its warranty expiring, or the windscreen wiper that is no loner easily
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replaceable at your local service station or supermarket for a few dollars.
Windscreen wipers used to be made to fit just about any car on the road,
but not now. In its place we must now purchase a specific wiper that is
exclusive to your particular vehicle at an inflated cost. You are forced to
pay the ridiculous cost because they are the only ones that will fit and
you don’t have a choice. The marketers have “Gotcha!”
In addition, the parts and accessories of most consumer products are
now sold separately, so that you just keep paying more and more.
This is another place where your income is being eroded.
So when does it stop?
I suggest it stops right now!
Success isn’t about money or ‘toys’, it’s about seeing others happy
from what we’re doing.
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The me generation
This is the generation that might be referred to as the ‘Dotcom
Generation’ otherwise known as ‘Generation Y’. With an understanding
of a world that progresses at an amazing rate, their minds seem to
quicken in response to whatever technological advancement is thrown at
them. Unlike past generations, whereby newness and innovativeness is
viewed with caution and hesitancy and usually get adopted gradually
over time, the Dotcom generation embraces technological progression
with an incredible ability to adapt almost immediately. Nothing seems to
be too complex for them to grasp and when it is a challenge they work at
mastering it with a determination unlike we from the previous world
have seen before. Are they are a super breed?
Watch as they work a computer at lightning speed no matter what
new program is installed. What about the manipulation of a mobile/cell
phone that has every fan-dangled gizmo attached and requires the
dexterity of a gymnast? How fast are their brains working and how
quickly can their fingers move? Surely finger arthritis will be an
epidemic in a few short years if not already?
Even when you ask this mighty super breed how you too could
perform certain technological tasks, they will happily demonstrate it, but
generally in such a way (and in a language that is completely foreign),
that you get so bamboozled and lost in the reflex movements you feel as
though you’re a complete misfit! They on the other hand know you are.
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Are we, the older but supposedly wiser generations, getting
completely out-gunned by this younger savvy breed of humans?
This is the generation born between mid-1976 and mid-1991 - a team
of people who I believe are going to make an incredible impact on this
world simply due to their ability to manoeuvre their minds into places
we of the past have never achieved.
So what does this mean when it comes to home ownership?
Unfortunately, there is a downside to this generation’s abilities and it
is one that the older generations are beginning to recognise now.
With the extraordinary onset of computer technology a deficit has
occurred in the way this generation relates to the world. In some ways it
is almost as if they have lost some of the common sense skills that
involve practical survival. A superficial, artificial and some would say
shallow world has developed over the past twenty years and this
generation has grown with it.
In addition, consumerism has taken hold of their everyday lives with
such ferocity that this generation is programmed into knowing little else.
This is not a condemnation of generation Y as they are only a product
of what they have been exposed to, likewise there are generation gaps
that have existed since time immemorial. However, the difference with
this particular generation’s cause for concern is not so much the type of
music they listen to, the outrageous apparel they might like to wear or
the social movements they would like to influence. No, this is more
about awareness of the world’s basic human needs. The basic survival
skills needed in each and every one of us that only comes from
experience, resilience and patience has become non-existent to many of
these new generation’s lives.
For example, much of this generation’s understanding of supporting
oneself involves the need to accommodate a good mobile phone system,
MP3 player, have immediate access to the internet at a speedy rate, to
purchase anything online via a card of some description and the ability
to purchase items of want not necessarily need.
So entrenched have they become in consumer spending that
amazingly a young person’s expendable income is consistently ferreted
out almost subconsciously as if there is an expectation that it just has to
go in order to support a lifestyle rather than one’s own life!
Somewhere along the way, we, the older generation, have allowed
this to happen. Did it happen so quickly that we failed to recognise the
possible outcome? Probably, because the speed by which we have
advanced in the past twenty years has been so incredibly rapid that the
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older generation was so busy trying to adapt and keep up they didn’t
have the opportunity, much less foresight, to see the potential problems
that could result.
