So what will a depression do to you. [Archive] - Australian Land Rover Owners

p38arover

10th October 2008, 06:49 AM

At the moment, I'm not sure. I was about to retire - effectively at the end of the year (going on long service leave from Feb through to 30th June 2009). Elisabeth retired about a month ago.

Our combined superannuation has plummeted by over $100,000 over the past year - and I haven't checked the last week or so. :( Having said that, it is (was) still 50% higher than it was when I took redundancy from Telstra in 2002 but not as high as I'd have wanted to retire.

I'll need to talk to the financial planner.

I may stay working - whilst I have a job. 'Tis easier to retain a govt. job than to find a new one. I wish I could work here part-time. I've been offered a part-time job working for a local automotive LPG supplier.

At least we don't have a mortgage.

JDNSW

10th October 2008, 07:12 AM

As effectively a self funded retiree, I will find my income (already below the poverty line) dropping dramatically. The only bright spot seems to be that the drought may be ending, and I may be able to get some stock on agistment, which may at least pay the rates, and might even pay for the costs of improving fencing.

John

Phoenix

10th October 2008, 07:25 AM

already taken it's toll on me. the architecture firm that I work for has cut me back to 2 days a week form full time :(

dobbo

10th October 2008, 07:27 AM

I'll adapt to meet any situation as it arises, I very much doubt I will have to send the missus out on the game and the kids to shoe shining lessons. I will be ok.

Captain_Rightfoot

10th October 2008, 07:34 AM

Firstly, my thoughts go out to all my LR friends and everyone that is going to have a tough time. I heard someone saying the children of 2010 will grow up with the same outlook on life as the children of 1930.

I'm still to young to retire. If we both keep our jobs we should be ok. They are both fairly secure. We own our house. To be honest it should make it easier for us to get another house by the sea if we want.

Originally I wanted the house prices to crash as I thought they were a societal cancer (and personal debt). Now that I'm watching it happen I realise it's so much bigger and there is going to be great pain. Still, it was unavoidable. We have to have the cancer out.

Psimpson7

10th October 2008, 07:42 AM

Originally I wanted the house prices to crash as I thought they were a societal cancer (and personal debt). Now that I'm watching it happen I realise it's so much bigger and there is going to be great pain. Still, it was unavoidable. We have to have the cancer out.

You wanted house prices to crash.....? so what, most of the population have huge negative equity.....? people will then default on their payments so they dont end up paying huge mortgages on houses that are worth only 50% of what they were.......

Captain_Rightfoot

10th October 2008, 07:52 AM

You wanted house prices to crash.....? so what, most of the population have huge negative equity.....? people will then default on their payments so they dont end up paying huge mortgages on houses that are worth only 50% of what they were.......

No, so my children had a chance of buying a house for themselves one day :eek: It has been obvious this has been coming for some time (well to me anyway). Read this article (http://www.jenman.com.au/news_article.php?id=244). Houses always end up being affordable again.

EDIT: This explosion of debt has meant we have been borrowing and spending today, and taking from tomorrow. So, it was clear that times were going to get tougher.

spudboy

10th October 2008, 07:56 AM

If times get ridiculously tough, like depression tough, then I am planning to live off of our 40 acres and grow our own fruit, meat, etc.

We've got enough water for household use plus a bit more for growing limited stuff.

After watching that ABC 7:30 report 2 nights ago it looks like the world could be in for a rough time :(

Psimpson7

10th October 2008, 08:14 AM

No, so my children had a chance of buying a house for themselves one day :eek:

Well thats ok then..... Can't your children get a job, save up a deposit and buy a house like everyone else has had too?

A major price drop, bankruptcies, people losing their homes etc seems like a small price to pay so your children can get a cheaper house....

I am fully aware of the fluctuations in the house market, and if it does drop, it will go up again, but saying you want it to happen is probably not a particually sensible comment.

Shonky

10th October 2008, 08:24 AM

Same here spuddy.

We are animals. We need shelter from the elements, nutrition, hydration and love. Everything else is sundry and not nearly as neccesary as we have grown to believe.

;)

waynep

10th October 2008, 08:29 AM

I was planning to retire ( or at least stop full time work ) in a couple of years, but now the numbers are not adding up, so may need to review that.

Last year I dug up our lawn and planted fruit trees, started growing veges, put water tanks in the backyard, just as a hobby. That may turn out to be a wise move, although a bit of a "Good Life" fantasy. If cost of veges and fruit go beyond affordability that creates health issues, and your health is more important than your finances. How many suburban backyards these days have ( or have room for ) a vege patch ? Forget the "al fresco" dining area and pool and put in a water tank and vege patch, I say.

We are just as happy bush camping , with only the cost of fuel to get there, as going on overseas holidays.

I think most people with that type of attitude will come out OK.

I suspect those that must have their McMansions, four star holidays, new cars every two years, the latest and greatest plasma TVs and appliances, and have their kids go to the best private schools, will be the ones getting a bit of a shock. It seems these obsessions are more driven by social or family or peer pressure ( "keeping up with the Joneses" mentality) than actual need.

