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If you don't own a home by your 40s, you never will. And you'll end up poorer than those who do.; Silly bears who think they can rent their way to wealth are only fooling themselves...
Topic Started: 10 Oct 2016, 07:29 AM (8,607 Views)
Khaderbhai
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Wealthy Suburbanite

As discussed last week, although the bears refuse to admit it.

The truth is it costs far more to rent for a lifetime than it does to buy a home.

And homeowners end up vastly more wealthy than renters.

People like Crazy Ted and Steve Keen seriously damaged their financial futures by selling perfectly good Sydney homes just before the recent boom.




Life-long renters face financial stress in retirement, new report says

Oct 10, 2016

If you do not own a home by the time you are in your late 40s, you will probably never own one — and you will probably be significantly poorer than those who do.

That is according to a paper released on Monday by Swinburne University, which found more Australians are renting in retirement and facing financial stress.

“Housing is a probably the key way of generating wealth, but people who are unable to purchase or fall out of home ownership will find that they don’t have as much wealth in retirement,” research author Andrea Sharam said.

The paper showed if you had not purchased property by mid life (45-49 years old), there was a strong likelihood you would not purchase thereafter.

Financial experts have previously advised “generation rent” — the growing cohort of young people priced out of the property market — would find it difficult to retire as wealthy as a property owner, largely because Australia’s retirement income system is predicated on owning a home outright in retirement.

The study also showed that in the older age brackets, 65 to 69 year olds, the wealthiest segments were those who owned both their own home and other properties.

http://www.domain.com.au/news/lifelong-renters-face-financial-stress-in-retirement-new-report-says-20161007-grvgqb/
Edited by Khaderbhai, 10 Oct 2016, 07:40 AM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Bardon
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Its their bear cubs that are brought up in the ideological rental caves that I fear for most.

Quote:
 
For Leigh Evans, 41, purchasing a property has never been an option. She is currently house sitting in Coburg, in Melbourne’s north, but sees her housing future as insecure.

“I grew up poor, both my parents never owned a home when I was younger … so I never had that expectation,” the business analysist and author said.

Ms Evans said the research made her retirement situation appear bleak.

“I look forward to dying early,”


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Edited by Bardon, 10 Oct 2016, 07:52 AM.
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Khaderbhai
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Wealthy Suburbanite

Bardon
10 Oct 2016, 07:45 AM
Its their bear cubs that are brought up in the ideological rental caves that I fear for most.
Agreed. Despite the social stigma associated with admitting that their parents are still just renters, the offspring of renters often still end up following in their parents footsteps. It becomes a vicious circle of wealth erosion. Whereas homeowners tend to encourage further homeownership in their children, as well as passing down valuable assets to the next generation - a virtuous circle of wealth generation.
Edited by Khaderbhai, 10 Oct 2016, 09:15 AM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Black Panther
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Tough times ahead for life-long renters

A new study has found if you don’t own a home by your late 40s, chances are you never will.

A paper to be released today by Swinburne University has found that more Australians are renting in retirement, making them more likely to deal with financial hardship, Fairfax Media reports.

The authors suggested 49 was the ‘cut-off’ age for purchasing a home, saying there was a strong likelihood people would not purchase in their 50s if they hadn’t already.

While Gen Y is typically discussed as the cohort priced out of the property market, the research shows a growing number of older renters are experiencing consequences of long-term renting, including impoverishment and housing insecurity.

The study’s authors have called for the axing of caiptal gains tax and to reinstate a small ‘inheritance tax’ to reduce the gap between homeowners and renters.

http://www.domain.com.au/news/lifelong-renters-face-financial-stress-in-retirement-new-report-says-20161007-grvgqb/
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Will
Unregistered

I could be wrong but I think the could be an 'x' factor here. Missing from the article. The Possibility that the late 40 something might inherit a house. Odd that the arilcle doesn't consider this a possibility.

While I agree in principle with the article, about 30 to 40% of these late 40's house-less people will eventually end up with one, no matter how financially inept they are.
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Simon_S
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Quote:
 
“Housing is probably the key way of generating wealth, but people who are unable to purchase or fall out of home ownership will find that they don’t have as much wealth in retirement,” research author Andrea Sharam said.


Is that a PPOR with no Yield......

Imagine what will happen when Interest Rates rise.........Surely they will stay at Record Lows Forever?

Love all these base assumptions about the future being perfect. What could possibly go wrong..........


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Will
Unregistered

Khaderbhai
10 Oct 2016, 09:14 AM
Agreed. Despite the social stigma associated with admitting that their parents are still just renters, the offspring of renters often still end up following in their parents footsteps. It becomes a vicious circle of wealth erosion. Whereas homeowners tend to encourage further homeownership in their children, as well as passing down valuable assets to the next generation - a virtuous circle of wealth generation.
You're quite right on this one, generational wealth buildup is very powerful. It makes a heck of a difference to the outcomes of people.
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Foxy
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Zero is coming...

Khaderbhai
10 Oct 2016, 07:29 AM
As discussed last week, although the bears refuse to admit it.

The truth is it costs far more to rent for a lifetime than it does to buy a home.

And homeowners end up vastly more wealthy than renters.

People like Crazy Ted and Steve Keen seriously damaged their financial futures by selling perfectly good Sydney homes just before the recent boom.




Life-long renters face financial stress in retirement, new report says

Oct 10, 2016

If you do not own a home by the time you are in your late 40s, you will probably never own one — and you will probably be significantly poorer than those who do.

That is according to a paper released on Monday by Swinburne University, which found more Australians are renting in retirement and facing financial stress.

“Housing is a probably the key way of generating wealth, but people who are unable to purchase or fall out of home ownership will find that they don’t have as much wealth in retirement,” research author Andrea Sharam said.

The paper showed if you had not purchased property by mid life (45-49 years old), there was a strong likelihood you would not purchase thereafter.

Financial experts have previously advised “generation rent” — the growing cohort of young people priced out of the property market — would find it difficult to retire as wealthy as a property owner, largely because Australia’s retirement income system is predicated on owning a home outright in retirement.

The study also showed that in the older age brackets, 65 to 69 year olds, the wealthiest segments were those who owned both their own home and other properties.

http://www.domain.com.au/news/lifelong-renters-face-financial-stress-in-retirement-new-report-says-20161007-grvgqb/
For most of the people you are correct.

For the 1% that do or are rich.

Houses are not an investment.

At all.

They are a cost of living.

To say it is "cheaper" to own than rent is not true.

But for the majority, myself included it is better own your own home.

As who in their right mind would put money into a house to rent at a loss to someone they do not know.

My mom and dad rented for years.

Mom worked as a nurse, dad started numerous small micro businesses until i left school at 15 to partner in a small country hotel.

But remember mom and dad bought and sold over 120 houses as a business.

So my view of a house may be skewed.

If i was starting again, the LAST thing i would do is buy a house.

LAST.

I would educate myself in markets and mathematics.

I would play games that increase my critical thinking.

Build a risk model.

Then i would take what ever capital i can get and invest it.

And work in an industry that complements the above.

Good luck to all.

Peter





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Khaderbhai
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Wealthy Suburbanite

foxbat
10 Oct 2016, 10:18 AM
To say it is "cheaper" to own than rent is not true.
It is true.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Foxy
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Zero is coming...

Khaderbhai
10 Oct 2016, 10:20 AM
It is true.
For most people yes.

And i do own my own home.

But for the rich it is a poor investment, and that my good friend is why most people are poor.

Peter
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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