Middle class family entry level coastal cruisers, what are they?

[dwedeking2]

At least in the US, I think the acceptance of what is "bare minimum" also has an effect on people taking on older (more price efficient) boats. I just read "Windswept" by Ginny Sollars, it's about a family traveling the South Pacific in a 36 monohull in the 1980's, and they would get killed in the forum of public opinion for attempting what they did with their kids if they tried to do it today. Their "bare necessities" wouldn't allow most to leave the dock for an overnight trip, let alone one across an ocean.

[Captain Bucknut]

Originally Posted by danielamartindm

The middle class has definitely shrunk and declined in the last forty years. Wages have simply not risen to match years of inflation and higher costs of living. New vessels are beyond the means of many, and I think most who still dream of the sea strike a balance between newer boat/higher price and older boat/cost to re-fit. Boat ownership, especially for younger Americans, has declined, but they are finding other ways to pursue sailing. There are moderately priced gems out there, it just requires patience and knowledge to find them. And btw, I think Catalinas are a great value, and are capable vessels.

YES! Catalinas are GREAT boats at a Great value

[Tetepare]

Originally Posted by daletournier

A fellow sailor said to me recently" my neighbours buy new cars, they cant afford old ones, the old ones requires they have cash the new car is on finance" maybe some truth in that with boats?

Yes. It's difficult to find financing for a 20+ year old boat.

Even for many newer boats, the finance rate is 6%+ whereas autos can be as low as 0% and not likely higher than 3%.

From a purely financial perspective, if one has $20,000 cash and wants to spend a total of $100,000 the interest alone for boat vs. home is frightening.

I ran the numbers with the rates from my credit union. That $80k boat loan is going to cost $45,000. Same amount, same term for a home mortgage costs only $20,000. Then figure in depreciation or appreciation on each.

*******

I think there are two major drivers for millennials staying away from boating: first, they blow every dime as fast as they get it and are in debt for home equity loans, the BMWs, even the furniture. Second, the suburbanites/ middle class have quit the outdoors. (Softball does not count as "outdoors" in my book.) Basically, Americans have become spendy pansies.

[tinysailor]

Q time......

What do the youth of tomorrow want?

What can the youth of tomorrow afford?

What's more important for the youth of tomorrow - a financially depreciating asset or a possibly appreciating asset?

Apologies for no answers, only thoughts...

Who knows how 'middle class' of the future may be defined.

Middle class appears for me as a private education (or selective at best) plus weekends on the boat. It's the network that's paid for, not necessarily the education (that's down to us).

That's not occurring as a single providers income only (that would be the definition of minimal middle class for me - Dad works, Mum doesn't have to) however education for you child in my eyes will remain the biggest investment.

I hope these early years onboard as a weekender give my son the thoughts and courage to pursue as to which may be beneficial for him and others.

Kind regards,

TinySailor

[Southcoasting]

I think there are many factors on why it may not be feasible for young people to get into the cruising game...beyond how expensive it is to live on a month to month basis now (most live paycheck to paycheck)...

Secondary education has become a diminished return on investment. There are many graduates these days that work at restaurants than in office jobs. Not by preference, but by necessity to keep up with their school loans. When I went to school in the early 2000's, not only was my eucation about $10k a year, we had different payment scructure where our monthly payments we low and deferred for a long time at super low interest rates.

Somewhere along the line, secondary education has become big business and now, cheap is $20k a year. NOw, that $80k of debt has to be paid back immediately and at super high interest rates. So right away, kids graduation from college these days have a $600-$1000 dollar monthly tuition debt bill to start off in life...Horrible way to start you goal into being a part of the "middle class"...Nevermind getting a house, car, etc...If why so many young kids now don't care about getting a license/car/house...They know it's much better to just live in the city and get around by public transport and live in rather expensive rental apartments where they have 3 roommates because, it's they only way they can afford the high rent price.

So the young people you see buying boats and fixing them are those who intend to not be in this rat race and want to instead travel or, are just looking for alternative ways to live cheaply. Hence the tiny house movement, etc etc...

