one last post before i limit myself
debt i dont understand it .
Dad allways said if you haven't got the money dont buy it.
i have 1 house i intend to pay that of before i get another loan to buy more.
no one will ever be able to take my house away from me .
i never liked taking out loans i never had a credit card and have allways paid cash saving for what ever i have bought.
Im not sure how people on my wage (high income) can take out collossal loans for e.g for rental properties etc and neglect to pay of there own house.
i understand that peope who rent should purchase/build a house.
Mabe before the boom when primary interest was lower than the annual house prices increase it was a good idea?Have any of these people ever seen a proper cyclonic recession ?
Is the answer "encouraging" excessive borrowed spending to regain an economic slump?
Will this result in another cycle?
If debt is used to buy an asset that rises in value or generates income in excess of the cost of servicing the debt then whats the problem?
If debt is used to buy goods and services that do not increase income or assets then you can get problems.
However as long as you can continue to service the debt through other income, having debt is not a real problem. Its only when you are unable to service the debt through increased debt charges or reduced income then its a problem. If you used the debt to buy an asset that increased in value over time then you could sell the asset and pay off your debt.
The way I see it the tax system encourages us to have debt and discourages us save money. We are taxed on any income generated from savings. We receive compensation for debt costs if that debt is used to buy an asset that generates income.
Cycles always happen and there really isn't much we can do about it. Just get worried when all the 'smart' people tell us we have broken the economic cycle and reached a new paradigm.
about to sell a property i was in debt for. will be ahead by a fair bit when its sold. bad debt is a boat. good debt is a good investment.
T'is simple -- it is a mind set.
The biggest mind setter = Aussie tax system.
I suppose the intention was to encourage people to invest in solid income generating assets.. Great for a large under invested country..
But human nature being what it is instead of solid asset it has proliferated into all things like a weed - (but let's not start on Credit cards and the legally allowable interest rates!!!).
That tax system could be looked upon as an investment system - to get it to work for you to the max you need to go into debt . you can deduct, you can shelter, you can gear negatively and then comes the phantom GST expense and on it goes... This investment process peaks for those who earn enough to not have to live hand to mouth.... of course the creative(!!!) middle man dines well. Schemes being a 'dime a dozen'.
I belive in setting the standard / the bar at a certain height with certain expectations and if you think the incentives to live upto this standard are sufficient then you go for it.
Take first home owner grants - turn this around - you build/buy your first house and stay in it then get a tax break. On going.
You want your house insulated - here are the guidelines (your primary residence, type of products, range of prices, minimum standards) - here is the rebate - go get a quote / install - etc.
Here is a hot potato - If a charge is laid and proven which uses up community assets then the perpetrator should be billed - a Debt designed to discourage.
For example Simon on the piss with mates decides his last shot of Jim's Bean made him 'Hercules' and assualts Deano - well he might get off with a good behaviour bond but the cost of hospital services to Deano added up to $1750.00 and the auto court handling fee of $850.00 are handed down to Simon with a Year deadline - to pay no exceptions.
Back to the hand to mouth - 
I agree with good debt and have blown a lot of coin on cars over the years,whenever a new model came out I just had to have it 
One wise man once told me,if your not in debt your not going anywhere boy. I guess he was referring to good debt.
I now drive an oldish car,so I think I've seen the light. Dam I really want a new one.
The only way to come out ahead is to DIE IN DEBT. That way you get to spend more money than you ever earned !!!
Richiefish said.....the only way to come out ahead is to die in debt.
Christopher Skase certainly came out ahead.
Bondy knows a bit about debt to
Option 1;
You have $10,000 you put it in a long term deposit and get 5% per annum whoopee, you are making $500 a year.
Option 2; You have $10,000. You make a 10% deposit on an interest only loan and turn that into $100,000. You buy a new townhouse with a 5% rent return and full depreciation report. Rent is $80 per week, tax savings are $20 a week and interest on the loan is $100 a week. Your cutting it even. You hold the property for 10 years and it doubles in value. Whoopee, you are making $10,000 a year in equity which can become a tax free line of credit whenever you like.
I know which one I would prefer...
This is very simplified, strata fees, land taxes, rent increases, interest rates, insurance etc etc all come into it, but it all comes out in the wash in the end.
It's a slow day in a little east Australian town. The sun is beating down and the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich tourist from down south is driving through town. He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend thenight.
As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
The hooker rushes to the hotel and pays off her room bill to the hotel owner with the $100 .
The hotel proprietor then places the $100 back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything.
However, the whole town is now out of debt and now looks to the future with a lot more optimism.
And that, ladies and gentlemen, is how the Australian Government is conducting business today..
forgot about 2 things tight !!!
The butcher takes (-his 10 percent gst + bank TAX )97$ and runs down the street to repay his debt
The pig farmer takes the 97$ and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmer's Co-op takes the 94$(after gst=bankfees) and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
mabe if i saved 10000 i could buy shares in a bank.
Mabe the goverment should purchace banks that might fix our national debt
So there is NO incentive to pay of anything ? or save nowdays?
Funny enough the SYSTEM seems to be working
Good views on this thread. Glad i run on this thread.. Got a lot of views and Ideas..Thank you so much guys.
i was generally targeting first home buyers on this thread.
i f there is no more you can develop/add value on property purchase another....
develop another. these people are correct.
There is no slums or poor people in australia!!!!
business is specifically different
our kid may suffer...........
but with a generation of accumulated assets they will never be starving!!!!
make the sacrifices today to bring a better future for tomorrow.
I dont really think we Aussies have any dept [}:)]
The greeks have all the dept....
isnt that where we sent Amanda Vanstone 
Had the financial planner over yesterday and when he saw that my debt was so small 85k in his words
He said just pay the interest put the rest in your pocket
so i will never pay it off
Well that depends on the MAGS on that pannal van, if it got the original JELLY BEAN MAGS your look aprox ANOTHER 1600 to 2000 G mags only
more than enough storage spots, more than enough power (EFI 5.0ltr), more than enough fun to be had running from the cops and as for profit...there is never enough.
I have always considered myself to be open minded but not necessarily well informed.
Thanks a stack for that Flysurfer. Watched the lot and missed the Waratahs Reds game into the bargain but am a hell of a lot better off for it.
I am an atheist but have always had a lol of admiration for Jesus actions in flaying the money lenders out of the temple!
