IP investors: "Children of Parents raised in the Depression"

I read recently that residential property investment is dominated by the first generation to be middleclass, ie of working class parents. Those who's parents where the children of depression and war-time, but who's children could attend university or become skilled labor and thus able to become the middleclass (knowledge workers). These middleclass children of working class parents ie the 30-45 year olds are the core of property investors.

In my case the shoe-fits, is there something special about being a child of parents born in the depression?
 
Always

My parents were born 1911 and 1913. They survived both World Wars and the Great Depression.

People lived thriftily. They aspired to their children doing better, particularly through education.

We grew up collecting rubber bands, recycling plastic bags and handing down clothing.

We learnt to save money, and to save for things we wanted. We all had jobs while at school and paid our own way.

People did without to buy and pay for their houses. Cars were run for at least ten years. Consumerism was limited to good quality food, dental care and the occasional two weeks at Sorrento living in a tent.

However, although many of this generation have bought properties other than the family home, from my observations this is still traditionally limited to one other and that other is more likely to be a 'beach house' than a bought-for-the-purpose investment property.

Intentional investors, from any generation, are still in the tiny minority and it is likely to stay that way.

Regards

Kristine
 
Originally posted by Kristine..
We grew up collecting rubber bands, recycling plastic bags and handing down clothing.

We learnt to save money, and to save for things we wanted. We all had jobs while at school and paid our own way.

People did without to buy and pay for their houses. Cars were run for at least ten years. Consumerism was limited to good quality food, dental care and the occasional two weeks at Sorrento living in a tent.

Intentional investors, from any generation, are still in the tiny minority and it is likely to stay that way.

Well in MY day.... ;)

Give it another 20 years and most of the depression children will have passed on.....the babyboomers will be out of the seats of power, Gen X will be fleeing to fairer climes (where they don't need to support so many retirees) & Gen Y will be exercising it's muscles at the top of the power tree......

There will be some major changes in social thought - look at the 1930-1950 transition as an example...scarcity to wealth & the resulting growth of the middle class and freedom of the 60s.

I can see some dramatic changes in the way people invest, with less emphasis on quantity & more on quality....for example, fractional ownership of income producing assets (anyone want a share in an asteroid mining operation?).

However I do expect that the people who are ACTIVE in their investments & CONTROL the assets will remain the wealthiest minority....particularly as resources required for a global industrial civilisation become scarcer.....

Cheers,

Aceyducey

PS: Kristine, we still collect rubber bands (never have enough of them!), recycle plastics (and paper & everything else we can) & pass hand-me-downs through our kids & rellies (clothes & toys)...our car is over 10 years old, our major holiday each year (while the kids are too young to appreciate the o/s trips) involves camping and our cash is closely managed - not that much has changed really :)
 
I'm probably the generation after the one you talk about, but I know that both of my parents were quite averse to borrowing, and definately against investing in the share market after having seen alot of the wealth of their parents wiped out during the depression.

Investing was seen as a good way to loose money for them. My father has broadened his vision a bit having bought a few IP's (more out of necessity after the divorce with my mother than anything else). My mother, sadly, has much of her wealth tied up in their family home with no real source of passive income.
 
hi all.

I tend to agree with the theory, although I would push the age up 50.
And Kristine, I loved your description and can relate to it well.

My dear old mum and dad, 84 & 81, were saving the plastic wrapping the newspaper was coming in, not to be recycled, but to use!. Why - I don' know - they just couldn't bring themselves to throw it out.

GarryK
 
That's me?!?!?!

Spooky, I fit the mould exactly.

Age 37. Parents all 73. Grew up poor and don't trust shares. Property is real and can't be taken away. Myself now middle class and coming to grips with it. Sometimes splurge but with guilt.

The something special is "I (we IP types) knew very early to trust no-one to provide for us and hence we collect property for that rainy day"

My two cents, Peter
 
Originally posted by Garry K
My dear old mum and dad, 84 & 81, were saving the plastic wrapping the newspaper was coming in, not to be recycled, but to use!.