All the same, it was during that time that a large number of powerful
proficiencies developed and ground-breaking skills emerged which were
consistently cultivated in our children. While their dexterity and
interaction with high-teach equipment has become ever more
progressive and time-consuming, the intensification and escalation rate
by which this has occurred has encroached on some of the more basic of
life’s skills.
One, I believe, is the discipline of saving!
In the wake of all this progressiveness, some of the fundamentals of
life regarding saving, sustainability and waiting until the time is right
have all but gone out the window, replaced by a ‘must have now’, ‘at all
costs’ and ‘only the very best will do’ mentality. All items are
disposable, easily replaceable and hold as much value at the time as the
‘want’ required it until another more efficient, superseded model comes
along… usually within weeks.
Our value system has altered so severely that working (sometimes
more than one job), planning, sacrificing and saving for months (even
years) in order to get the item of value we so fervently desired, seems to
have collapsed into non-existence.
Meanwhile, the pressure of expectations has accompanied this
mindset. Once upon a time, not very long ago, stable employment or a
career or a good education or having a home or a loving, supportive
family… all meant success, but now the world insists that to be
successful you must have more of the material things, including the best
car, a corporate income, and a look that befits the perfect model.
The pressure must be enormous for this generation.
Nowadays, no one seems prepared to wait for the next step, preferring
to go to the next level r
egardless of the financial and often personal cost.
This is a generation that seems totally focused on themselves, their
needs, their wants and their lives, so much so that their own generation
identification name is sometimes called the ‘Me Generation’ because it’s
all about them!
So what happens when they are subjected to a recession or a
depression or a war? What happens when the expendable income is
terminated, when the wants are no longer accessible and the needs
require urgent attention?
What resilience have they developed and have in place to deal with
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adversity?
It is a worrying thought for the older generation, mainly because they
are the ones who have catered to their children’s wants often in response
to their own struggles.
“We haven’t wanted our own kids to go without like we did.”
“What have we worked for if not to give our children an easier life?”
Our prosperity, hard work and sacrifice have put us in a position
whereby we can give many of our children of the western world a
privileged life, one that has pandered to their every need and want. But
what price will there be for so much indulgence?
The jury is still out on this one because for all the advancement we
have made in our civilised world, the core elements in human survival
skills may be dwindling away.
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Disadvantaged doesn't have to
mean Dispiriting
For a great many people the concept of ever owning their own home
is as unrealistic a goal as it is unfamiliar to them. Not surprisingly, the
idea might seem even more outlandish if a person has come from a
background of foster care, transient housing, welfare dependency and/or
homelessness. In these instances the response would be expected and
understandable. After all, never having known what it is to be in a place
of a permanent nature, having a home that is always there to come back
to would appear alien and totally out of reach, wouldn’t it?
I believe that while these are the people who require major support,
they also need to keep hope alive in order to succeed. This is intrinsic to
the whole approach to getting anything in life. If there is enough hope,
desire and determination then there is always a chance. Conversely,
societal prejudices, unsupported goals and a constant barrage of media
negativity, can only serve to undermine those hopes until the
determination becomes eroded.
It is this erosion of hope that is of the most concerning particularly,
when people the world over are experiencing a bombardment of
negativity by the media of the possibility of never owning their own
home, with diminishing affordabilty being the prime reason.
Many people often find themselves in circumstances which they
believe are beyond their control. This may be as a result of becoming a
care provider to a loved one and so consequently being reliant on a
pension or not having the ability to source a more substantial income due
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to illness, disability or education. The reasons may be varied and there
are numerous other possibilities why people must watch every cent
daily. But… that does not mean that getting into your own home is
hopeless.
For many people the biggest obstacle is the drive that will get them
over the first hump…
Any motivational speaker will tell you anything is possible if you
visualise what it is you really want. By seeing yourself in your new
environment, feeling the feelings associated with achieving that goal and
putting your mind in a positive empowered state, you are much more
likely to get what you really want.
This thought process is known as ‘creative visualisation’, and is one
that plays a commanding role in getting you to where you really want to
go. Without it, you’re already going against the tide and more likely to
be unsuccessful, because you have already impaired the goal with your
less than ‘driven’ mindset.