In my personal case, I have a good job (for now) and so does my wife and we bought our boat cash cheap knowing it needed tons of work...but we have the space to store it in our house and I have skill or the willingness to learn knowing this is how we will make the possibility of having a 34 foot sailboat happen and still have living expenses, school loans, house, kids,and cars...Plus we are frugal, bought used cars that I maintain myself and our house was a fixer bought when we had one income so that we can live "above" our means...

but to answer the post of OP, that answer is based on their needs, goals, timeline, budget. You can buy a nicely rebuilt older boat for about $10k-$20k...depends on size...for coastal cruising, type or make won't matter...or you can buy a true fixer for $1k-$5k and work on it little by little and have a worthy family cruiser in time...plus it depends on the demands of how much space that family needs...Me, it's just my wife and daughter...so our 34 footer will be good for the rest of our life, even if we added a second kid...but then again, our needs for space/fanciness is super tempered compared to other people who feel they need a 40 footer for three...

[john61ct]

NBD but "secondary education" is high school, after that is tertiary education, college, university or further vocational study.

[Southcoasting]

Originally Posted by john61ct

NBD but "secondary education" is high school, after that is tertiary education, college, university or further vocational study.

Meant post secondary...have a few mistakes on my writing...don't mind me as I was in a hurry to type...

[Tbonem17]

This is from an Australian perspective but would apply the world over. The Middle Class are drowning in debt paying for the excesses of others. Sorry about the formatting but the original article was much larger.


SOMETHING TO THINK ABOUT

Australia is a civilized, caring society that looks after our young, underprivileged, unemployed, immigrants, sick, aged and disabled.
Well we used to be.
The country is in hock and our deficit’s getting worse by the day as fewer and fewer Australians want to and do pay for these worthy ideals.
So how can the “Lucky” country be bankrupt morally and financially and how are many Australians avoiding their God given right to pay their fair share?
How did we ever get to the point where tapping into the countries purse is considered a right?
Since when did the Australian Treasury become a bottomless pit never to be paid into if at all possible and fair game to be gouged at every opportunity?
Whether it be some Multi National Company based somewhere like the Isle of Mann artificially inflating their prices to their Australian subsidiaries so that they appear to make no profit which incurs little or no tax in Australia, or if it be one of the multitude of Australians who wouldn’t dream of earning a real living as they’re doing so well on Government handouts, or they might be the rich who have negatively geared themselves through their Self-Managed Super Funds to the point they’re paying a pittance in tax especially after their capital gains discounts.
All of the above are perfectly legal thanks to our bloody politicians but this mindless profiteering and greed isn’t victimless. Those of us that actually pay their fair share in this country are the victims.
Australia is the victim.
Every dollar that is saved or gouged is one more that the net tax payers have to cough up.
The above is by no means complete as the list of rorts is seemingly endless.
Australian Company Taxation
https://data.gov.au/dataset/corporate-transparency
When on this site click on the explore button/click on the resource button and on the next page click on the data button at the bottom of the page.
I have posted a link to the Australian Taxation Depts. own report on publically listed companies, Australian owned and Multi Nationals with turn overs in excess of $100 million
(Australian income) for the financial year 2013/14.
This list should be compulsory reading
The list gives the company name, gross income, net income and the actual sum paid in Tax for the 2013/14 financial year.
– 600 of the approx. 1500 companies paid no tax at all, some with revenues in the billions
- 80% of these companies had an effective tax rate of less than 5%
It would appear that some of these companies actually paid a reasonable amount of tax yet it’d be naïve to think that their fleets of accountants and lawyers hadn’t minimized their profits. They just made such obscene profits they couldn’t avoid paying something.
The current government has also legislated the taxation dept release information on some privately listed companies at the end of this financial year. I see no reason to believe that many if not all of these companies haven’t been doing the same thing.
I am not suggesting that any of these entities have broken any laws. I am suggesting that most of our politicians past and present have either so little idea of what they’re doing, or are willing to agree to anything to get elected, or are the recipients of generous campaign funds, or are grossly/criminally negligent or all of the above. Take your pick.
Our air waves are continually filled with Politicians dribble telling us all how we have one of the highest company tax rates in the world and that we need to reduce current rates. How we can make things easier for them?
Apparently even a less than 5% tax rate is too high.