That's my socialist rant for the day. ;):angel:

Captain_Rightfoot

10th October 2008, 08:29 AM

I am fully aware of the fluctuations in the house market, and if it does drop, it will go up again, but saying you want it to happen is probably not a particually sensible comment.

It's not just my children (they are only 2 and 5)... it's everyone's children. I didn't want it to be a case of a whole generation not being able to achieve the aussie dream. I remember telling work colleagues this was un-sustainable in 2004. :o

I am genuinely sorry for any offence.

strangy

10th October 2008, 08:36 AM

We will likely weather it, my family is in a better position than the last recession (we had to have).

Sadly people will still get sick and have accidents so my work will likely remain stable enough and dear wife is in Govt dept. Fairly sure we will hold onto the basics. Ive stopped paying additional into my super and sent that money into the mortgage.

People still need shelter and we have never charged top dollar for rent, so even if this drops we hope to still hold onto our investment property.

Cautiously optimistic for my family, very concerned for some relatives and friends.

:mellow:

Scallops

10th October 2008, 08:47 AM

It's not just my children (they are only 2 and 5)... it's everyone's children. I didn't want it to be a case of a whole generation not being able to achieve the aussie dream. I remember telling work colleagues this was un-sustainable in 2004. :o

I am genuinely sorry for any offence.

With the greatest respect to all concerned - I don't really think you have anything to apologise for Captain. Your comments regarding the entire economic situation in this and other threads are , in my opinion, pretty close to the money.

The situation we now face where property values are going to (and indeed are now) fall causes emotive responses, and quite understandably, as many people have always followed the old addage of "safe as houses" etc. But one difference with property investment is that pricing must ultimately be affordable - otherwise very few investors can participate. This is where we are now - property is over priced - as in it is not affordable to the majority. And we all want our kids and loved ones to be in a position to prosper in the future. :)

longreach

10th October 2008, 08:48 AM

:angel:Well I hope to retire next year,but that's not going to happen now,my supa has plummeted,from what it was a year ago,so looks like I,ll be working for a few years to come....no good whinging about it,just have get on with it.......hope I don't have to sell my defender,as long as there is work I,ll be all right:(

waynep

10th October 2008, 08:51 AM

Utemad

10th October 2008, 08:58 AM

It's not just my children (they are only 2 and 5)... it's everyone's children. I didn't want it to be a case of a whole generation not being able to achieve the aussie dream. I remember telling work colleagues this was un-sustainable in 2004. :o

I am genuinely sorry for any offence.

I'm with you Captain. I don't understand why people look at their houses and think it is great they have doubled in price in 5 years or so. Why is it good?
Unless you own a bunch of them. As if you want to sell and cash in on your 'investment' then where are you going to live?
All it does is make it harder to get into the market for those not in it and make the people with multiple houses richer.
I'm all for getting richer but not at the expense of other people not being able to afford a place to live.

DirtyDawg

10th October 2008, 09:00 AM

Tis all very interesting some american forums are suggesting gearing up on "Bullets and bottled water":eek:
Crime will be an issue as people are forced into bad situations via poverty, suicides all the financial armageddon stuff.
Good idea about the veges though..I will start a patch myself..can't see paying $150 for bag of carrots....

Big problems China, USA second biggest customer I wonder what they will do?

I transferred my supa into property years ago through the creation of a super trust..might be an idea before the Govt allows them to stuff it for all those ready to retire...
Anyway hold on tight we are in for a ride...

mns488

10th October 2008, 09:29 AM

Big problems China, USA second biggest customer I wonder what they will do?

big problem here then, China is one of our biggest resource customers....

I'm not really concerned for myself, I'm 30 so lots of worklife left to rebuild super and I have no debt and most assets in cash these days after selling out of my share portfolio 2 months ago.

I think there are a lot of people in the Baby boomers category who are all going to have to either go back to work or continue working. My dad who has just retired was extremely lucky. He retired Oct last year (at the market peak just before the first drop). He cashed in a large portion of his super to pay out his mortgage on his home and rental property. That money would have been about 35% less now if he had left it in the super fund.

The other category is Gen Y people that live well beyond there income capacity and have large amounts of personal debt and no assets.

I met one last night, 20K on credit cards. I can't comprehend that!

Xavie

10th October 2008, 09:32 AM

If I were to be honest I would say I don't get the whole concept and definately cant fathem the outcome for myself and partner. If someone could explian what sorts of things happen that would be nice :) Then I can worry about it on my trip away.lol.

I will be living off savings for the next 3 years while I do uni, don't have any loans, debts or anything but I have no idea what will hapen to fuel, food, and the bills. We own our house and vehicles

IF fuel, food etc.. go up then my budget will fall apart... Right now I have decided $2.30 a litre for diesel is pretty much my max point. I can live cheaply on food etc.. but fuel is totoally necessary. I'm worried about it but not sure about what.

I did want to sell my house in a year and move out west further but that ain't looking very promising in this market.

Xav

PhilipA

10th October 2008, 09:58 AM

You know, in 1930 the world was an entirely different place.

The tertiary industries ( eg engineering, finance, banking, insurance, computer professionals,community service) that rely on human capital (brains)were in their infancy.
The % of GDP that was taken by rural industries was AFAIR over 60% of the Australian economy, manufacturing 30% or so.

