Warning: Real Estate discussion potential ahead. This is one of the scariest news headlines I've seen in quite a few years. Keep stacking folks. Source: news.com.au http://www.news.com.au/realestate/n...et/story-fncq3gat-1226493797529#ixzz2IWciYs1m
There numbers are based on an over bloated property market and supposed future value of the super annuation (not taking into account inflation or possible loses by incompetent managers). So the news is another fluff piece.
Thanks for the post Julie. I never ever knew I was soooooooo rich! I may just have to go out and buy so more silver! If things keep going well, I too could be a millionaire soon as I am half way there at least! Go RE or maybe Silver! Regards Errol 43
Everyone knows property prices will always keep rising, no matter what. I actually read that in the financial section of a newspaper the other month. I don't remember the newspaper but the author was dead serious.
Asset rich and cashflow poor. People get to feel wealthy for merely owning the deed to their house, or owning a mortgage. So if we've passed euphoria, I guess this is denial?
Yes we are doing swimmingly here in the lucky country, a private debt level of 255% of GDP. I guess if you measure debt as wealth we are bounding ahead. http://www.debtdeflation.com/blogs/2012/01/28/economics-in-the-age-of-deleveraging/
Most wealthy people i know are asset rich & cash poor (in relative terms) thats how they become asset rich by ploughing their cash into hard assets
I don't see why property prices couldn't go to the moon. I just note that the value will likely decline.
Most poor people i know are debt rich & cash poor (in relative terms) thats how they become poor by ploughing their cash into trinkets and gratification.
actually it depends on what you term is an 'asset', unfortunately most people views assets as the junk and trinkets that they purchase.
This is the bit I love. Knowing that people list down their car as an asset, even though it's almost wholly owned by a bank under a finance arrangement with the dealer they got it from. :lol:
To be fair, it is an asset, so they get that bit right at least. Working out whether it's their asset or the bank's asset is where people start going wrong.
And assets that depreciate vs assets that may appreciate. Buy a car for $30k, sell it the next week for $27k, or in five years for $18k... Meanwhile, in debt land where riches abound, the total car debt (inc payments) grows to $60k. Now that's an asset!
Rapidly depreciating personal assets like cars/computers should always be paid for with cash rather than through the banking system as the banking system magically creates a % of the value in new "cash" but doesn't create the cash needed to pay the interest bill. One way path to debt slavery with feeding of the parasites with bankruptcy the only way out. Somehow I instinctively knew this from day 1 and have always paid cash (thank goodness).
So they should be including the interest value of that $30k Car and listing that asset as $60K, Shit their richer than they thought :lol:
Well the bankers sure are. Looks pretty good on their balance sheet. Until you get to the point where debts can't be paid. Then you've got the old problem of owing a million to the bank being your problem and owing the bank a billion being the bank's problem. With the billion metaphorically representing the accumulated debt of Australia.
As a little boy growing up in a working class suburb watching most of the Italians and Greeks hoe into property and running their own small business made me realise the cash flowed from the business to real estate was a slow road to extreme wealth. If you adjust that model using trusts to hold your business income and properties in seperate entities there are further tax deferment benifits. The longer you can defer the tax the great the compounding. Think and grow rich Kind Regards non recourse
