Re: The totally off-topic thread
The older generation also didn't have many of the costs that younger people have today. It's all good and well to say 'go without your phone' but most people can't. Work expects you to have a phone but they aren't going to pay you for it.
When it comes to the wine and the travel you knew what? I think, no way in hell can I afford a house any time soon, so I might as well enjoy my life. You've only got one, and I refuse to spend it living like a miser surviving on basics just to have a place to live. I'm lucky to have a roof over my head, it's just unfortunate I don't own it.
As for living in an affordable suburb....did the boomers have to live 2 hours drive from work? Because if we moved to a suburb we could actually afford, I'd be spending up to four hours a day commuting. And what kind of life is that.
I've mentioned this before about mobile phones but one more time.
1) As a funds manager, when Optus was looking to set-up, I sat through an "Orwellian" presentation. At that time the average Australian made phone calls lasting in total around 40 minutes a month (even though local calls were free).
Over two and a half hours I was shown how (collusion not possible) the Australian population were going to be 'controlled' and made to re-adjust their values. The 'boast' (now reality) made was that once they were finished that the average Australian would rather pay their mobile phone and pay TV bill before their:
- mortgage
- health insurance
- credit card
- school fees
within five years. And sure enough, although it might have been six - the annual survey (ACOSS does it I think) showed exactly that.
Australians would be made into addicts with all the related 'side effects'. Anxiety, loss of self-worth etc - were all intended outcomes for the grand plan. The cable network was to form the backbone for the future mobile phone network, although as far as the Govt believed it was for fixed line and internet primarily.
Subsequently, various research has shown (on a global not just Australian scale) that in general people's organisational/planning ability has more than halved, short term memory retention as well as concentration span has decreased. For extreme 'addicts' the thought of separation from their phones does cause anxiety attacks etc.
People did survive without them for decades/centuries. If you must have one for work - does it have to be a smart phone? Being forced to attend to emails outside of business hours (for most occupations) is a WHS issue.
How much you pay on a phone plan/month for most part depends on the data component. Work emails generally are not data intensive - videos/photos are.
2) It may come as a surprise, but in Sydney people drove 2 hours (or more) each way in the 1980s so they could afford to buy a house such as Penrith (before the motorway/toll way), Blacktown or Campbelltown etc. A house in Penrith had 3x the land size and was no more than 40% the cost of Kingsford (for example). I know - I looked around everywhere to see where I could buy.
It was pretty common in the 80s and 90s for children to live/buy/rent more than an hour's drive from their parents. Today the refrain I hear the most is "My children need to be able to buy a house near me."
As the major capital cities have close to doubled their populations since then, and land is not being 'made' the proportion of houses close to the coast must be a much smaller fraction of the total. Yet many decry the expense of housing there. Go back to the 80s and think of the equivalents to Vaucluse, Rose Bay, Double Bay, Milsons Point, Cremorne, Manly etc. Now move the ruler back an equivalent distance from the coast (or from the center of the CBD) and you have a similar relative price halo.
3) Mortgage rates got as high as 17% for some in the late 80s early 90s. So a $200,000 mortgage thencost more to service than an $800,000 mortgage does today. A $300,000 mortgage cost more than a $1,200,000 one does today. There was also Bank Debits tax on most transactions for your bank/building society/credit union accounts as well as Financial Institutions Duty to pay.
If someone sacrificed their pay-TV (say mid range $99/month), had a non-smart mobile on a low data plan sufficient for emails but only 10-15 minutes of video vs smartphone data rich plan that would also save around $100 a month. Perhaps they had a 26" inch LCD TV instead of a 50" soon to be 65" TV - that's an extra say $2,500 one-off payment on the mortgage that saves $4,000 in interest on the 30 yr mortgage and sees a monthly power bill saving of $15 (part due to the lower heat output requiring air conditioning to offset) not to mention the larger TV cabinet/table.
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Some people chose to face the over 4 hour commutes, keep their parent's hand-me-down TV, keep their car for 21 years, avoid mobile phones and pay TV so they could afford to buy a house.
Others chose to rent and spend instead.
It is everyone's choice to make.
A chilling financial example, starting salary in merchant banks in mid 80s was around $20,000 which meant paying 46% tax on some of it. Top marginal tax rate was 60% (memory failed me I thought it was 65%). Buying lunch each day in the city cost around $5 for a sandwich/roll, $6-8 for hot takeaway (aka plastic container lunch). So 5 x a week / 50 weeks a year = $1,250 a year after tax or over 10% of pre-tax salary. A typical car cost 4 months median pre-tax annual salary, today it is around 2 months. After tax it was 7 months or so in then mid 80s, today it is under 3.
The apparent difference though was that generally people did not expect or treat it as their right to have it all - they realised they had to earn it. There were enough people alive who had lived through the Great Depression who could pour cold water on anyone who started to complain about "how tough it is to..".
The other reason, perhaps, is that Australia's self-reliance has been lost due to the fact that there has not been a country-wide recession since the 1990-93 experience. Anyone born since say 1982 does not know how nasty/tough the real world can really be like. Certain groups like farmers and resources have experienced rolling recessions (more the farmers than resources until the last two years).
In the late 1990s one mid-tier bank decided to randomly survey their mortgage book. Really contact close to 1,200 home loan accounts to get a 'complete picture'. They spent close to six months doing this, asking for updated pay slips etc, credit card out standings etc. They offered a 0.25% discount for a year as a reward for effectively going through a much more detailed scrutiny than when they took out their home loan originally.
The result - if mortgage interest rates rose more than 2% then their loan book was predicted to face a 13 fold increase in bankruptcies/foreclosures. It would wipe out more than half their capital if the interest rate rise lasted 2 years or more. How do I know? They shifted their company super into a lower risk structure that I won the mandate to manage, and as always I asked the directors why they were doing it.
. I remember my father working for the Vic Public Service earned about $12,000.
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