Yes, Garry that is what I meant, not the modern recycling but the keeping and reusing of plastic bags.

In our case, it was the polythene bags which cotton was transported in to the weaving mills. My father brought the bags home from 'work', my mother washed them out, and we used them until they tore and then more were brought home.

We also carefully peeled the sellotape from Christmas & Birthday presents, smoothed the paper out, and rolled it around empty waxed-paper lunchwrap tubes, secured it with one of the saved rubber bands, and reused the wrapping paper as needed.

Prior to plastic toothpaste tubes, we used a sardine tin key to roll up the metal tubes to ensure that all the toothpaste was used, and pressed slivers of the last soap bar onto the new soap bar with the back of a fork.

I'm 53, and I still practice 'Waste Not, Want Not' as a daily habit.

As the Christmas Party heard, I only recently bought new bed linen for the family. Mike & I were sharing a Mary Quant duvet cover (1975) and the youngest (15) was still sleeping under an alphabet duvet set.

And this Christmas, Mike bought some new towels for the children, as the Dickies towels which my sister gave me in 1979 as a housewarming were starting to look a little tattered.

Gosh! They just don't make things like they used to!

Cheers

Kristine
 
Kristine wrote: 'We also carefully peeled the sellotape from Christmas & Birthday presents, smoothed the paper out, and rolled it around empty waxed-paper lunchwrap tubes, secured it with one of the saved rubber bands, and reused the wrapping paper as needed.'

And if you gave bigger presents than you'd recieved, I hope you used newspaper to wrap, as I do. Just make sure the very young don't get the personal columns ; )

I'm better at scrounging and not buying things than recycling what I have. Laziness I guess! But being brought up in a town with a handful of shops and two rubbish tips helped.

The most recent find was a stereo by the street. I blew some cheap speakers by turning it up too loud. But 3 weeks later a pair of speakers was found much better than those blown up.

I've noticed Melbourne is more scroungier than cleaner cities like Canberra and Perth. People here pick newspapers out of bins. You also see them get bread out of the supermarket's bins out the back. Or maybe it's just that I'm in an area where there is a high aged population.

Finally a handy URL which will give hours of reading:
http://frugalliving.about.com/

Regards, Peter
 
Yes, my parents are 79 and 81 and always lived frugally. Dad was a printer by trade and also sold cockles & mussels etc (alive, alive-o) at the pubs in the coal mining valleys (in Wales) at night. Mum was a cleaner and was home for us kids to get off to school and be there in the afternoon for us.

I can remember Mum cutting threadbare sheets up the middle and sewing the outside together leaving the now threadbare sides to be the tuck in bits to give sheets a second life. This may explain why I hate laying on wrinkly sheets and always pull my sheets tight before getting into bed - years of sleeping on a seam! When they finally couldn't be used by us anymore they were ripped into rags, used for dog bedding or used for making dolls clothes. She did the same with towels too.

Clothes were passed down from sister to sister and name brands were unheard of (so was colour co-ordinating judging by some of my childhood photos :rolleyes: ) I can remember Dad coming up behind us and turning the running tap off while we cleaned our teeth (only need it to wet our brushes and rinse our mouth out at the end), and a 2" deep bath was enough to wash yourself in.

I still practice some of these things and more today (except the re-wewing of the sheets and towels). And like Kristine I can remember squeezing every last bit of toothpase out of tubes and squishing the last slivers of soap into the new bars and re-cycling the Christmas paper. I also have some bedding in my linen cupboard that's at least 20 years old too!

Investing was something unheard of in my family and it's something I've had to learn in recent years (and the best and most important bits from here!!).

If the 'younger' people of today can practice the fugal living of the past AND investment knowledge of today - there'll be no stopping them! Goog luck to 'em!