Anyone would have to seriously wonder whether the good these companies do like employing Australians is outweighed by their massive tax avoidance.


THE HUGE AUSTRALIAN GOVERNMENT HANDOUT
1. We are living in the age of entitlement.
2. We are living in the world’s biggest brothel where our government will pay anyone to have sex.
Having children used to be something that was considered very seriously as one had to be able to afford ones choices.
Not anymore
And that’s the whole point really as it’s a choice to have children.
There are probably many Australians who feel they’re supporting the country by having children.
Hardly because all the evidence points to the country supporting them instead.
We were all immigrants to Australia at some stage so if we really do need a larger population no one should have anything to complain about us importing some more immigrants to fill the gap.

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30% of Australian households receive more in benefits than they pay in tax.
A further 20% of Australian households are receiving some benefit from the government.
It was interesting to note that our current treasurer was all excited recently about increasing the GST but changed his mind after doing some study into what it was going to cost the government in compensation to the less well off.

There are so many handouts that aren’t included in the above. I have no idea what they all are but a few that spring to mind are
Parental leave for fathers
Youth Allowance - to think we pay so much to parents to bring a kid into the world only to pay all over again to fix their stuff ups. These kids weren’t born that way, they were brought up that way.
Unemployment
Disability
I heard of another study recently that the government was doing re paying Australian surrogate mothers $53,000 for their service. This would be paid by the government with nothing of this payment being passed onto the eventual parents of a baby as a fee. After the recent child care rort that was unearthed it’s easy to imagine two couples getting together with the aid of a bent doctor and arranging to have each other’s babies for $53000 ea. Hell if the doctor’s bent enough you could get paid $53000 for having your own kid.

NEGATIVE GEARING AND CAPITAL GAINS TAX
The first two categories I have mentioned above (Company Taxation, Government Handouts) are having a serious effect on this country but I’d guess the damage they’re doing pales into insignificance compared to what this group are doing to Australia.
To be fair it is not only Negative Gearing and Capital Gains tax that has caused the explosion in house prices.
The following paragraphs have been borrowed from Wikipedia -

Australian specific market factors[edit]
The Australian market had several features either singly or together are not typical in other housing markets, being;

• Very constricted land supply and extremely onerous planning approval processes
• Unusually high stamp duties
• Income Tax relief through negative gearing
• Social security (Centrelink) that offers payment including rent assistance that is calculated on the amount of rent paid
• A Federal, state and local council divide that complicates land release and planning and direct and indirect taxation on land
• Only recourse loans
• One of the most highly urbanised populations
• Large areas of rural and remote Australia can not secure loans from banks against land in those areas.
• Statewide land use planning that heavily restricts subdivision and greenfield development, driving land prices to extreme heights

Basically the above says that our house price explosion was caused principally by our politicians right down to the Councillors at the Local Government level.
How can we continue to elect these people? What a bunch of self-centred, or inept, or criminals or all three they are.
They have been helped along in no small measure by those Australians happy to take full advantage of our politicians gross/criminal (take your pick) negligence.
Some will be saying so what about now so read on for some more I’ve borrowed from Wikipedia
Effect of inflated housing prices on the greater economy[edit]
Diverting capital away from the rest of the economy[edit]
Increased residential housing costs can cause excessive lending to the residential housing sector, at the expense of businesses. This can lead to "a banking system which allocated capital away from the most productive areas of the economy — business — is ultimately bad for growth, bad for competition, bad for jobs, bad for business and in the end, bad for Australia."[28]
Research conducted in overseas markets confirms that "in areas with high housing appreciation, banks increase the amount of mortgage lending and decrease the amount of commercial lending as a fraction of their total assets. This allocation results in firms receiving reduced loan amounts, paying higher interest rates, and reducing investment."[29]


Mortgage and rent stress[edit]
Increased housing prices and therefore increased borrowings can lead to difficulty in meeting housing payments. According to Ratings agency Standard & Poor's (S&P), "Arrears for sub-prime loans backing RMBS [residential mortgage-backed securities] jumped 126 basis points to 11.45 per cent"[30]

