What would you do to become debt free?

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4liters
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Re: What would you do to become debt free?

Post by 4liters » Wed Jun 13, 2018 6:35 pm

piscateur wrote:Over the last 2 decades, property has been the go, I have done quite well with property, but I'm not about to brag about being clever, it was more that I was lucky with the property boom. My super on the other hand has been nothing short of disappointing.
The current property market is a little nervous and if we are up for a correction, there will be quite a few in trouble. My parents had to go through the "recession we had to have" of the late 80s and early 90s, and interest rates were crazy I believe around 12% or more.
For those saying that property is the way to go, I agree it was, but unsure of the short term future, especially with relations with China at a strain, and China having a slow down, may cause a drop in property prices.
Before shutting down others because you've been lucky with your investments riding the property boom. No one would have foreseen the sustained growth that we have witnessed over the last 20 years.
phil1818 wrote:worked for a number of generations now and always will
Just for some context I haven't checked but believe that the average wage in the 80s was around 20-30K and property prices in suburbs around 20-30kms from CBD $60-70K. the late nineties to early noughties average wage was around 40-50K and 200-250K and Now average wage is $80-90K and property in the same areas are around the million dollar mark. Cant really say that will work "for a number of generations now and always will"

At the end of the day we live in unprecedented times, so who knows what's best.

As for the OP check that your kids wont hate you for the move.
Median wage is a better measure for these purposes, as the average wage figure is inflated by the Gina Reinhardts who earn billions. The median is the mid point of the data, so 50% of workers earn less than the median. The current average wage is $82k or thereabouts while the median wage is only $54k. Australia’s median house price is currently $800k apparently, and keeping in mind this also includes houses in bumfuck nowhere where no one wants to live that is quite a lot for one person to pay off on $54k per year. For what it’s worth Melbourne’s median house price was $900k; 50% of the properties sold here are close to a million or higher. Putting yourself in the position of someone buying, you might only be able to afford a $300k mortgage, which leaves you severely limited when it comes to finding a place that is actually reasonably liveable and a practical distance from work.

The fact that the property market has got to the point where people are forced to commute over an hour each way to work from ‘affordable’ suburbs strikes me as a massive failure of public policy. I’ve come to the conclusion that policy settings like the CGT discount that encourages investment in housing for the capital growth are a terrible idea because if house price growth exceeds wages growth over any period of time we will eventually end up in the situation we’re in now which is hardly ideal unless you are currently sitting on a bunch of investment properties.
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Re: What would you do to become debt free?

Post by smile0784 » Wed Jun 13, 2018 7:02 pm

The problem i had is when the interest rate were going up i couldnt put the rent up fast enough to match it and wage inflamation didnt didnt match ot either

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Re: What would you do to become debt free?

Post by rb85 » Wed Jun 13, 2018 7:09 pm

smile0784 wrote:
rb85 wrote:
smile0784 wrote:
rb85 wrote:Without going down the path of personally talking about anyones individual circumstances it's got me stumped why people are in debt to not only have their primary place of residence but then another investment property or 3 on the side. Being in so much debt must not be good for peoples stress levels etc.

Any decision to relocate is obviously a personal one with many factors to consider but little to no mortgage is always a plus lets face it life is for living as much as you can.
well if you had the chance for some else to pay off your debt would you!!

that's just smart thinking isn't it.
you could say that your helping out those less fortunate that are unable to buy a house so your giving them a chance live somewhere since public housing waiting list is shocking.

whats the alternative
add to the 110,000 homeless people that live on the street.

If your running at a loss your running at a loss going into debt to run at a loss?? For a small tax benefit?
Think over inflated property price and high rents to sustain the investment boom would be more of a contribution to homelessness.
i run at a 2000 loss over the year but get it back at tax time dure to negative gearing the benifite is the property is going up but 20 grand a year in property value so even if i couldnt negative gear tenically im still beter off by 16k a year in gross profit when selling.
Congratualations on where your at truely wish you all the best.
Alternatively to investing in a house in Melbourne if an individual used compounding to grow their wealth without borrowing how would the returns compare?

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Re: What would you do to become debt free?

Post by phil1818 » Wed Jun 13, 2018 7:10 pm

Can’t have population growth and expect everyone can live close to work it’s not possible, move further out where prices are cheaper.. and people’s expectations these days of where they want there first home are off there head, start at the low end and work your way up buy sell buy sell

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Re: What would you do to become debt free?

Post by smile0784 » Wed Jun 13, 2018 7:18 pm

rb85 wrote:
smile0784 wrote:
rb85 wrote:
smile0784 wrote:
rb85 wrote:Without going down the path of personally talking about anyones individual circumstances it's got me stumped why people are in debt to not only have their primary place of residence but then another investment property or 3 on the side. Being in so much debt must not be good for peoples stress levels etc.

Any decision to relocate is obviously a personal one with many factors to consider but little to no mortgage is always a plus lets face it life is for living as much as you can.
well if you had the chance for some else to pay off your debt would you!!

that's just smart thinking isn't it.
you could say that your helping out those less fortunate that are unable to buy a house so your giving them a chance live somewhere since public housing waiting list is shocking.

whats the alternative
add to the 110,000 homeless people that live on the street.

If your running at a loss your running at a loss going into debt to run at a loss?? For a small tax benefit?
Think over inflated property price and high rents to sustain the investment boom would be more of a contribution to homelessness.
i run at a 2000 loss over the year but get it back at tax time dure to negative gearing the benifite is the property is going up but 20 grand a year in property value so even if i couldnt negative gear tenically im still beter off by 16k a year in gross profit when selling.
Congratualations on where your at truely wish you all the best.
Alternatively to investing in a house in Melbourne if an individual used compounding to grow their wealth without borrowing how would the returns compare?
What do you mean?
How to biuld wealth with property with out borrowing money?