Cheers
Olly
 
What a great topic. I am new to Australia - I came to Sydney just 12 years ago as an adult. Some definitions still look a bit vague for me. For example, "middle class". I am sure it has different mening in every country. How would you define it in Australia?

(After a long break)
Lotana
 
'We also carefully peeled the sellotape from Christmas & Birthday presents, smoothed the paper out, and rolled it around empty waxed-paper lunchwrap tubes, secured it with one of the saved rubber bands, and reused the wrapping paper as needed.'

How to start a huge problem!

a) Marry a Japanese
b) Have a monther who does the above with christmas wrapping.

- Mother scrunges old christmas wrappings
- Give "gift" to my wife and latter grand children in "used" old paper!

In Japan gift giving is important and just as important is the quality of the gift presentations: lots of nice wraping, several layers is better, cute little ribbons, bows etc....AND ABSOLUTELY FRESH AND NEW. A gift wrapped in used paper is in effect a slap in the face ( meaning "I dont value our releationship" ). My wife drones on and on about how she is in effect treated as a second class family member in my mothers eyes. "How can she give a gift in used paper? She went on a round the world world cruise costing thousands, she can easily afford $2 for new paper for her grandchildrens presents, so why doesnt she buy some each year....arrrrr, its is because she thinks I am worthless and her grandchildren not as good a normal blue eyed grandchildren"... my protests about my mother is cheap to everyone regardless dont seem to make a impact.

Anyway good news, this year after many years of me complaining , presents from my mother where given in new paper, nice silver paper and inside new books (my kids love books and reading)! My wife said that this was the best presents ever, lovely books and wrapped well! (Same money, well $2 more for the paper: different style can make a big difference).

For me, because of my childhood in a family where money was short, I HATE HATE HATE worry about making the bills, not being able to go to the movies and having a meal afterwards, no holidays, visiting a supermarket and checking the price of every item.
 
Lotana

The sociological definition of 'middle class' relates more to what parents 'want' for their children rather than what parents 'do for a living'.

In other words, parents who work (perhaps) in factories but place a high value on education for their children and live frugally themselves in order to send their children to a 'good' school or be able to afford to keep their children at home, rather than the children going to work at 16 and paying board money to the parents.

In more recent years 'middle class' has slid into meaning 'middle management' in terms of employment, but after the 1990s where 'middle managers' were often the first cost-cutting exercise a company did, status in the community has changed again.

Onlookers are now more likely to think that the four wheel drive car will be leased (liability), rather than previously assuming that the family owned the car (asset).

So perhaps we are back to the original classification. Wanting intangibles for our children - that they are happy, healthy, educated (in a literal as well as social sense - not coarse and vulgar, set ambitions for themselves, and in due course, will want a better life for their own children), establish secure relationships for themselves with suitable partners, and have a bit of grit in their personalities.

In our family we consider ourselves 'upper working class'. If we don't work we don't eat. Just because we have invested money into real estate investments does not make us different from what we are. We want the 'best' for our children but our way of providing that is to teach them how to achieve that for themselves. We have invested in their education at the local private Christian school (approx $95,000 in fees across the three of them), don't charge them board, but by golly! we expect and insist that they will have ambition, aquire meaningful work for themselves, save and invest in property, and be moral and upright citizens of good character and reputation.

And you can't get more bland than that!

Cheers

Kristine
 
Lotana wrote: 'For example, "middle class". I am sure it has different mening in every country. How would you define it in Australia?'

I think most Australians would consider themselves 'middle-class' and like to think of society as having only small lower and upper classes. I believe there was a book called 'Class in Australia' that goes into all this, but I haven't read it.

Following is not one, but four snapshots of class which may assist you to form a definition.

KARL MARX AND ROBERT KIYOSAKI

Marx defined class in relation to the ownership of the means of production. If you own it, you're bourgeoise; if you don't, you are a member of the (numerically large) proletariot.