Some bells should be ringing about now because this last piece from Wikipedia describes the state of the Australian economy and people beautifully.
So this now leads to trying to determine how bad everything really is.
I found this next piece on the internet which was compiled by a master’s student at Deakin University.
Why should we believe this?
It wasn’t compiled by a politician
It wasn’t compiled by a political party
It wasn’t compiled by the real estate institute
It wasn’t compiled by some business/banking group
It wasn’t in a newspaper
I’ll take my chances that this is an unbiased reporting of the truth or probably the closest we’ll get.
I have a link to the entire article below and I have copied across the final conclusions


http://www.macrobusiness.com.au/2013/02/the-history-of-australian-property-values/



In conclusion, the data presented should provide more than enough evidence to suggest that Australia’s residential property market (specifically land market) is vastly overvalued, driven by debt-financed speculation and the relative non-taxation of land rent. While land bubbles have been a continual feature of the Australian economy, what separates this cycle is the relative enormity of the boom in both land values and private debt. A smaller private debt to GDP ratio during the 1880s and 1920s was enough to produce two devastating depressions, including a number of recessions during the mid-1970s, early 1980s and early 1990s.
The question is often asked why housing prices are so high. Instead, the real question is to ask why prices are so low. The banking and financial system is ready to lend absurd amounts of debt to the willing army of “greater fools,” and has constructed an elaborate chain from mortgage brokers’ offices through to the business development managers (BDMs) at the banks in order to commit extensive fraud by manipulating loan application forms. This is the “six degrees of separation” Denise Brailey has uncovered. Consequently, the only determinant that prevents the banks from lending more credit is debtors’ ability to finance repayments out of current income. Only when it becomes difficult to finance repayments will the housing and land markets finally capitulate.
It is often claimed “this time is different.” It certainly is, but not for the reasons usually given: Australia has not experienced a land bubble of this magnitude in its history. 70% of adults own property, solvency of the FIRE (finance insurance and real estate) sector is dependent upon ever-increasing capital values and the governments’ addiction to housing-related tax revenue and votes, it is none too surprising bubble deniers have been out in full force, asserting housing prices are based upon fundamental valuations. Also unsurprising is that all bubble deniers have conflicts of interest, and in an age of the secular equivalent of religious fanaticism and greed, facts and history are conveniently dispensed down the memory hole.
The only option left to policymakers is to continually kick the can down the road, hoping the bust does not occur on their watch. The result, as seen with the Rudd government’s additional First Home Owner’s Boost, was precisely that. This intervention restarted the debt machine, re-inflating housing and land prices to a new, higher peak in 2010. The overarching private debt bubble, which began in 1964, will likely come to an end once and for all when the government runs out of fuel to throw on the fire.

…………………………………………………
The “six degrees of separation” talked about in the above article was a submission to a hearing before the Senate Economics References Committee – 8/8/12 – Effects of the global financial crisis on the Australian Banking sector by Ms. Denise Brailey President, Banking and Finance Consumers Support Association.

The six degrees describes the six different layers the bank industry uses to distance themselves from this fraud so that they can deny any liability for breaching the Code of Banking Practice and committing fraud.

“Although the loan contract itself is between the two parties, the borrower and the lender, and article 25 of the Code of Banking Practice says the banker ought to establish if the borrower can afford the loan, the banks contend that the brokers are not their agents”

None of our major big four banks has failed to be named as a participant in this.

The Finance Ombudsman who is employed by the Finance Industry says it’s not his problem but ASIC’s and guess who also hasn’t done anything about it.

The next paragraph is an excerpt from the hearing transcript.
.
Ms Brailey : Yes, thank you, Mr Chairman. The main thing I am going to raise, the first issue, is that the government has bought $14 billion worth of RMBSs since the GFC and I understand has committed another $4 billion to further purchases. The Fitch ratings say that eight to 10 per cent of all these RMBSs(Securities) are low doc and approximately are loans obtained by fraud, and the government is holding tainted securities and profiting from that fraud. We believe there is about $57 billion involved. And, judging by the average loans, which go above FOS's (Finance Ombudsman) jurisdiction—we are talking about maybe 100,000 families affected—a government cannot, or at least cannot be seen to be profiting from that fraud of its constituents and must rectify that situation.
-------------------------------------------------------------------------------------------

So even the Australian government is profiteering in the misery of its own constituents.

