Now act on this.
A reader writes into the news outfit Crikey and admits some important truths,
“Back in the ’60s and ’70s my wife and I were able to pay off our house in 10 years on only my modest salary as a teacher. We had no help from rich parents or any inheritance. We simply saved and bought a modest but very pleasant house in the outer suburbs of Melbourne. How totally unfair that my grandchildren have no chance of doing the same thing.
We pretend that somehow we have “advanced”, and yet one of the most important aspects of our lives, the ability to house ourselves, has gone well and truly backwards. One of my grandchildren with his partner has now bought a house, but recent interest rate increases have meant that basically all they can do now is pay the interest. They will be lucky if they can pay off the mortgage by the time they retire. On the other hand, because we could pay off our house in 10 years, my wife and I are now totally self-sufficient with a modest superannuation fund that should see us though. We will (hopefully) not need any support from the government. But what is going to happen when all these (now) young people reach retirement with nothing behind them?
The fact that the average politician has at least one “investment property”, and many have more, means that there is little incentive for government to do anything serious about the issue. We of the older generations have created a dastardly problem for young people and we must take responsibility for fixing it. We owe it to them. If that means we have to give up our tax perks and deal with rent caps, and more, then so be it.”[i]
It is rare, but refreshing to hear this admission, “We of the older generations have created a dastardly problem for young people and we must take responsibility for fixing it. We owe it to them.” This is just a simple truth. I am old enough to remember how cheap my parents homes were in the 90’s and I also remember seeing the beginnings of the investor boom back then as well. Suddenly, those who were in their 30’s to 50’s in the 90’s were recognizing that this whole new, largely untapped market was ripe for financialization. And the rest is history, now most people I know who are younger than me cannot buy a house, or if they do, it is very small, over-priced and they did it with double or more[ii] incomes.
The older generations have bled the government for welfare and benefits and they have also driven homes out of the reach of their children. Seeing someone of that generation recognizing this is a good sign. I pray that this would increase.
I suggest a few practical things:
1) Invest, financially and practically in your children’s and grandchildren’s lives, don’t make them go it alone socially or financially, give them a leg up. Every time you watch the kids so they can work, or rest, or whatever, you build strength into the family. Whenever you lower the weight of their cost of living by replacing childcare, or helping them pay of their home, or something else, you invest in their ability to provide for their children and grandchildren in the future.
2) Use your great financial influence and political power to pressure governments for debt forgiveness, getting rid of negative gearing and other things. Boomers were so powerful, for two years they shut down the economy and society over fears from covid. I spoke to someone recently who noted that the older people in a certain church caused it to stay closed for longer, because they were afraid of the virus. This story is true in a thousand ways in other contexts. Turn this influence to good. Use your influence to advocate for policies that financially benefit your children, like drastically decreasing immigration so your children don’t have to compete with foreigners for jobs, or tax breaks for homes with 2 or more kids, and higher tax breaks the more kids there are, and other forward family thinking policies.
3) Change your expectations in retirement from constant holidays and resort style living, and travelling the world, to basing your life as much around your family and your church as you can. A lot of younger people feel like orphans. If you have to work, through no fault of your own, we get it, such is life. But if you can work less, or live with family to work less, or do less caravanning to be around more, you will make a massive difference to people’s lives.
Let me leave you with what this other reader writes,
“For years the media have trumpeted real estate price rises as a positive sign for the economy, as a good thing for us all. The sad reality is that it’s a good thing for the wealthy and for foreign investors and developers but it’s a terrible thing for the middle and lower classes. I wish someone would stand up for what is ethical rather than for what is profitable.”
If you agree with the boomer above, you can be one of those who stands up for what is ethical, rather than what is just profitable, because what is ethical will be more profitable for your children and future generations anyway.
[i]“ The crisis that’s hit home: Australians pay the price for the housing debacle”
Story by Crikey Readers, Crikey. https://www.msn.com/en-au/news/australia/the-crisis-that-s-hit-home-australians-pay-the-price-for-the-housing-debacle/ar-AA1bAUv4?ocid=emmx-mmx-feeds&PC=EMMX01
[ii] The way you get more is by parents or friends chipping in, to partially own the home.
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