Staying motivated on a low income?

[JamesGG]

For whatever it's worth, I bought my first property as a teenager when earning about $23k/pa. The second was about a year later when earning $32k, from memory. No handouts from my parents and certainly couldn't afford to buy in Toorak. These, and most since, were small properties in outer suburbs with potential to add value.

Now six years down the track, and with the profits from those two alone (not to mention the other deals and projects since); I can afford to buy in Toorak (although I believe that there is still better opportunity elsewhere and wouldn't want to live there, either). I'm thankful that I'm no longer on a low income but will long remember what was actually possible back when I was.

The 'foot-in-the-door' theory is perhaps a good one to consider. We've all gotta start somewhere, hey?

 

[skater]

There seems to be a bit of a discrepancy with these two quotes.

Btw, I have every right to give advice in this area. I am personally on a low income (2nd year grad).

Before anyone comments on my 'privilege', let me tell you guys that I work 7 days a week including public holidays (my normal full-time job and shift work at a cafe). I had 3 jobs during university (even overloaded and did 5 subjects per semester). I worked part-time at a property consulting firm, tutored over 20 hours per week and did shift work at the cafe.

I'd be interested to learn what this "low" income is, when there is more than one job involved and working 7 days a week.

Or, maybe he just didn't study hard enough or is lazy at work, so they don't pay him well.

Just because I live at home doesn’t mean I don’t know what real life living costs are. In fact, I would argue that I know MORE about them than someone that actually moved out. It is because I know and appreciate what the costs are (or roughly) that I know it is a better idea to stay at home and not waste money on unnecessary things like ‘rent’ just because you want to be ‘independent’.

Maybe we should let all those people who can't live at home (for whatever reason) that they shouldn't waste money on unnessary things like "rent" and petition the government to build more homeless shelters to cope with the influx, and they better be well equipped with soup kitchens and a big common area for social gatherings for all those budding investors, so they can save every cent.

I'm not sure if your comments are just niave or you are completely delusional. If you are on a low income and living in a large city away from parental support there are many things that make your journey difficult. Those difficulties can be overcome, but please, don't insult those who are struggling financially by saying they are on a low income because they are lazy or didn't study at school.

Telling people to have zero discretionary spending, to go to charities to feed themselves, catch public transport (not everyone CAN get to work by public transport) go to work when they are sick etc, and then in the next breath advise them to look into something that costs $300-$400k, which would put them in greater financial stress than they already are, which, BTW, with all your calculations not once have you factored in any problems. What happens if a water heater blows, or a vacancy for a couple of weeks, or a bad tenant (yes, you get these in good areas as well as bad ones)?

You really need to step back, admit that you really don't have a clue about the struggles these people encounter. You live at home with Mommy and Daddy, apparently contribute nothing towards family expenses, have little time to socialise (working 7 days) and when you do, sit around playing board games with your friends? On top of that you have a huge cash injection for your only IP courtesy of Mommy and Daddy who will also bail you out should you get in trouble. You are most definately in the minority.

As a parent of two adult children I personally feel that your parents have been irresponsible in providing such a large amount of money to someone so young. In life you learn a heck of a lot by going out and doing the hard work yourself. You appreciate what you accumulate much more than if it is given to you. The throw away comment made that if you get into trouble with your mortgage, your parents would step in and help out says this very clearly.

As a parent, I expect my adult children to be responsible for themselves. If they get into trouble, then they have to wear the consequences. I have provided for them for all their formative years. Spent simply oodles of $$ on their sport, for which both of them represented the Country. In fact, in one year alone we spent $36k (that is not a typo, by the way) on the costs for our family to compete.

Sure, I could have denied them this joy and funnelled all the money into my investments. We would sure be in a much better financial position by now, but life is not to be lived for investments alone. Money is there to be enjoyed as well as to provide a future. You need balance in life. I feel that all work and no play make DeeHwa a dull boy.