These RMBS ([residential mortgage-backed securities) are basically bundled up subprime mortgages being on sold to investors by our banks.
Any student of recent history will remember 2008 in America and the subprime mortgage securities that had a lot to do with triggering the initial crash. Fanny Mae, Freddie Mac and a heap of huge banks too big to fail.

Subprime is alive and well in Australia.

The American people got off lightly as they were able to walk away from their homes and mortgages leaving the banks the mess.

We won’t be anywhere near as fortunate because of our “Recourse Loans” mentioned previously basically giving the banks the right to go after any asset of the mortgagee. Even Granny’s wheelchair.

As of February 2016 the Australian government still owns some of these securities.

This is an article from The Age Newspaper
There's more than one way to kill negative gearing
Date
February 18, 2016

• 
  
  to update your video settings
  Why house prices are so high
  Peter Martin explains how concessional treatment of capital gains tax has driven Australia's housing prices.
• How easy would it be to move against negative gearing?
  Our tolerance of that lie institutionalises dishonesty, and it institutionalises losing.
  Soon after the introduction of the higher education student loan scheme, the Tax Office noticed something odd. Graduates were meant to start repaying their loans when their income climbed above a certain level. But instead, some borrowed to buy investment properties which they rented out at a loss to keep their taxable income below the threshold.
  So government changed the rules. From then on graduates could lose as much as they liked on rental properties, but their income for purpose of determining their HECS repayments became their income before negative gearing rather than after.
  Advertisement
  Government toughened up more than HECS. Quietly, it outlawed negative gearing in the calculation of the Medicare surcharge, the Private Health Insurance Rebate, the Seniors and Pensioners Tax Offset and the Higher Income Superannuation Charge.
  It would be dead easy to do it for the calculation of tax, and it would be consistent. Taxpayers would be able to lose as much as they liked renting out properties. They would even be able to use the losses to offset profits from other investments and carry them forward to offset any profits when they eventually sold. But, as in Britain, Canada, the US, France, Germany, Japan and most of the nations with which we compare ourselves, they wouldn't be able to use real estate losses to cut the taxable income from their salaries.
  What will they do? Prime Minister Malcolm Turnbull and Treasurer Scott Morrison. Photo: Alex Ellinghausen
  At the heart of negative gearing is a lie, or perhaps a mistake. Most spending isn't tax deductible, but spending for the purpose of earning an income is. The lie is that the interest payments and the rates and other expenses involved in renting out a property are for the purpose of earning an income. Somehow there has been a mistake and the rent hasn't covered the costs, but because the intention was to earn an income the costs should be written off against other income.
  Our tolerance of that lie institutionalises dishonesty, and it institutionalises losing.
  Before John Howard halved the headline rate of capital gains tax at the turn of the century, negative gearing was relatively unattractive. Landlords as a group made money. In 1999-2000 they made a combined $219 million. Ever since then they've lost money. In 2012-13 they lost a net $5.4 billion.
