Category Archives: Young People

Young People will likely never own a home – it’s not their fault either.

Young People will likely never own a home – it’s not their fault either.

Young people are more in touch with their surrounding’s than ever before with their access to social media, instant news and from massive search engines like google it’s no wonder why many are giving up on the Australian dream.

It’s obvious that young people have inherited a stewing lemon and they do not have to look far online to find criticisms of their lifestyles and comments minimizing their concerns. Let’s face it, the older folks in Australia have had an easier ride.

We all agree, the older population in Australia (Majority voters in favor of negative gearing, which inflates demand for rental and sparks costs which are likely to impact young people) worked for their lifestyle. In fact, many did so without finishing high school and ‘got on with the job’.

With all that being said, older folks also benefited from lower barriers to entry into their chosen career, lower house prices. Older folks have a monopoly on the housing market and due to the dichotomy of rental demand and negative gearing for their investment properties.

There is more pressure on young people than ever as most careers require a university degree and industry experience to be considered for these ‘career-launching’ graduate programs. This is the same for trades as young people are required to earn below minimum wage for several years before becoming qualified.

Expectations are simply too high as young people often choosing between their rent and textbooks with their tradesperson counterparts struggling to meet the costs of vehicle expenses and rent.

The facts are laid out, young people will not be able to afford to purchase a house. Wages are being chewed up by inflation, rent and base living costs which makes it near impossible to save for a home. Any concerns brought forward by young people are swiftly cut down with post-truth criticism.

Looking to the people who are steering the country, they are heading towards retirement age and many of them benefit directly and indirectly from the legislation which is being passed. There appears to be little concern for the young people who cannot afford to purchase homes.

Three questions should be asked, respectfully of course:

  1. What is the average age of a parliamentarian?
  2. How many investment properties do they have now, compared to when they first sat in parliament?
  3. What is the current retirement age?

Clearly, not many journalists or voters will be brave enough to ask these questions, but we do know the answer. Now, when I talk to the older generation about career, money and etc and always ask them. “You are very good at telling me what I am doing wrong, could you tell me something that I am good at?”

That question really stops them in their tracks and show’s that there is a lot of misdirected animosity placed towards young people. That being that “all of them are lazy” or “they do not work hard enough”.

Concededly, that may be partly true but surely, in this country which toots its own horn on ‘financial success’ and ‘jobs and growth’ there isn’t an expectation of young people to simultaneously commit to a four-year bachelor’s degree and full-time work, whilst maintaining rent and car expenses and save for a home?

And that’s in the best-case scenario. Most people would struggle with part-time work and full-time study, because if we young people do not meet that golden 70% Credit Average from their degree, they are immediately excluded from graduate programs by HR software.

Yes, this article is personal. It’s personal because young people are trying to get ahead. They are trying to work hard so they can eventually work smarter, but this economy isn’t substantiable for the sole reason that it isn’t working.

The older generation complain about Centrelink payments, whilst happily cashing the rental checks from their investment properties.

The young people’s frugal movement driven by Australian dream

The young people’s frugal movement driven by Australian dream

Young people are upskilling in their personal time like you wouldn’t believe. Ask a young person about online shopping and they could write a sophisticated book on it or anything else that is being sold online.

Less young people are finishing university in pursuit of their own financial ambitions. Many are working to invest, instead of working to save and it may work in their advantage.

In the past five years you will have noticed an increase in the entrepreneurial spirit, it has swept across social media platforms like Instagram and LinkedIn.  You probably know someone who has given it a crack.

More young people now are investing in the stock market or these online based businesses taking advantage of social trends and leveraging their social networks. The barriers to entry for starting an online based business are fairly-low and decent returns on investments can be achieved from investment’s as low as $5000.

Many young people are seeing profitable results in a matter of month’s after investing in online education provided by online provides like Udemy or Brilliant. These platforms provide courses for a nominal fee and can be completed online from your smart phone or computer.

Young people continue to work in their jobs which may not pay the ideal wage, nonetheless the economic activity does ‘pave-the-way’ for reaching that ultimate goal of owning a home.

Young people understand that rent goes into someone else pocket compared to paying off a mortgage or investment property. This money sense wasn’t taught by their parents or in school most of the time but participating online.

It’s a new time in Australia, where young people are able to maintain a reasonable standard of living by investing in second income streams whilst using social media.

Young people now have access to a variety of retailors online which are shipping based, offering hygiene, clothing and other essentials for lower costs as they do not have to pass on the all the costs that traditional retailers have.

There are also apps available on smartphone which allow you to save when you spend. For example, if you make a purchase of $3.80 it will automatically round up $0.20 to be placed into a managed fund allowing you to passively save over time without hassle.

With more options for young people to save or invest for their first home, housing market participants can expect a disruption in the housing market in the next 10 years with more houses being bought with second -income rather than the traditional wage.

The question is, will young people use this income to purchase an investment property and continue to rent or would they rather purchase their first home to build equity and then purchase their investment property.

From my view, I’d rather build the passive income first with an investment property for that flexibility without being committed to a first home mortgage. My goal would be to build a second income which is equal or greater to that of my traditional job, that way I have the security of my employer as well as my side incomes. Giving my more options, convenience and flexibility with that I want to do.

Why home ownership doesn’t need to be out of reach

Why home ownership doesn’t need to be out of reach

For young Australians, housing ownership does not need to be out of reach, this isn’t going to be a condescending article with ‘the hottest regurgitated tips to save’ but will hopefully ignite some self-reflection which is overdue for many people, not just young Australians who are saving for their first home.

Many Australians are experiencing a slowdown in wage growth and as a result of job competition are less likely to negotiate a significant raise. As a result, many Australians spending less wherever they can.

Is this a bad thing? Not for the individual, on a macro-economic scale it might be, although some Australians may be counting on a recession to take advantage of lower house prices. Spending less, may be a good thing. Australian’s are slowly learning to save.

One view may be that Australian’s want to be less reliant on debt to purchase their new home and therefore see no reason to save for the minimum deposit. Perhaps, Australians are going to keep on saving, giving the banks the wake up call they need after the ‘slap on the writ commission’.

Simply, housing doesn’t need to be out of reach as we know that Australian’s are investing in education and building their second income, becoming less reliant on their traditional wages.

The increase in home and land packaged will likely make the possibility of owning new home in the coming years more of a reality. New investors and first home buyers shouldn’t get their expectations up about buying that extravagant first home – it’s out of their budget. New investors and first home buyers need to be realistic in the next coming years.