Investors keep first-timers out of market

"Herd mentality is the fastest way to lose money in property..

This is a fascinating concept to me. The 'herd mentality' is an inbuilt primer within our psychy which goes back to the animal kingdom. There is 'safety in numbers' hence running with the herd.

And yet when it comes to investing its effect can be devastating.

There has been lots of academic research on this topic, linking it to investment performance
 
For the last 5000 years, the younger generation has always sought change.
Always has always will.

This is in accordance with the rules of mother nature.

However the younger generation as 'lazy', having no respect, and wasting money, has only been a product of the last 70 odd years. (within the latest long term cycle, we actually have been here before in times many years past)

The great depression did wonders for restoring the natural balance.

It will be interesting to see how the current state of global affairs play out over the next 10 odd years.

Personally I think there is another phase of 'natural balance' occurring, human beings being what they are are trying desperately to prevent it, however their attempts to prevent it are actually making the problem worse, when it comes the magnitude will be greater because of that human interference.

The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.

The above was written in 400BC and mirrors exactly what you are saying.

It is nothing new. You are just getting older so the younger generations are worse than when you were one of them.
 
The above was written in 400BC and mirrors exactly what you are saying.

It is nothing new. You are just getting older so the younger generations are worse than when you were one of them.

They certainly wear their pants much lower.

Bring back belts on shorts and socks to the knees
 
They certainly wear their pants much lower.

The media is behind pushing that too - son was approached by 'The Advertiser' and asked if he would pull down his pants slightly for a photo for an article on how youth wear their pants nowadays.

His 3 mates had no objections and had dozens of people comment critically at their {fake} very low pant style {obviously the journo couldn't find ANYONE wearing low pants} :rolleyes:.

Friend who worked at the same newspaper told me lots of similar stuff ie. people interviewed about something and all give positive feedback yet headlines read "Adelaide slams *********".

Half these stories like this Potts Point one are a beat up because they know people will feed into it. It's rubbish journalism and it surprises me that people take is as credible reporting {not saying it's a subject that shouldn't be discussed however - just that the reporting is designed to mislead on a few points}.
 
This is a fascinating concept to me. The 'herd mentality' is an inbuilt primer within our psychy which goes back to the animal kingdom. There is 'safety in numbers' hence running with the herd.

And yet when it comes to investing its effect can be devastating.

There has been lots of academic research on this topic, linking it to investment performance

yes agree, im not sure whether its the safety in numbers aspect, or the if I go down, at least someone else will be going down with me, or the what will everyone think of me if I do something different and fail,

as true top investors, I wouldnt be buying in syd for example, as I think you are battling against emotional First home buyers, or amaetur investors or other amateurs,

I see properties that need $50k worth of work for example sell for $30k less then what a non renovated property sells for and think, surely this must end in tears or "oh that didnt work too great" when they find their new renovated property cost them $20k more then the renovated one for sale.

However, time heals many wounds in property
 
Following on on the average concept, if you buy 50km from CBD, where FHB can afford, it is likely that they will still live in the same suburb in 20 year as their house will increase by an average of x% which will be outpaced by a property in a more fashionable suburb which will increase by more, ie never been able to sell and move somewhere else. So unless you have the mindset to do something better than average with your money (ie buying first home in a suburb which will increase much more than the suburb you want to live in) i can understand why the younger generation whinge about the situation.... Which was likely the same 20 years ago.
Taking $300k home in suburb A you buy in today, because you can not offer more. You still want to live in the $500k home, in suburb B. How many year and Property growth those 2 suburbs will have to change to be able to move? Say suburb B achieve 3%, if you want to move in 5 years, suburb A will have to perform at 12% to give enough buying power. Pretty much scary. You can also wait 10y and only need 7% (still seems very high).


From what i have read in this thread from BB, they have only been able to increase their lifestyle by investing.
 
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You're over thinking things.

They have been able to increase their lifestyle because as they get older, they move up in their careers, make more money and have more savings. Same thing happens to everyone. In 6 years my income has increased 5 to 6 fold which means I can now afford more. Not only can I buy property B in your example now, I can buy property C and D and E.

Of course, some never get promoted/move on in their careers and are stuck at the Good Guys selling dishwashers. And that's why they don't upgrade their house.
 
You're over thinking things.

They have been able to increase their lifestyle because as they get older, they move up in their careers, make more money and have more savings. Same thing happens to everyone. In 6 years my income has increased 5 to 6 fold which means I can now afford more. Not only can I buy property B in your example now, I can buy property C and D and E.

Of course, some never get promoted/move on in their careers and are stuck at the Good Guys selling dishwashers. And that's why they don't upgrade their house.

Good guys would be a major promotion for some

Its usually the ones that are a check out chick or bloke their whole life are the ones who complain the most about homes being too expensive or why they don't get the same pay as a lawyer or how they should have got the 50k promotion while they were on maternity leave
 
This is a fascinating concept to me. The 'herd mentality' is an inbuilt primer within our psychy which goes back to the animal kingdom. There is 'safety in numbers' hence running with the herd.

And yet when it comes to investing its effect can be devastating.

There has been lots of academic research on this topic, linking it to investment performance

I'd love to see some of the papers on this. Thanks for making me aware of the research.
 
You're over thinking things.

They have been able to increase their lifestyle because as they get older, they move up in their careers, make more money and have more savings. Same thing happens to everyone. In 6 years my income has increased 5 to 6 fold which means I can now afford more. Not only can I buy property B in your example now, I can buy property C and D and E.

Of course, some never get promoted/move on in their careers and are stuck at the Good Guys selling dishwashers. And that's why they don't upgrade their house.

This is exactly my point. If your income has increases 5 to 6 fold, you are definitely not on the "average". In my quick calculation, i took a 3% average income increase. Even if i plug 5% increase, we will be far from buying a dream house without big gap between the 2 suburbs. Although, we were talking about PPOR in the paper, doubt you have move 4 times in 6 years :)

I think it is not some but the majority that is not moving up in the career ladder as quick as you do it, and most will not double their salary in say 10 years.
 
Every time I hear about how life used to be much harder, I'm made to think of the Four Yorkshiremen Sketch. :D

Unless you're seeing pay rises like Deltaberry (who I'm guessing is in investment banking from previous posts, and thus started on an above median income), wage growth has been around 3% to 4%, whereas the expectation seems to be of houses increasing at a multiple of that. Over a decade or two that's going to squeeze affordability.

There's another article in the SMH today which puts investors being responsible for 40% to 45% of all mortgage borrowing. If they're targeting the same properties as FHBs then it's not surprising that group is being squeezed.

As for Australia's population density, you could squeeze everyone into Tasmania with a fewer people per square kilometre than Japan, and well below some parts of Europe.
 
As for Australia's population density, you could squeeze everyone into Tasmania with a fewer people per square kilometre than Japan, and well below some parts of Europe.

Would make it hard to know who's who's on Fathers day in Tasmania..,if that ever happened..
 
As for Australia's population density, you could squeeze everyone into Tasmania with a fewer people per square kilometre than Japan, and well below some parts of Europe.
Gee, that'd be cool.

So, if all of Japan jumped off a cliff, should we do the same?

I do like the knee high socks and pleated skirts look, though - if this was a prerequisite.
 
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