  Capital gains matter because they are the mechanism negative gearers use to make money. The profits they make from eventually selling their properties are meant to exceed their annual losses from rent. A cut-rate capital gains tax makes those profits more likely. Investors can write off their annual losses at the full tax rate and pay tax on their eventual profits at only half the rate.
  But there are wider benefits, or so we have been told.
  Howard's tax adviser John Ralph said the cut would "encourage a greater level of investment, particularly in innovative, high-growth companies". Instead, investors dived into real estate. Before the change, houses cost 2½ to three times household disposable income. Afterwards, they cost four times disposable income.
  At the last count one in every seven taxpayers were landlords.
  But they've been increasing the stock of houses, right? Not much lately. Back the 1980s one in every five dollars lent for investor loans was used to build a home. Now it's one in every 35.
  We're told that negative gearers are at least increasing the supply of rental housing, and many believe they are. But by pushing up prices and outbidding would-be owner-occupiers they are also helping create the supply of tenants to rent those properties to. They are often renting to people they have outbid.
  And we are told they are holding down rents. That's impossible to test without restricting negative gearing, as Labor actually did for 2½ years in the mid-1980s. The charts show Melbourne, Brisbane, Adelaide and Darwin rents fell, Canberra rents dived, Hobart and Sydney rents climbed and Perth rents soared. Nationally, there wasn't much in it.
  With little obvious justification for continuing the tax dodge, both sides of politics are planning to wind it back, but gently.
  Labor would allow everyone who is already negatively gearing to continue to gear their existing properties (a concession it didn't extend when it tightened HECS), and it would allow taxpayers to negatively gear new properties so long as they were newly built.
  The Coalition is looking at capping either the number of properties each taxpayer can gear (one of its members, Queenslander Barry O'Sullivan owns 42) or the total loss any one taxpayer can claim.
  Neither measure would do much. But what would is the associated cut in the capital gains tax concession. Labor wants to cut the concession from 50 per cent to 25 per cent, meaning that for assets bought after mid-2017, three-quarters of the eventual capital gain would be taxed rather than half.
  The Coalition is toying with matching Labor's proposal (if has been careful to attack Labor's proposed changes to the negative gearing rules rather than the capital gains concession) or cutting the capital gains discount from 50 to 40 per cent.
  A 40 per cent discount was recommended by the Henry tax review on the proviso that it was extended to income from other forms of saving such as bank interest. It would be a popular measure.
  "A more consistent treatment of household savings would encourage households to seek the best pre-tax return on their savings," the review said at the time. "It would also largely remove the current bias towards negatively geared investment in rental properties and shares and so reduce a major distortion in the rental property market."
  Malcolm Turnbull and Scott Morrison might be considering something as simple as that. They could leave negative gearing more or less alone while suddenly levelling the playing field.
  Peter Martin is economics editor of The Age.
  ………………………………………………………..
  The following is one of the comments this article received. The final sentence regarding “vested/conflict of interest” was a continuation of general agreeance amongst commentators that many politicians who will eventually vote on these taxes share a vested/conflict of interest. If you read the article one of them has 42 properties.
  