Now rural is 5%, Tertiary is 70-75% , and Manufacturing around 20%

The productivity of most industries was very low. There was NO bulk handling eg wheat was packed into bags. My first job when I was 13 in 1962 was packing bags of wheat.
There were no large mining machines. Miners dug out coal with picks and shovels. There were no computers.
Many many people worked in jobs that are now non existent, eg typing pools, bag packers, miners,farm workers who gathered in the wheat etc

In China where mining is still primitive there are thousands of miners killed each year, more than the entire number of miners in Australia.China is still a primitive economy with about 70% or GDP taken by the rural sector. I suggest that you read "Mao's Last Dancer" if you think any Chinese would like to revert to communism.

So in 1930 unemployment rose to about 40% in the USA because there was no great use of capital equipment, so farming and industry laid off a lot of their productive equipment , which was basically unskilled people.

The "workers" could not afford houses because of an immature risk averse financial system, and this remained up until at least 1970 or so. I can recall the ANZ bank knocking me back for a loan (at 3.75%) because they would NOT consider my wife's income. We went out and borrowed 95% at 11% interest from a "loan shark".
So The ability to buy houses, cars, to have a credit card, to borrow to consume are relatively new developments, and the World in general and Australia in particular has benefitted enormously.

The IMF is predicting this week that Australia will have 2.5 % growth in 2009 and 2.2 % in 2010. Seeing population growth is not that high this means that per capita income will go UP.

Posters are correct that the whole thing depends on confidence But PLEASE keep it in perspective, because some posts here hint of irrational panic. The Central Banks now have seen what happens when credit is frozen, and are working to alleviate the problem, but it doesn't happen in a day.
Regards Philip A

stevo68

10th October 2008, 10:20 AM

Quote:
Originally Posted by Captain_Rightfoot https://www.aulro.com/afvb/images/imported/2016/08/768.jpg (http://www.aulro.com/afvb/general-chat/65123-so-what-will-depression-do-you-post830720.html#post830720)
No, so my children had a chance of buying a house for themselves one day :eek:

Well thats ok then..... Can't your children get a job, save up a deposit and buy a house like everyone else has had too?

A major price drop, bankruptcies, people losing their homes etc seems like a small price to pay so your children can get a cheaper house....

I am fully aware of the fluctuations in the house market, and if it does drop, it will go up again, but saying you want it to happen is probably not a particually sensible comment.Id have to agree with Pete on this one. A property crash affects if you are in the market selling property....over time it will always increase. Look at people who bought land for $15000 and now it is worth $1mill plus over a 20-30yr period. When my children are looking to buy property, they will have to do as everyone else has had to. Work hard, save a deposit etc.

This whole current mantra of people can't get into the market is a load of crap. There are people who are their own worst enemies and pay for everything on credit...young and old. They are in debt to the eyeballs and one hiccup, the cards come tumbling down. My future FIL is a case in example of what can be done....he decided mid 40's to change career, went back to TAFE, did a course in IT, had nothing financially behind him. 5 odd years down the track, he is a fully qualified IT teacher, has worked hard, saved his pennies and now has 3 properties. Young folk...same thing....got a 100% home loan, got into their first property at 21&22, worked hard, got stuck in and made the repayments, have now sold it, made a profit and getting an 80% lend on their next place. I dont owe my children or anyone elses children the right to buy property when their time comes.....just like me and everyone before me, it will be up to them.

In terms of the current economic client...where is the surprise.....for many self employed....the whole of 2008 has been a tough year. I still believe Australia will fair reasonably well. Also as far as I am aware with the US, home owners can just hand over their keys and thats it, different over here, we would fight to keep a roof over our head if need be. It also can be dependant on what industry your in, line of work, current financial situation as well. Anyone can read a negative headline and run with it and to date it is predominately overseas. My old man sent me a clipping today about a unit bought off the plan for $360...sold for $165k....chances are it was a margin call, person owned it outright and was in debt to the eyeballs and need $$$ quick.

As I said in another thread, just dont read a headline at least do some research and be objective. This has been around since the beginning of the year and 10mths later people are now talking about it :confused:

Regards

Stevo

JamesH

10th October 2008, 10:56 AM

My super has taken a hiding but seeing as i won't get my hands on it for at least another 15 years I don't see too much point in worrying.

I expect my super will recover, grow and then crash again at least once before I can use it.

Until then it is staying right where it is, in the section that copped the most beating - shares, because shares show the most growth over time.

p38arover

10th October 2008, 11:19 AM

The "workers" could not afford houses because of an immature risk averse financial system, and this remained up until at least 1970 or so. I can recall the ANZ bank knocking me back for a loan (at 3.75%) because they would NOT consider my wife's income. We went out and borrowed 95% at 11% interest from a "loan shark".

Agreed. We paid off our first very small, fibro/tile house (no garage) in about 9 years. We bought it when I was earning very good money of around $100 - one hundred dollars - per week with penalty rates. We had no furniture apart from what we bought second hand from Vinnies and similar places - except the bed, we bought new for that!

