

Really flips your thinking on its head.

 

We bought a house before having kids so I can't comment on saving for a PPoR deposit while raising kids BUT I can comment on how they stalled our investment journey - and we were on average incomes (80K primary earner plus 35K part time at the time - minus the 3 years of no second income while on maternity leave split over 3 kids). We always 'just' missed out on FTB.

We bought in 2001, sold and upgraded in 2004. CG didn't go anywhere for many years. We had dial up internet when everyone else had ADSL, no Foxtel etc - we lived simply and within our means. Daycare 2 days a week (some years for 2 kids), living and mortgage meant there wasn't any left over for saving for a deposit. If there's no CG - how else can you get one together?

I concur that mindset is important, however, I believe my mindset was present back then - I read a lot and wanted to invest - didn't have the means or the capacity to juggle 3 littlies plus full time work. I 'invested' my eagerness to invest into maintaining the family finances well so as soon as we had enough equity we would be ready to go.

Fast forward a little, I returned to work full time (youngest was 15 months so not an easy feat!) and we began investing what we could into a managed fund, while increasing our lifestyle too - hell, you gotta enjoy your life a little! CG still going nowhere....We now had the servicability but no deposit...

Fast forward some more, the managed fund is big enough to fund a cheap investment property in Logan so we jump. Our incomes are good due to promotions for each of us. CG starts to grow on PPoR so we are ready to go for number 2 - if we can find the time to find one in between working and raising three kids...

Kids certainly slow things down financially. We have made the choice to invest in our kids as well - weekday activities, weekend sport and family holidays (public education though). I read about members on here who did it with kids and I really admire them as I know it's not easy.

 

Those little rascals..how dare they!

 

And you can't even sell them!

 

But you can always direct / inspire them to be a great lawyer like @Terry_w or great developer / builder like @Be Developer .

 

I intend to get a return on them when they are old enough. Age 5, search realestate.com.au for dad and favourite properties that start with the 300 number. Age 8, take phone messages for dad, age 12, cosmetic reno labour, age 15, negotiate on phone for dad, age 18, go around scaring home owners whose houses I need to buy

 

Hear hear.

 

That was a lot of money at that time. I thought she was actually talking about 2015 money as an 80k salary in 2015 would put you as an average earner.

http://www.abs.gov.au/ausstats/[email protected]/mf/6301.0
Full-time adult average earnings in November 2000 were $839 a week= 43.6k a year. Considering it was in 2001 add 3% for inflation and that gives an average wage of 45k.

http://www.abs.gov.au/ausstats/[email protected]/mf/6302.0/
Full-time adult average earnings in May 2015 were $1545 a week= 80k a year.

That’s fairly typical though. Most people tend to believe that they are all middle class regardless of how much money they earn. Low income earners will overestimate themselves while high income earners will underestimate themselves.



https://mattcowgill.wordpress.com/2013/05/13/what-is-the-typical-australians-income-in-2013/

But yes without doubt for most people the barrier to entry is not the serviceability it is saving the deposit, which is why it’s possible to invest in suburbs with positive cash flow.

 

Your right mate.

I suspect though if they (a lot of ppl not all) reeled in the trips, booze, diners out, retail shopping, pricey toys, etc, they would have their deposit. The deposit isn't the problem pe se, the problem is they are not willing to make the sacrifices. Again not all people, but a large proportion.

I use to see it all the time with my colleagues at work. Oh. lets not forget their affair with credit cards.

Just my opinion.

 

Maybe those figures are bit high.... Can't remember exactly, it was a while ago! full time teacher wage and part time teacher wage back then plus times of no second income. I think twice we got a couple of dollars FTB at tax time- so just a bit higher than the cutoffs.

 

@2FAST4U I think you're spot on! I consider myself middle class, not a high income earner. Maybe I scale down our income in my mind... So what is a high income earner these days? I don't think the 150K combined is high.....

 

My wife and I settled 2 weeks before our first child 4 years ago. Joint income was under $50k. Painted the house in the first week and gradually renovated the rest. Deposit was the hardest part but we knew we wanted to buy and did whatever it took. We couldn't afford to buy where we wanted so we settled on an up and coming suburb and bought a rundown house with good bones off a couple mid divorce. Made a healthy profit and bought where we wanted to live.

I know people on over $100k each with no kids that still complain they can't afford to buy. They aren't willing to go without. Any cent they earn they have already spent. Financial education is not an exciting thing to them and they get caught up trying to have the newest of everything, all on finance.

 

A high income earner is defined as: someone who earns more than you.