  Follow Peter Martin on Facebook

o @Amanda

Non property owners pay the full marginal tax rate on the money they earn and spend on rent.
Property owners are the ones who get the tax loopholes. All that is being proposed is that property owners pay the same tax rate as non property owners.
And I say that as a property owner. I personally feel this should go further and a land tax should be introduced to replace stamp duty.
Landlords and property owners are the vested/conflicted interest in this case. There is no debate.

………………………………………………………………………………………
Conclusions
Just as a rough calculation
50% of Australian households are receiving handouts from the government to varying degrees
14% of taxpayers are landlords perhaps negatively geared but certainly making full use of Capital gains tax discounts.
The real tax rates for Companies are a joke at best.
Leaving perhaps 36% of Australian taxpayers paying for the unsustainable excesses above.
This figure is a bit vague
I haven’t made any allowance for those willing participants in the cash economy.
No allowance for those using debt funded investments in the stock market who are also negatively gearing plus using Capital Gains concessions or those just using the Capital Gains concessions.
Many of the above 50% of households would have two taxpayers
For all the Australians on Struggle Street they need look no further than their elected politicians and the willing participants in the great Australian Rort.
The massive indebtedness of many Australians crushed through finding the mortgage payment each month or the weekly rent.
Another way of looking at it is that over 64% of Australians have refused to pay their fair share of tax and that’s before you get to the company rip off. So much for being civilised.
I’m not suggesting that the vast majority of Australians getting assistance don’t need it just to get by but for many only as a direct result of the choices they’ve made.
I’ve made no reference to Superannuation in this but would say that tax concessions in this category are totally slanted to the well off as they are able to put more money into it. Getting a concessional rate of 15% for up to $30000 a year is a way better deal than most Australian battlers who can’t co contribute. We won’t go into Self-Managed Super funds as their tax concessions are ridiculous when the holder retires. Any income these funds make is tax free.
The sum of tax concessions for superannuation predominantly to the well off now exceeds what we pay our aged pensioners. Going totally from my own memory there are over a million SMSF and the average holding exceeds a million dollars. How civilised we are subsidising the well-off while our pensioners live in the cold and dark because they can’t afford the electricity bill. A pensioner makes a couple of thousand on the side they get their pension cut while the SMSF holders pay nothing for huge amounts of income.
It’s no wonder the Australian economy is sick when our biggest bank CBA from memory has 70% of its loan book in mortgages. That’s a bit out dated and is probably even more now.
This money produces nothing and from the investor’s point of view has massive tax savings.
There’s the old saying that if you give the government a dollar they’ll spend it but if you give private enterprise a dollar they’ll turn it into two. That’s probably not the case anymore as so much is being funnelled into non- productive investment.
My article borrowed from Wikipedia above missed another cause peculiar to Australia for our massive property bubble.
Foreign Investment.
Property values are so enormous today this type of investment was needed to keep the bubble alive and to fill the vacuum left by ordinary Australians being unable to own their own piece of the Australian dream.
Simple economics say that the longer we can keep every dollar circulating in our economy the better off we all are. I pay the butcher the dollar I owe him so that he can pay his newsagent who can then pay his employee who can then pay their hairdresser etc etc.
Foreign investment in property isn’t actually producing anything as they’re only paying some speculator who will probably only reinvest in more speculation and so it goes on. No one’s producing anything.
The real downside is that the profit from that invested dollar disappears overseas never to be seen again.
An addition to this essay. 2-4-16
“I have come to realize very recently that these foreign investors are as reported in the Courier Mail I think on the 27th March using the negative gearing and capital gains rorts. I am totally flabbergasted and find this completely unbelievable. The politicians of this country have made new car salesmen look like angels. Pitiful, disgusting”
Getting off track the very same applies to the purchase of submarines for our navy.
It wouldn’t matter how inefficient our ship building industry is because at least the dollar would still be in our economy. Sure you’re insisting they’ll be built here by some foreign entity but that will only mean a few jobs which is a lousy return for what’s being spent.
If the government stays true to form all of these boats will be totally outdated the second they’re handed over so we’ll have to spend more billions getting them current.
Wouldn’t it be better to make a condition of these contracts that these boats be built from totally home grown materials and firms. We don’t have the expertise at present but when that sort of money is being splashed about you can be certain we’ll develop it.
This is a huge investment in our Navy and could easily be a huge investment in our economy. Good for the Navy and Australia.
The same applies to the purchase of aircraft for our defence forces. We don’t have an aviation industry. Is that because we are too dumb to be able to build planes or is it because our governments are too dumb to invest in Australia.
We have elections this year for all 3 levels of government with the 1st in Queensland next weekend for local government.
The calibre of our Politicians is pitiful and I’d suggest everyone bombard the candidates with what they are going to do to fix their part in this mess. All I hear is about building playgrounds, a park and fixing a pot holed road.
As some further encouragement to have a say one need only look on the internet at the predictions for the Australian Economy in the future. The numbers of articles on our indebtedness and property bubble are growing daily with a major correction (DEPRESSION) in the near future forecast by seemingly more and more people who just might know what they’re talking about.
At least we’ll have a new park to live in if that happens.
If the 64% feel that this is all a bit rough or ******** then they should see it from the point of view of one of the 36% especially when someone suggests I should pay more.
Negative Gearing and Capital Gains tax concessions should be abolished. Tax concessions on super should be balanced or preferably abolished. All this money tied up in the Stock Market, Property and Superannuation produce nothing with the later predominantly invested in the first two or cash which is then lent back into the first two by the banks.
Exactly how this could be done without collapsing our house of cards is anyone’s guess but business as usual isn’t a choice. For any politician to say that these drastic changes wouldn’t be fair to those currently using these schemes is an insult to all that are subsidising them because that isn’t fair. And that’s been happening back to about 2000. Time to get a new job as they are first and foremost elected to represent the people and not a select few.