People who are driven will work to overcome the barriers because
they want to get to the place where they have visualised. They will find
the means no matter what!
They are not only determined but they are focused, focused, focused
and positive, positive, positive!
People are are creative visualisation think of their dream as a
‘happening’. They don’t misuse their thought processes with ‘maybe one
day it will happen’.
This is an affirmative action that is specific, absolute and with
conviction. With no visualisation too much time can be spent wishing,
hoping and waiting for something to happen.
At the risk of repeating myself… you’ve got to make it happen!
Since writing my last book, I have been fortunate enough to receive a
great many emails and letters from people who are in situation not unlike
those described here, who have bitten the bullet to follow their dream. It
may have taken an extra job from home, cashing in some superannuation
if they are old enough, borrowing a small amount from a relative or just
plain old saved, saved, saved!
Financial assistance you may not know about
In the Australian State of Victoria, the first home owner receives an
extra payment in addition to the federal First Home Owners Grant. This
includes a $5,000 extra payment for a new dwelling and $3,000 more for
an existing dwelling.
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New Zealand ‘home equity’ program
This is an idea that was well used in Australia in the 1970s, which
allows a person to move into a new home without a deposit for a period
of five years with an option to purchase at any time during that five
years. Basically, the weekly payments are much the same as that of rent
but are set for the next five years without large increases. The maximum
amount the rent can go up is 2% per annum. The idea is to provide a
security of tenure which gives the tenant and/or potential home owner a
sense of ownership. This is achieved by the person gaining having the
ability to establish the house into a home with a garden, personal touches
and the feel of belonging in a community.
When the time comes the occupant can buy the property at 75% less
than the growth in market value. Confused? Well, I will try to make it a
little easier to understand.
This concept is a very promising way for people to get into the
market while accruing equity without every having put down a deposit.
Example: If during the time of occupancy, say 4 years, the property
was valued at $50,000 more than it was when the occupant moved into
the building and the occupant wanted to buy it, then the occupant would
get $37,500 of that value. Not in cash, of course, but in equity against
the house. So if they managed to save $10,000 plus the equity of
$37,500 they would have $47,500 as deposit, wouldn’t they?
Now, the property may not go up that much, but what needs to be
recognised here is that bank valuations generally value lower than the
actual cost of the property in order
to cover their own interests, so when
the property is first valued before commencement of occupancy, you’re
likley to have already accrued equity from the day you move in.
Who can get into this home equity program?
1. You have to be a first home owner - YIPPEE!
2. You need to have a regular combined income of as least $55,000
per annum.
3. You must have a good payment record (and that doesn’t
necessarily mean rating), it means a record of making payments
regularly, on time and without hassle. In other words, if you have
a number of credit cards that you use in order to pay for each
other, like taking from Peter to pay Paul… then that’s not a good
credit record! Whereas paying your rent, keeping up with your
financial commitments and not taking on more is a good credit
record.
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The main benefit of this program is you have the right to buy the
property at any time during the five years, allowing the time needed to
save while still enjoying the security of a home.
Is there a program like this in Australia?
I’m glad you asked.
As mentioned previously, a scheme similar to this one did in fact
exist for many years in Australia and it looks very likely to be coming
back. In South Australia a rent-to-buy scheme is one of the strategies
being proposed in a new package for State housing reform.
‘Under the new housing plan, affordable homes built in the new
housing developments would be offered exclusively to low and
moderate income earners for 90 days.’ (www.news.com.au/adelaidenow)
South Australia also has a government organisation called Homestart
which can assist low income earners and welfare recipients with a loan.
The shift in home ownership is an issue which has sparked great
debate in the political arena, pushing the matter to the forefront.
The option of a rent-to-buy program is one that is being given a good
deal of consideration by all states.
Keystart Home Ownership Options
This is a program available to Western Australians through the
Department of Housing and Works. If you haven’t already done so, it
might be worth checking out.
Why you need to know about inflation when it comes to
getting a house
Goodbye Renting Page 19