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Re: What would you do to become debt free?

Post by smile0784 » Wed Jun 13, 2018 7:22 pm

phil1818 wrote:Can’t have population growth and expect everyone can live close to work it’s not possible, move further out where prices are cheaper.. and people’s expectations these days of where they want there first home are off there head, start at the low end and work your way up buy sell buy sell
Exactly i use to drive 45 to a hour every night to work and sometimes 1.5 hours each way.
First house was in cranbourne (9 years ago) so still had to drive alot lol.
4 houses later selling 2 and we are in a good place that has grown well in a short time

So if the property market has stalled time to move on then



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Re: What would you do to become debt free?

Post by ben475 » Wed Jun 13, 2018 7:25 pm

some interesting points.
you all play the game your own way.

always good to keep an eye your future finances, but I don't stress about it, no one knows how long we'll be here for anyway, you may not need that super after all...

Pro's,
much easier to go out for a quick fish or outdoor activities after work or on weekends, less traffic, more space, bigger house for less means you wont have to earn as much as you say.
in general i'd say its much better for kids in the country, more time outdoors, more space etc. you wont have the choice of private schools, I cant afford that anyway so its a mute point for me.

Cons,
possible negatives could be finding work and leaving friends and family behind may be an issue for you.
its not that hard to visit every now and then but you might not have people you can depend on close by eg, someone to mind your kids for a couple of hours, a mate to drop over and give you a hand in the garage while you have a beer etc.

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Re: What would you do to become debt free?

Post by rb85 » Wed Jun 13, 2018 7:26 pm

phil1818 wrote:Can’t have population growth and expect everyone can live close to work it’s not possible, move further out where prices are cheaper.. and people’s expectations these days of where they want there first home are off there head, start at the low end and work your way up buy sell buy sell
Whats the median house price for Melbourne bumping $900,000 median house price in Pakenham $510000 how often do people need to buy sell buy sell pay stamp duty etc? No your right mate people should dedicate to a life of commuting, working, commuting, working. Where does living and relaxation fit in now that we live in a 24hour economy according to some? It's not called the rat race for nothing.

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Re: What would you do to become debt free?

Post by rb85 » Wed Jun 13, 2018 7:30 pm

smile0784 wrote:
rb85 wrote:
smile0784 wrote:
rb85 wrote:
smile0784 wrote:
well if you had the chance for some else to pay off your debt would you!!

that's just smart thinking isn't it.
you could say that your helping out those less fortunate that are unable to buy a house so your giving them a chance live somewhere since public housing waiting list is shocking.

whats the alternative
add to the 110,000 homeless people that live on the street.

If your running at a loss your running at a loss going into debt to run at a loss?? For a small tax benefit?
Think over inflated property price and high rents to sustain the investment boom would be more of a contribution to homelessness.
i run at a 2000 loss over the year but get it back at tax time dure to negative gearing the benifite is the property is going up but 20 grand a year in property value so even if i couldnt negative gear tenically im still beter off by 16k a year in gross profit when selling.
Congratualations on where your at truely wish you all the best.
Alternatively to investing in a house in Melbourne if an individual used compounding to grow their wealth without borrowing how would the returns compare?
What do you mean?
How to biuld wealth with property with out borrowing money?
The congratulations was genuine wish everyone here all the best.
Investing in not necessarily property but without borrowing money using compounding to grow your wealth investing in good companies some who invest in property but without having to go into debt to do so.

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Re: What would you do to become debt free?

Post by Boonanza » Wed Jun 13, 2018 7:33 pm

smile0784 wrote:
cobby wrote:More to it than that.

Employment. Unless you're highly qualified in specific areas (teaching, social work, natural sciences, justice system, agriculture) there's not a lot of solid meaningful work, and what is is highly contested and the usual retail/sh*t kicker casual roles.
Entertainment for the family. Face it, there's 2/5ths of stuff all outside of fishing and slightly closer proximity to the alpine region. And no matter how much you spin it it's not for everyone's missus or kids.
Services to the house. All well and good having a brand new house build, but not all are connected to sewerage nor have gas. A lot are on fixed wireless internet which isn't all that flash.
Distance. Between lakes and Bairnsdale is 30 minutes, another 25 to Sale. Nothing in between and those 2 are your major towns as far as shopping etc.
Schools. We're not talking the likes of Scotch or other top privates, but even compared to better public schools they're way below that level, and again the potential distance between home and school.
Services like hospital etc. Something serious and you'll be having a chopper flight while knocked out. No ifs or buts about it.
Then there's distance to current family/friends. It's 3 hours to Bairnsdale from the city. Unless you've got extra room or shout them accommodation, visits are likely to be restricted, especially if they're tightarses.

There's more than just the financials to weigh up in such a move
already given some thought to some of those concerns
employment, there are 8 nursing homes and 2 hospitals, i could get work at but with out paying 3500 in mortage i dont mind if do any work just to bring in a basic wage and my wife is happy to change carries if needed.

we are sort of home people and dont really go out much unless its food shopping or for me to fish or to kmart or big w.
'probably a big issue is schools but might more back to town by then,

we looking at getting a 5derom hours so be room for guests

i only really look at financials so thats i put it up here for axtra advice foe things i forget.
I wanted to do the same thing 15 years ago when our kids were very young but the wife was against it. Now she agrees that we should have done it but now it is too late now until our kids have their own lives. If you want to do it then do while your kids are young they will adjust then it's up to the parents. I'm sure you'll make the best decision for your family mate :thumbsup:
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