When we sold it in about '81 and needed to borrow $25K for our current house, we couldn't get a loan from a bank or building society, not even from the building society with which we had the previous quickly paid off loan. Money was almost unobtainable even though I was still earning good money. We ended up borrowing off an insurance company (GIO). The interest rate quickly rose to around 18%. I took a job in Saudi Arabia (without my family) to earn some money to reduce that debt.

Yes, I know $25K sounds like very little money but it was a fair whack at the time (about 3 Holden Coomodores).

Unlike a lot of people today, the last new car I owned was bought in 1971 - the next in 2008.

Today it seems people have to have a 2-storey McMansion with all new furniture (and lots of it to fill the large 2-storey house) plus home theatre plus two new cars. If interest rates ever rise to the level of the Eighties, those people will be up the creek.

p38arover

10th October 2008, 11:23 AM

. My old man sent me a clipping today about a unit bought off the plan for $360...sold for $165k....chances are it was a margin call, person owned it outright and was in debt to the eyeballs and need $$$ quick.

They are the bargains waiting to be found. I'm looking for a unit in the city!

stevo68

10th October 2008, 11:34 AM

Today it seems people have to have a 2-storey McMansion with all new furniture (and lots of it to fill the large 2-storey house) plus home theatre plus two new cars. If interest rates ever rise to the level of the Eighties, those people will be up the creek. As Ron points out, these are the highest at risk people and that hasnt changed. Lose a job, economy goes sour, there is no fall back position. Some folks learn...some don't. When I lost everything in a divorce, through being one of those folks, I swore if I couldnt pay cash...I wouldnt get it. Hence didnt have a credit card for about 8 yrs. I have one now purely for paying for a few things over the net, other than that I owe money on a house and 2 cars. All our furniture, office and home equipment is owned outright.

My problem at the moment hasnt been whether rates rise or fall, it has been the slowing of the economy and hence people sitting on their hands. SME's arent buying not just because of recent events, as stated before this has been going on for 10mths. Beginning of the year, rates going up, change of government late last year, the sub prime issue overseas and inflation rising. That combined with the generally negative media has sapped the market of its confidence. Rates are dropping, fuel has dropped, hopefully things will start to improve....though it is still a bumpy road ahead,

Regards

Stevo

Scallops

10th October 2008, 11:38 AM

They are the bargains waiting to be found. I'm looking for a unit in the city!

And also in the stock market - with the all ords below 4000 points.

Slunnie

10th October 2008, 11:50 AM

I think my wife and I will weather it, all my investments are in property and although their value will plummet it will eventually rise again, my company is self funded and my wifes work and mine continues no matter what is happening. But what will the depression do to you?
It'll probably have me out of a job (like most private school teachers) with mortgage still needing to be paid. I'd probably have to move to Sydney and mooch off the parents or find a job in the state education system which will probably all of sudden double in size...to hopefully pay for the bread and water and if anything is left over, then pay the mortgage if it hasn't been sold from under me for $1000 like in the US.

p38arover

10th October 2008, 11:52 AM

And also in the stock market - with the all ords below 4000 points.

My financial planner tells me the same thing.

mns488

10th October 2008, 12:21 PM

The IMF is predicting this week that Australia will have 2.5 % growth in 2009 and 2.2 % in 2010. Seeing population growth is not that high this means that per capita income will go UP.

I don't disagree with most of your post but the IMF suggesting rates of 2.5% & 2.2% is interesting considering we have just had the biggest fall since the 1987 crash. History shows that a recession/depression usually follows crashes....

Not saying it won't happen but i highly doubt we will hit anywhere near 2%!

ALL ORDINARIES (XAO)

As at 10/10/2008 1:15:32 PM
Real-time

Index Value3985.300Open4291.300Previous Close4291.300Today's Change-306.000
(-7.131%)Today's High4291.300Today's Low3962.3

Tote

10th October 2008, 12:24 PM

Last year I moved from a large multinational to a govt job and got a small pay rise at the same time. We can service our mortgage reasonably easily and property value is not an issue. As for super it is down the toilet but I am of a generation where compulsory super came too late to be worth anything other than a couple of cases of beer anyway. Even so barring super fund collapses it should recover. I'll just be sitting back, buying a few cheap shares and appreciating the security of a public service job.
Regards,
Tote

The ho har's

10th October 2008, 12:30 PM

I don't think it will effect us greatly......we live simply and we owe

nothing....though my shares will plummet they will rise again eventually I

have seen it before and dare say will see it again:)

Mrs ho har:D

Hucksta

10th October 2008, 03:27 PM

I think that our family will be ok. We both have govt jobs in essential services so an economic downturn is not going to bite us to hard. i do feel for the small business owners and people who are doing it hard.

The good ride was always going to end, that was never in doubt as far as we were concerned. We certainly didn't do what a lot of silly people did and over extend ourselves. I know people who are already doing it tough and although it is no good I can't seem to feel any pity for them. You see, these are the people who want everything now, the plasma, the double garage and ensuite, the nice cars and so on and so on.

Although we could get all that to, we made some sacrifices and only bought what we needed instead of what we wanted. We call it being realistic, so we will be ok.

The financial crisis will get worse be fore it gets any better, wait until the mining industry in Oz takes a dive and the hugely inflated property market comes back a bit.