I don't see Marx's analysis as being that different from the distinctions people like Robert Kiyosaki draw between wage and passive income. Those without income-producing capital must be workers, while those with sufficient capital to live off rents and dividends are financially independent. In this, I would regard rental property as a means of production (ie housing for people).

There are some groups that are not straightforward fits. Ie self-employed tradesmen may be contractors, work for several people and own their tools. Their income might be quite high. However they are not necessarily financially independent unless they have built a business that they can either (i) get others to manage or (ii) sell for a profit.

Also some self-funded retirees might only receive $20k income per year from a couple of properties and some super. The income is fairly low, but if they can support themselves on that income, I would regard this as being financially independent.

This line of thinking would have lower and middle classes working or recieving social security, while the upper-class would require ownership of the means of production and/or financial independence.

MAX WEBER, STATUS AND AIR CONDITIONERS

This is the line of thinking most in tune what most people regard as class. It has less to do with your owernership of the means of production, but more to do with your position in it.

This is the age of the 'organisational man'. Occupation is everything and determines social relationships. Little kids who can hardly read are asked 'what do you want to do when you grow up?'.

Measures might include (i) income (ii) responsibilities and (iii) formal education.

A school headmaster, academic, police officer, or business owner would be regarded as middle class. The more senior or higher-paid of these plus lawyers and doctors would be upper class.

A factory worker or operative might fit into the lower class, even though their income might exceed that of the numerically larger lower middle classes (eg shop assistants).

If you stand at work, have no air conditioning and don't wear a tie, your job might be considered lower class. If you sit, wear a tie and have air conditioning your job is probably at least lower-middle class.

I forgot who it was, but someone said that 'people who stand get paid less than those who sit down'. No doubt schoolteachers would agree!

Note that some workplaces (eg retail) may have a mix of the two - salesmen with ties who work airconditioned versus dock staff without airconditioning. In summer the areas where the higher status people work can easily be traced as it's the coolest!!!

Outsourcing, competitive tendering, contractors and continual restructuring has led to the eating away of the stultifying, monolithic orgainsation and making status harder to define than it once was.

PURE INCOME

You are right that this varies around the country. Country areas are primarily lower-middle-class whereas the big cities have a greater representation of higher-status/higher income occupations. A personal income much over $50k would be rare in a small country town (the local doctor and a few others), but very common in the wealthy suburbs of a capital city.

Nevertheless if we are to define class on the basis of annual income, I would suggest the following:

<$15k: Low income
$15-25k: Working poor
$25-40k: Lower middle-class
$40-60k: Upper middle-class
$60-80k: Upper class
$80k+: Really upper class

Some on this forum (many of whom earn $60k or more) will no doubt (in the Australian way) howl that they're really middle class, but if you look at the ABS earnings stats, only a small percentage of the population earn incomes above that.

POLITICIANS

Politicians love to appeal to the swinging middle class. John Howard's 'mainstream Australia' is much the same as 'middle Australia' that he wanted to incentivate in the '80s.

They have huge mortgages, two or three cars in the garage, are non-unionised or self-employed and more personal debt than is good for them. Alternatively they are self-funded retirees in million dollar houses not averse to a tax break or two.

The older sections of 'Middle Australia' live in established suburbs like Camberwell, while the younger component live in outer family suburbs like Rowville and are dubbed as 'aspirationals'. They want their kids to get a good education, but earn too much to receive Austudy.

Their brothers and sisters might have no or fewer kids, live in trendy inner suburbs and vote for greens as well as eating them. But these people could also be middle class, demonstrating that the middle-class covers a diverse range of occupations, lifestyles and attitudes.

Regards,

Peter
 
Originally posted by always_learning
How to start a huge problem!

a) Marry a Japanese
b) Have a mother who does the above with christmas wrapping.

Always_Learning,

Here's a permanent solution for you:

Give your parents gifts of brand new Xmas (and birthday) wrapping paper.

Cheers,

Aceyducey
 
Love this subject

Love this subject!