[a64pilot]

Originally Posted by daletournier

A fellow sailor said to me recently" my neighbours buy new cars, they cant afford old ones, the old ones requires they have cash the new car is on finance" maybe some truth in that with boats?

When I was in the Army, I saw that exact thing.
You see you could buy a new house with a VA loan and $1 move in, but you could not buy a “used” house for $1 move in.
So you would see at Military bases several “used” houses on the same street as new ones were being built, but they went unsold even though they were selling for tens of thousands of dollars less, case the average Soldier didn’t have the cash on hand, the new ones were snapped up before they were finished.
It’s one thing that told me that the housing market was going to crash, and in fact I think it’s being artificially inflated again.

[john61ct]

Originally Posted by Tbonem17

[B][FONT=Calibri]This is from an Australian perspective but would apply the world over.

Way too long mate, and no 99% of that not relevant to me anyway.

Just your regulated award wage levels and social safety net means even your poorest citizens are better off, more financially secure over their lifetime, than 85% of Americans.

And from a macro POV, no recessions in 25 years, those hapless bureaucrats are doing **something** right!

[daletournier]

Originally Posted by john61ct

Way too long mate, and no 99% of that not relevant to me anyway.

Just your regulated award wage levels and social safety net means even your poorest citizens are better off, more financially secure over their lifetime, than 85% of Americans.

And from a macro POV, no recessions in 25 years, those hapless bureaucrats are doing **something** right!

Not sure their doing that greater job John. "Holes and houses" being the world's biggest quarry has saved our ass. We got through 2008 unscaved due to China's unprecedented purchasing of resources, a economic stimulus on steroids. Protected by georgraphy, nothing more.

Australia currently has the third highest level of private debt per capita in the world, Switzerland first and i think Norway second? The IMF and BIS have both recently written reports warning us of this potential problem.

The three pillars of our economy are banking, property and mining, all three are heavily interwined, this is a serious issue. I havent looked at the commonwealth banks balance sheet for several years, they were highly exposed if house prices declined significantly.
We live in a world that requires continuous growth, Australia seems to think our housing market is different, ask Spain, Ireland and the US what they thought prior to their crashes.

Just started reading a book by Robert Stiller "Irrational Exuberance" this certainly reflects Australian housing market.

[chris95040]

Originally Posted by rwidman

The "middle class" no longer has disposable income. They have been taxed to provide free housing, food and cell phones for those who choose not to work. Let's hope this changes soon.

It boggles my mind when I see this kind of thing. Right, it's those people living with cockroaches and ketchup pasta that are bankrupting us.

[daletournier]

Originally Posted by chris95040

It boggles my mind when I see this kind of thing. Right, it's those people living with cockroaches and ketchup pasta that are bankrupting us.

Not really , there are many reasons, BUT it is big part of the problem. The western world has a huge entitlement funding problem. The below is a statement from the Australian treasurer.

http://www.news.com.au/finance/econo...a83afdfc10b750

Alan Greespan has also publically stated that the unfunded entitlement problem is such that he hasn't seen anything like it in his 91 years ( or something to that effect). This is a man that run the US Federal reserve for several decades.

No escaping fundamentals regardless of the stories we make up.

[cpt_757]

Originally Posted by a64pilot

It’s one thing that told me that the housing market was going to crash, and in fact I think it’s being artificially inflated again.

Absolutely!!! Correct!!!

[Tbonem17]

Originally Posted by daletournier

Not really , there are many reasons, BUT it is big part of the problem. The western world has a huge entitlement funding problem. The below is a statement from the Australian treasurer.

Federal Budget 2017: Welfare accounts for 86 per cent of all personal income tax

Alan Greespan has also publically stated that the unfunded entitlement problem is such that he hasn't seen anything like it in his 91 years ( or something to that effect). This is a man that run the US Federal reserve for several decades.

No escaping fundamentals regardless of the stories we make up.

Someone said my article was too long but it was obviously not long enough because the sense that the welfare state is still considered the sole bane of our existence is unshaken.
This obviously middle class Australian from the "lucky country" too rich to receive welfare but too poor to play with the rich is giving up by selling out and buying a boat. One less "patsy" in the world on my way to where ever the bow's pointing.