Anyway, as I said, i feel for the battler, especially the pensioners and recent retirees. These people through no real fault of their own have been the worst hit IMHO. As for the greedy ones, well you made your bed, you can sleep in it ........

gdcd74

10th October 2008, 03:50 PM

Hi guys, the depression, well i am an over qualified professional with a double degree with a civil engineering and computing degree and my company has just shut there melbourne office - i am out of work. Yep, great job, great career and i dont know how to support my family day by day. Its real scary having comiitments and not knowing what the future holds. I may have to resort to leaving my family and going to WA to the mines for work but even there im struggling for work as they are seeking Mining Engineers - ie not enough experience in the mines. Scary times ahead i say. Hoping for a "knight in shining armour(land rover) to help us get through!!! Hopefully i get a job and can continue enjoying life./ Send me a PM if you can help me out with work. Any type of work. Anywhere.
Cheers
John

PhilipA

10th October 2008, 04:15 PM

Have been there done that twice.
It is scary at the time but most often you find that you end up better off.
Hit your networks and put the resume out there.
Maybe have a look at Dubai. They certainly are building non stop there.
And it isn't a bad or scary place to live, just bluddy hot in summer.
Regard sPhilip A

series3

10th October 2008, 04:22 PM

just coming out of uni and entering the workforce as we speak in the media game, and also not exactly being financially or economically savvy, i dont know where ill be in a few years. i have no debts, a hopeful future in my career, and a series 3. hopefully i can afford enough to pay for rent, food, fuel for a bit of a drive to keep me sane, then im a happy man.

going to be a very interesting few years ahead

PhilipA

10th October 2008, 04:25 PM

It'll probably have me out of a job (like most private school teachers)

Huh? I would be very surprised if the private school system felt many effects of a downturn. Governments of Australia LOOOOVE private schools and subsidise them mightily. Maybe they would have to cut out the free lunches for teachers, and the Friday night free drinks, and cut down on the new AV equipment. ( my daughter taught at a Sydney Religious private school until sickened by the excesses and complete lack of student discipline)
It is unimaginable that even a Labor Government would cut back the subsidies as the wealthy end of town would punish them.
The working class go to state schools and the working class always gets it worst in a recession.
Regards Philip A

PhilipA

10th October 2008, 04:28 PM

just coming out of uni and entering the workforce as we speak in the media game
If you are a good looking girl, you will be OK.LOL.
I reckon that media is the new Emperor's court.
Regard sPhilip A

FenianEel

10th October 2008, 04:31 PM

i have no debts, a hopeful future in my career, and a series 3.

Mate, what more could you want? :D
You have it made.

I noticed you didn't add wife/girlfriend/partner/co-habitant or children - keep it that way and you'll be loaded. ;) You might be miserable and lonely when you get old, but you'll be miserable, lonely and loaded. :D:D

series3

10th October 2008, 04:36 PM

If you are a good looking girl, you will be OK.LOL.
A

well i might have a problem, im an ugly bastard

gdcd74

10th October 2008, 04:39 PM

i disagree guys, find that "hot chicK' , brainwash her into landies, take her out into the outback and let the "tiger" in her come out.
Occasionally take her to town and spoil her rotten but in the mountains "she" will be centre of attention(according to her) and the time alone with her should be great. Women were made to be with Men - get one, brainwash her and elope!!!!:D

Lets not start with the stories.........
john

series3

10th October 2008, 04:44 PM

Mate, what more could you want? :D
You have it made.

i suppose keeping things simple is half the battle these days. i dont trust myself with a credit card, so i wont get one. If the market keeps falling and falling, some people might get a pretty rude wake up call about what they think of life.

edddo

10th October 2008, 07:12 PM

Well I will be ok due to...destiny..or just the course of events?..I have bought and sold 2 houses with an ex over the last 10 years and now all assets are in cash except the disco..and the ex is long gone (thank #$ist!) . I live simply and have a fairly secure job. I will go bush and live on trout if required. But realistically, I doubt that Australia will suffer anything like our catastrophic visions of a 'depression'..we have banked squillions from the mining boom and GST collection and our banks learned there lessons in the late 80's early 90's...we'll be right. Of course some will do it hard due to too much borrowing etc..but I do feel for those considering retirement now or in the next few years and there are plenty of you facing dilemmas about this.

defmec

10th October 2008, 07:48 PM

i will probably move to my old man place (125 acres) build a hut and hunt for my food .have the wife and children pick berries in the forest .damn its going to be hard giving up the internet

billnjim

10th October 2008, 08:04 PM

we should right, just a shame i have just left a permanent position doing 2:1 to try and progress a bit further as a contractor doing 8:6, being FI/FO most of my living expenses are covered by the company when on site & gold doesnt seem to be that affected at the moment with shares in the co. i currently work for having gone up a couple of dollars since the start of sept, (and we have just discovered another metal that is of v. high value at the moment with limited world resource/development - and no its not bloody iron ore and no it hasn't been mentioned to any shareholders etc until we can be certain of the quantity). we never spend with the cc unless we have the money to repay it that month, we own both our vehicles outright, and have a minimal mortage compared to alot of people we know but thats mostly due to starting of small and basic and progressing up to the house we have now rather than buying beyond our means straight away. i guess the ****tiest part of all this is I have to wait a bit longer before getting a disco but i guess good things come to those who wait and driving around in the defender for hols will toughen the daughter up, worse comes to worse the wife may have to go F/t permanent instead of part time/casual at her govt job (at the moment shes knocking back a heap of offers to return to Full time) but she really enjoys doing no more than 4 shifts a fortnight.

mcrover

10th October 2008, 08:16 PM

Im with WayneP on this.

