TheFerret Posted March 12, 2009 Share Posted March 12, 2009 So my parents were able to afford (easily) a house on one income, yet todays generation are expected to struggle to pay off the SAME house using two incomes. Yeah that sounds like a great investment and completely sustainable. That all comes back to Fractional Reserve Banking, one day perhaps we will see a drop of the working age down to 10 years old - that will keep the banks happy, more suckers for credit. Link to comment Share on other sites More sharing options...
jasonjeroo Posted March 12, 2009 Share Posted March 12, 2009 They can also increase the loan period to 100 years so people can borrow even more Link to comment Share on other sites More sharing options...
TheFerret Posted March 12, 2009 Share Posted March 12, 2009 Maybe 2 wives will become legal (ouch!), that way we can have a triple income households and watch houses go up another 150% in 10 years. Link to comment Share on other sites More sharing options...
mminion Posted March 12, 2009 Share Posted March 12, 2009 TheFerret, Don't laugh, Tri Incomes households are coming (children can't afford to buy themselves and hence living with the parents longer). Tri/Quad income households are common in Asia. Anyhow while a little off topic you'll laugh at this... http://cache.gawker.com/assets/images/gizmodo/2009/03/pallet_x_10000.jpg While you will never see a trillion dollars in person (nature's way of protecting your sanity amidst the bailout), computers can do the job without breaking a sweatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ÂÂor worrying about retirement. Measurements were taken of a $US10,000 stack of $US100 bills and pretty much multiplied from there using simple geometry. In that trillion dollar shot, each pallet holds $US100 million...and the pallets are double stacked. As for that red blob on the left? It's a human. Cheers Matt Link to comment Share on other sites More sharing options...
TheFerret Posted March 12, 2009 Share Posted March 12, 2009 Matt, I know, amazing, I saw the one where they scale up to a trillion from a million, it's all a bit too insane for me. Link to comment Share on other sites More sharing options...
Duster Posted March 12, 2009 Share Posted March 12, 2009 Jason, I didn't say I would be "happy" to see it go down 30%. I said it wouldn't worry me - a big difference. Have a chat to some "real" business people and entrepreneurs. Most have lost "everything", some many times over. It's a great learning curve. Regarding the 10x earnings: My father, who is well in his 80's, still has his first pay slip (believe it or not) We went through the exercise many years ago to solve an argument, and guess what ? His first house cost almost exactly 10x his earnings at the time. The point is, in those days there were No credit cards. No overseas trips. No exotic electrical goods. No 1st car GIVEN to them. They had a much simpler life and worked bloody hard, and yes, all on ONE wage. Your brother must have been on extremely good wages @ 3x earnings, or bought in a real hole ! Ask your father if he was glad he purchased his house when he did. Just like you will be telling your kids down the track "I can remember when you could buy a house for $500k" Even if it is not a great investment, it is forced saving and you will be able to bring your family up in a secure environment and that's an investment in its own. I would probably buy houses @ 5% if they were 20% cheaper. I think this scenario is likely to occur in the near future. It already has, so you better start buying Cheers. Link to comment Share on other sites More sharing options...
dfonze Posted March 12, 2009 Share Posted March 12, 2009 so are we saying in 38 years time the average house will cost $5,000 000 and the average wage will be $550,000 ? Link to comment Share on other sites More sharing options...
jasonjeroo Posted March 12, 2009 Share Posted March 12, 2009 A 30% drop wouldn't worry you? I guess the recent fall in shares wouldn't be worrying you too because you haven't sold yet right? I have chatted to 'real' business people and entrepreneurs. I prefer to learn from their mistakes and not repeat them. I don't know any of them who recommend buying at the top of the cycle. What was your fathers job and how old was he when he first bought? My mum bought the land our house is on by working part time at the local supermarket for 3 years. Now you couldn't buy the land for 8-10X average earnings. My brother has owned three properties in his life. All bought 3-4X his earnings (cook, chief). His last one overlooks water. What has changed is that he was required to have between 20-30% deposit in all cases. When the banks lowered this requirement, people borrowed more and paid more. Now the GFC is here, banks will/are starting to tighten their lending criteria again which will restrict how much people can pay for property. Houses haven't fallen 20% yet but I believe they will. How can "not a great investment" be a secure environment to bring up a family in? I prefer to bring a family up in an environment that is financially secure. Not one controlled by the size of my mortgage. Link to comment Share on other sites More sharing options...
Duster Posted March 12, 2009 Share Posted March 12, 2009 Are you advising your parents and brother to sell ? Or are they bad investors too ? Link to comment Share on other sites More sharing options...
jasonjeroo Posted March 12, 2009 Share Posted March 12, 2009 What's the current yield on your housing "investments? Link to comment Share on other sites More sharing options...
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