I fit in too, Mum 1916 Dad 1920

My Dad made our clothes, there were 3 girls in our family, my Dad to give us new clothes bought material, worked out a pattern and made all 3 girls the same dress just in different sizes.

He made us matching knickers with a pocket in the front for our hankies!

I was the eldest and hated being dressed the same as my two little sisters.

Dad was the one that cut the sheets in the middle and joined them to make them last longer. He also learnt how to knit socks.

To make pictures for the walls Dad saved the silver paper in different colours and made pictures of crinoline ladies.

Take-away food was fish and chips but only as a BIG treat

Holidays was a week in a rented caravan at a beach not too far away
 
<$15k: Low income
$15-25k: Working poor
$25-40k: Lower middle-class
$40-60k: Upper middle-class
$60-80k: Upper class
$80k+: Really upper class

$80k+ "really upper class"your joking right ? after the ATO tax stick, I dont even think I could keep food on the table, a roof over our heads, a 1/2 decent used car in the driveway in Sydney for that!!! $80K I would class as lower middle class. $150K Middle-class. $500K or more upper. $1M/year (by way of income and non-income) Really upper class.

ie. with $80K I cannot even get a mortgage on an average priced $440K house in Sydney with a 20% deposit!....
 
Last edited:
Originally posted by Aceyducey
Here's a permanent solution for you:

Give your parents gifts of brand new Xmas (and birthday) wrapping paper.
hey, a great idea.

But how would you wrap it?
 
Hi Always Learning:

I was thinking individual incomes with those figures. I'd multiply by approximately 1.5 to convert to household income.

http://www.smh.com.au/articles/2003/07/28/1059244563019.html

mentions that 'Runaway house prices mean the monthly loan repayment needed to meet a typical first-home mortgage in Sydney reached $2538 - 40.6 per cent of average household income.'

This makes the average annual household income in Sydney around $75k annually. I am not sure if this average is 'mean' or 'median'. Due to the small number of high income earners boosting up the average, I think median is a more representative measure.
http://www.uq.edu.au/economics/johnquiggin/news/Lies0112.html

has some interesting commentary about median household incomes in places like Ipswich and Western Sydney which are somewhere near $50k. If you think that's low, many country areas are even less (see http://www.theage.com.au/articles/2003/03/25/1048354596268.html ). But the lower house prices are some compensation.

Regards, Peter
 
Originally posted by chrispy
Love this subject

Love this subject!


He made us matching knickers with a pocket in the front for our hankies!


Hi Chrispy

Knickers with pockets???

Haven't heard of that one, but kinda seems like a good idea.

Perhaps in this age of wanting to relive the past, this could be the latest fashion trend - has to make more sense than ugg boots.

This reminded me of that saying "as useless as a hip pocket in a singlet" - always thought it was a joke, but perhaps not. Your dad ever sew pockets onto singlets?;)

Hankies in your knickers must have had some down sides though.

What did you do when you wanted to get it out - must have received some strange looks from people when you reached under your dress (I assume) to retrieve the hanky - and then to take it to your face????

In the modern age, you could keep all sorts of stuff in there - mobile phones, credit card, drugs of choice, assorted family planning devices, small flask of alcohol to sneak into sporting events..............

The more I think about it, the more I like it........you got a patent yet?:p

GarryK
 
Interesting topic.

Love the pocket in the undies. Never had one myself.

I don't think saving things is neccessarily about money although saving money is a great incentive. I don't see the point of getting something new all the time just to throw it out again in a short time when the old thing will do.

There is an environmental issue here.

You can use a polyurithane cup for your coffee which you drink for about 10 minutes. It then takes over 6 thousand years to decompose. Or you could use a regular cup for your coffee-10 minutes-wash it 2 minutes and save the cost of the polyurithane cup as well! Same principle applies to all the money saving examples of reusing things given by others.

Robyne
 
Back
Top