Why is it that when a young person buys their first house these days it has to be brand new, have all the trimmings and they wont accept a job below $50k per year and if they cant get a job like that they will stay on the doll and collect maxed out credit cards until one presents itself.

I dont understand it but maybe that is because of my upbringing as would be most people my age or older that lived through the 80's recession.

I very much doubt that this will be a depression to the extent of the 20's/30's and a doubt that it will be even as bad as the 80's.

The reason for this is that our banking system is not totally reliant on the US and our mortgages are not as stupid as in the US.

I believe the reason the US has crashed is because they lent more money that their cliants were earning and to people who had no possible way of paying the loans back.

The NINJA (No Income No Job or Assets) loans were just the start of what is a greed driven society of which when people started handing back houses once their 2% odd honeymoon period was over and the interest rate rose to 12% to 16% and this then drove the house prices down due to a glut on the market and nobody buying.

The second wave came when the rest of the people who had the rediculasly high mortgages decided to hand back their keys and wait until the house came onto the market and buy it back at 80% of its inflated value.

The rest is history and so far over there the drop isnt slowing down very much, but it cant get much lower and once it hits the bottom it can only go back up and it should recover faster this time that the last 2 times.

You have to remember that in the last 2 crashes the world had no control over what happend due to problems with information not being able to get around as fast as these days with the internet etc so this time the world has jumped to so the fall and this I believe should save us all from a very very long depression.

Im waiting for another few months and then Im going to start buying property I hope as there is always a possitive to this sort of negative and that poss should be a more leveling out of property prices.

This is just my lay mans thoughts of the situation and a little hope thrown in.

Regardless of what happens, I will still be alive and I will start again, as I have done before, wont be easy but it is always possible.

If you have a trade and you can think outside the square then you will be fine.

Even in the last recession there was plenty of money to be made, you just had to look away from the usuall places and maybe back to the past for examples of what to do.

Vegi patch and maybe sheep in the back yard for food and go back to 1 car for the family will save a fortune which can then go onto the mortgage or into savings for when you cant pay the mortgage.

Dont panic, it's not all doom and gloom yet

Bennett

10th October 2008, 08:38 PM

Hi,

A rather long, but interesting read on one of the primary causes of all this (sub-prime mortgages) --> http://www.thislife.org/extras/radio/355_transcript.pdf

Rob.

CraigE

10th October 2008, 08:58 PM

Hey look there is pros and cons.
My super has taken a hiding and is down about 25%, but if the share market lifts and it will it will recover to some extent. I am still 24 years from retirement so it should be OK.
The main concern is the aussie dollar sliding compared to the greenback, so inflation may skyrocket.
On the plus side BHP shares have dived so I am getting better value for money at the moment buying shares monthly and they will go back up at some point.
We dont own a house at present due to the market overheating, but that may change soon as prices are coming back to a reasonable level. May teach a valuable lesson to greedy real estate investors and that is what has caused much of the real estate pain.
I am lucky at present as have had dramatic pay rises over the last 2 years. As long as nickel stays profitable.
So overall not a huge effect on us. Yes it makes life harder, but life goes on and we will survive.
I do feel for low income earners though.
Cheers
Craig

LRHybrid100

10th October 2008, 10:07 PM

so much negativity, surely it will not be that bad?

I have resigned from my job and need to find work in the New Year, bad timing eh!!!

but the world has to go on, just at a different pace.

LRH

mns488

10th October 2008, 10:24 PM

Awesome:(, US stock futures are down 2% before trading opens in the US in a couple of hours or so.

Another day of negatives for the DOW and bleak outlook for the Aus All Ords on monday.

Lots of opinions out there about whether or not a recession will eventuate but one fact remains the same, every stock market crash in history has been followed by a recession or depression!

I have heard a bit of talk about the markets being closed until the credit problems are sorted out. I think that would be helpful as it would certainly stop the computer stop loss selling...

Davy

10th October 2008, 10:25 PM

Is the glass half full, or half empty?

Davy

Captain_Rightfoot

10th October 2008, 10:30 PM

Is the glass half full, or half empty?

Davy

There isn't a glass :D:D

isuzutoo-eh

10th October 2008, 10:36 PM

Is the glass half full, or half empty?

Davy

In the case of loans, the glass is twice as big as it needs to be

BBC

11th October 2008, 01:25 AM

I am currently being paid in $USD and my next job starting in Jan 09 is in GBP...sooo....dive you $Aussie$....DIVE!

My commiserations to anyone who has any booked travel and holidays to the US. It would give me second thoughts.

DirtyDawg

11th October 2008, 06:46 AM

You know things are serious when the UK govt freezes the bank assets of another soveriegn state (Iceland) for 10billion pounds due to the bank not securing the deposits of its UK citizens...wow..what next :eek:
The ****e will hit the fan, its just a matter of when....bit like a financial volcano getting ready to blow.

