Who lived through the last Aussie recession?

Im not suggesting that recession is imminent however it is inevitable at some point in the future that we will experience a recession.

So im interested in the experience of those that experienced the last recesion and what actions you took to minimize the impacts of holding a large portfolio.

 

Which one there has been several under Labor,the jury at the time give you a large square peg and asks you as a investors on opm to chose between 2 round holes..

 

Important thing is to watch your cashflow.

So keep a cash buffer, hang on to your job, make sure repayments are manageable etc.

 

I took no action, other than to continue to pay down the PPoR debt; but I would have done that anyway.

We had no IP's at that stage, and bugger-all fin education other than I knew to smash the home loan.

Further to that now that I have a bit more of a clue; I suggest those who have a few IP's; get your ducks in a row and set up a 100% Offset account linked to the IP's (the MB's here on this site can help you) and put as much cash into that as you can spare.

 

When was the last one?

 

Fairfax newspapers have it as 1990.

 

I believe it may have been around 1990

 

the recession we had to have

 

1974 was the first for me.

 

i remember the recession well.

dad went hunting to shoot rabbits and roos for dinner.

shoes had to last so we played barefoot.

second hand bikes cobbled together from the good bits at the tip.

well - that was my childhood anyway. we weren't even middle class at that point.

 

OK OK so now you know my age....Interest rates went up to 18% from 14% and neighbours were selling up to get out of debt.. or refinance, every third month. Our bank was nice to us.. they extended our mortgage by years and years and years My suggestions are
1. Have a cash buffer. (As mentioned )2 Buy good clothes and get them mended.( or do it yourself) 3. You can still have fun without expensive anythings! 4.We didn't have overseas holidays. 5.Credit cards were for paying off in full at the end of the month.
I hope this helps!

 

Sign of the times, more negative threads, bloody APRA

 

A sign of the times or a sign of things to come?

 

It was like that for us too. We were poor and then we got really poor. My dad using rabbit traps, my grandfather turning up with day old bread he got from a mate for us, mum crying because there wasn't anything for us to eat.

They kept the house but only because the banks didn't have the balls to repossess our entire country town. Many farmers faced losing the farms but then there was no one to buy them back in 1990 so people just prayed for rain and good crops.

Not sure it would go the same way today. The farm would be a distressed asset sold off to a hedge fund.

 

I think I would just go overseas to work.

 

Globalisation is not going to be your friend, if that's your plan to get away from a recession.

 

I was too young to remember it but I think my family were fine because both my parents had secure jobs back then.

 

I was in my 20's during that one - only significant asset was a PPOR with approx $140,000 loan & interest rates topping 18% ( I recall that some bank customers had a ceiling rate of 14.5% if loan taken out before a particular date). I had a very secure job and a reasonable income but still, to this day, I hate the taste of 2 minute noodles

Fast forward 25 years.......jeeeezzzzzzzzzzzzzzz!

No PPOR loan but one on an investment property, fortunately fixed at 4.99% for the remaining term of just over 4 years.

Average income but very little job security now.

Noodles not on the horizon though

Strategy is to pay investment property loan down slowly, buy more quality shares and put a bit into super.

Will consider another IP maybe way down the track but strategy now is reduce debt slowly and build up shares at same pace.

Jeez.....25 years!!!!!!!!!!!

 

Go Libs. Wages explosion which resulted in double digit unemployment, 12.5% inflation and 18% interest rates. The economy was far too hot. Without the recession, which was the price (hence we had to have) for bad economic policy and peoples proflegacy, who knows what would have happened. But we do know that as a result of the cooling economy, std varaible interest rates were back down to 8% in early 97.

 

I was only 8 when the 1990 recession hit. My family did ok. Weirdly, it just so happened that the family business was in a sector that was - at the time - thriving!!!

You would all laugh if I told you this but... the family business was... a video store!
Think about it... pre-Internet, pre-cable TV, pre-movies being able to be purchased from shops at all for sometimes up to two years post-cinema-release!

VHS piracy was difficult to execute and actually quite costly, so it only occurred in mild doses.

Couple this with a recession-gripped target market and the budgeting cost for a family of spending $3 on an overnight new release video hire, versus actually going to the movies or a family holiday etc., and it was a thriving business during an otherwise awful time financially.

Of course our family were broke by the mid 90's as easily-pirateable dvd launched, Internet and cable TV took on, as globalised players such as Blockbuster Video took hold.

By the late 90's the video store industry was obviously floundering (other factors such as a dvd release of a cinema movie being available at big w for less than $20, only 3 months after cinema release, also took hold), and death was imminent. Any business brave enough to operate post-2001 was either lying to themselves or selling drugs under the counter or something.