300+

12th October 2008, 10:30 AM

Captain_Rightfoot

12th October 2008, 11:17 AM

Australia is a very different economy to the US. One of the causes of the sub-prime meltdown is that you can walk away from a home loan in much of the US without liability. If you have 100K of negative equity you are better to walk away from the loan and start again. You'll have a bad credit rating for a few years, but the pain of that will go away quicker than the pain of paying 100K that you don't need to. It is not as if the banks will give you a rate discount for paying the 100K.

In Australia, like most countries, you are liable for the debt, presumably until you declare bankruptcy. This means people will try much harder to repay negative equity and the banks will stay solvent.

I'll take a thorough economic downturn to keep the banks solvent. Much as it is grim to hear of the profits, we do need people not to lose their savings. Also, if the banks can make money, then there has to be a way for me to make money off that.

Cheers, Steve
I **really** hope you're right but as one commentator (http://www.jenman.com.au/news_article.php?id=244) has said..

"The four most dangerous words in the world for your financial health are: "This time it's different".

It's never different. It's always the same, but with bigger numbers."

Australia has massive consumer debt. I think the differences you mention will only make it more painful and prolonged here :(

I'm sorry if I'm a downer but if I'm wrong you can all have a good laugh at my expense in 18 months time :) If you can, I think you should do anything possible to batton the hatches.

EDIT: This is a favourite from this morning. Basically China saying sort yourselves out and keep buying stuff from us as this is inconvenient. (http://www.theaustralian.news.com.au/business/story/0,28124,24483489-36418,00.html) No matter what the costs to you!

scarry

12th October 2008, 12:33 PM

I recon this depression or whatever it is called will come ,gradually over the next year or so.
Things have been running too hot for to long,many things are overpriced including property.

For me,after working for around 30yrs,have a few investment properties,and have no loans.
The value of the properties will,or have dropped,but the domestic properties will always be tenanted.The commercial ones are more of a worry,as business confidence etc will drop.Without tenants,i will still have to pay rates,insurance,land tax,etc.

After paying off the last property,about two yrs ago,i started searching for another one,but the returns were to low,so held off.:)

As for my bussiness,it is small & family owned,& if work dropped off to around a quarter of what it is now,we would be ok.The staff would be the ones to go.The business also has no loans,and has good cashflow.

So overall,i should be ok,but as i am no financial expert,i really dont know what will happen ,these are only guesses.

The business will probably get a few bad debts,but we have to be smarter to avoid these.
I recon crime will increase,so we will have to be smarter in this area as well.
Govt spending will also drop,but how this affects us is unknown.

Rosscoe68

12th October 2008, 04:46 PM

might have to come out of my early retirement, start work again and stop travelling aus. 4 investment houses are good, but the mortgages might make the bank nervous if the value of those properties drops too far.

Rayngie

12th October 2008, 05:53 PM

Personally, i'm just trying to keep a positive outlook, Govt's around the world are pouring Trillions into the stock market, banking system etc, eventually this will pull the markets back surely, bearing in mind that the whole stockmarket system is run by greed and greed alone ( bit of a hypocrite here as i'm looking at taking my company public in two years! ), then no one is to blame but the market forces themselves...that's us, sure there are ***** who have played the system and got the rest of us into this mess, but we all wanted higher house prices, lower consumer goods prices, higher savings interest rates, lower mortgage interest rates....and on an on.

Thing is, my company is stable, good positive cash flow, no money owed to anyone with good forward work, my issue is that i import 4 x 20ft containers of goods every two months...thats' gonna hurt shortly....., where it will affect me is staff, they'll be the first to feel it as they'll go first unfortunately, that worries me more...but i think we'll be fine, read in the paper that on average world stock markets have fallen to where they were 5 years ago....no one was complaining then so it can't be all bad!!

rovercare

12th October 2008, 06:25 PM

It will delay the paying off of my house and inturn the purchase of a Supercharged Rangie:(

But that is all:cool:

Ralph1Malph

12th October 2008, 08:40 PM

SHOULD,and I say should be ok.
Liquidised all of my assets (bar one investment house) a few months ago to finance the family home. Huge mortage now, near 1/2 mil, but because of the cash we put in, still some hundreds of thousands ahead. So even with a crash of property prices we should be ok.
Govt job (Soldier) so ok there too. Someone mentioned 'bullets and bottled water', this worries me more....Labor govt have a tendancy to use the ADF as civil police, strike busters or chain gang labour. Well they did during Whitlam, Hawke and Keatings days. Luckily we're on 1200m2 and have a mango tree so should be ok.

Cheers
Ralph

rovercare

12th October 2008, 08:44 PM

Huge mortage now, near 1/2 mil,
Cheers
Ralph

:eek::eek::eek::eek::eek::eek::eek::eek::eek::eek: :eek::eek:

dirtdawg

12th October 2008, 08:56 PM

doesnt change much for me still lookin to buy a place atm in the 250 to 300k area

scarry

12th October 2008, 09:00 PM

:eek::eek::eek::eek::eek::eek::eek::eek::eek::eek: :eek::eek:
1/2 mill doesnt buy too much anymore:(

Wouldnt mind a good mango tree :)

I'v got 3/4 acre,dont know how many meters squ. it is ,mainly bush.

With the downturn coming,may have to clear it,and plant some trees,get some chooks & a vege garden.

Umm,& get the water tank i was gonna get to water them.

mickashay

12th October 2008, 09:02 PM

i wonder if you had spare cash to go invest in something thats dropped right out and sit it out till it goes back up again??

rovercare

12th October 2008, 09:03 PM

1/2 mill doesnt buy too much anymore:(

Wouldnt mind a good mango tree :)

I'v got 3/4 acre,dont know how many meters squ. it is ,mainly bush.

With the downturn coming,may have to clear it,and plant some trees,get some chooks & a vege garden.

Umm,& get the water tank i was gonna get to water them.

Half that would buy my house on 6 acres, that amount would have you on50-100 acres with a nice dwelling here, or a mansion on 5ish acres

scarry

12th October 2008, 09:21 PM

Half that would buy my house on 6 acres, that amount would have you on50-100 acres with a nice dwelling here, or a mansion on 5ish acres

I know the price of property here is rediculous,read somewhere the average price in Brisbane for a house is 450k:eek:

If you saw Rudd on at the end of 60 minutes tonight,he recons property prices will drop & unemployment will rise,so suppose we have to wait & see.

The only good news is he has guarranteed our money in the bank,only for the next 3 years.

LandyAndy

12th October 2008, 09:21 PM

Not really going to effect us at all.
Been a tough struggle over the last 15 years.Had trouble getting good jobs,vehicles costing way too much to run(3 expiring motors despite good maintence),a child who is now 14,a major back injury that cost me 2 years of my life.
NOW,both of us full time employed,both loving our jobs,actually finding "SPARE CASH" that is being fed into super:eek::eek::eek::eek:, and extra house repayments on that huge $29000 mortgage:cool::cool::cool:
NOT REALLY LOOKING FORWARD TO MY NEXT SUPER STATEMENT DUE ANYTIME:mad::mad::mad::mad::mad:
BRING IT ON
Andrew

rovercare

12th October 2008, 09:34 PM

I know the price of property here is rediculous,read somewhere the average price in Brisbane for a house is 450k:eek:

If you saw Rudd on at the end of 60 minutes tonight,he recons property prices will drop & unemployment will rise,so suppose we have to wait & see.

The only good news is he has guarranteed our money in the bank,only for the next 3 years.

I'm over 100k ahead of my property value, that's cold hard cash, without inflation of the value, with 126k to go, I own everything else, the costs in the near future will be kidlets, beer and fuel going up and that's it

Having a loan of 450k, means over 40k p/a gone in interest, thats my rangie sport in 4 years of payments wasted:(

If you live within your means, you'll be fine, Overcomitted? your screwed:D

p38arover

12th October 2008, 09:35 PM

NOT REALLY LOOKING FORWARD TO MY NEXT SUPER STATEMENT DUE ANYTIME:mad::mad::mad::mad::mad:
BRING IT ON
Andrew

I just checked mine today (on-line) - another $30 lost in the past 10 days.

SenatorKang

12th October 2008, 09:42 PM

i have about $18k fixed rate personal loan and $1500 on credit card... the credit card is being paid off as a priority (it's the one thing i regret). i don't want to buy a house any time soon and i just got into a job with an oil and gas company* that is so desperate for people you can pretty much go anywhere you want with them (if you are a hard worker - the way it should be. not like my last job. lies. all LIES! but that's another story). the company should be safe for the next 80 years or so, until we run out of oil. hopefully by that time i will be out of this semi-skilled rubbish and into a career. or dead...

...yes, i'll be 101 in 80 years, so i think i will be very nearly dead. but i digress.

to top it all off i have about $2000 in super as i've only been working for 3 years - easy come, easy go.

*i know - i would quit if i could but i think i'm in a good position financially with them, i shall have to leave my personal hatred of US oil companies at home until things are more secure :(

i think i'll be fine. i have very little to lose and my debt is not enourmous, seems to be a good position

Hymie

12th October 2008, 10:44 PM

Not looking really good here.
I had a good business going up until a year ago with disabled transport buses. The Govt has since then provided my customers with low cost vehicles and volunteer drivers.
So, no business+1 idle bus+1Tax debt=bad news.

2 rocks

12th October 2008, 10:52 PM

Hey SenatorKang
Any more jobs going at your company?
Have computer, HR, admin and management experience! :) Oh, also bloody hard worker! (or so I was always told)

Well I am screwed! And I know that. Invested in an nice property a while ago (ocean views yadayada) but partner's illness meant several bouts of refinancing due to her inability to work. Then she shot through last year, so am now trying to sell a property in a depressed market being crushed by interest rates and the collapse - with no option.

Then leave secure job for the promise of something bigger and better (should be able to afford house on my own) and company falls over! So currently doing courier work - not to make ends meet, but to try to slow the rate they are retreating from each other. :eek:

If I could have stayed here I'd have a million $ property in a few years for a very minimal intial investment. Clearly Karma had other plans... ;)

Still as long as I can keep hold of the D2 and the Heep...
Mike