 

[RumpledElf]

Look, I am not trying to put down people but firstly, and honestly, you must ask yourself the question why you are on a low income and if applicable, why your parents have not succeeded or become financially more well off. The sooner you realise this, the more you will thank me. Maybe if you think about it truthfully, perhaps you did slack off at school. Perhaps you preferred to work the basic 5 days and not on weekends (so as to earn that little bit extra). Perhaps you took a sick day, but in fact, deep down you knew you could have attended work. Perhaps you shouldn't have spent that much on a car, or gone on that holiday which you seem to slot in every year. Perhaps you blow hundreds of dollars per year on cigarettes and beer. Perhaps you always got the latest gadgets. Maybe you got/have a girlfriend and boyfriend and eat out every second night.

I know loads of people who earn < $35k and are over 30. Some are on pensions. Virtually everyone in this town earns < $40k - the median HOUSEHOLD income here is $40k, the people who earn over that are farmers. My father is an artist/author and some years earns single digit thousands, my mother and rather a lot of other people I know are in the public service in the health sector and don't earn a great deal over $50k despite being into their 50s now. You'll find the vast majority of not-so-senior public servants don't actually earn very much. Perhaps you should take this up with the Government and insist that nurses - who go to uni for years and work very hard - should be paid $100k. Or you should campaign for all nurses to quit work and find better paying jobs. Repeat for all other lower paying fixed salary jobs.

I earnt $35k as a graduate 10 years ago, which was standard issue for that job back then. Same job would be around $65-70k now. I have since quit work to do 'other' things that will eventually net us a good income (not in Australia unfortunately, but that's why they have the internet) and in the meantime we earn a dangerously low (but rising) income which we live on very comfortably. There's no way in hell I would even think about a $300k loan, just one month without extra money coming in and we'd be completely screwed. Sure, I should chase venture capital but there's not a lot around at the moment and noone is interested in something that is illegal in your home country and is 'only' going to net $200-300k a year, not millions. So, we are taking the slow path of getting self-sufficient with passive income first while doing our own thing instead of moving to the east coast and being a mundane worker in some $100k+ job (entirely possible, given my qualifications and experience) which wouldn't leave any time for the fun things in life and I'd barely get to see the kiddlywinks. Both ways would delay our end goal equally, we've chosen the more relaxed option.

There's a lot more to life than money.

 

[DeeHwa]

How would you know!! Have you ever tried to save for a deposit on a low income of just $35 K pa??

Oh thats right mummy and daddy are holding little johnnys hand

How about you go out into the real world. Cut off ties with your parents. Go it 100% alone and see how you go saving and managing on your own income without the support of your parents!!

I think it is great that you are in a good position dont get me wrong. But you have absolutely nooooo idea mate. lol are you for real!!

Yes I have. I started professional work at the age of 20 (August 2006) and I was a 3rd year uni student studying a double degree. I was making about $250 per week take home pay at the property consulting firm. I also tutored over 20 hours during this time and made about $500 per week take home pay. I also worked at the café, about $100 per week take home pay. Thus, I was making about $850 per week take home pay. Giving such a workload (including overloading 5 uni subjects per semester), I didn’t have much to spend and spent most of my days watching US drama series, sport and downloading movies at home. I don’t even use msn or have Facebook which shows that I don’t go out much or socialise. I estimated that I would have saved about $350 per week (I will even exclude my property consulting firm income), so at the age of 21, I would have saved $18,200, but let’s assume $18K. I worked full-time at the property consulting firm at the age of 22 (during my year-out) and was on higher pay, still worked at the café, but cut my tutoring hours drastically, to about 7-8 hours. Saved about $20K during this period. At the age of 23, probably saved $10K as I worked part time, cut all tutoring hours and still did the café shifts. At the age of 24, worked full-time and saved probably another $15K or so on about $50K gross, which relates closely to the $35K net salary.

So all in all, I saved $18K + $20K + $10K + $15K = $63K

The above does not even include the hours of tutoring I did at the age of 19 and 2010 income saved.

I also PROVED to you that I was able to save a decent $63K EVEN with a net salary WAY less than $35K.

 

[DeeHwa]

Thats b*****.

When I got my first loan I was earning $37 K gross. I was only able to get a loan for $177 K with ANZ. If I had gone with another lender maybe I would have got a bit more I dunno but certainly not $342 K. Your dreaming!

You obviously don't know the difference between net and gross.

 

[Luv2Travel]

Yes I have. I started professional work at the age of 20 (August 2006) and I was a 3rd year uni student studying a double degree. I was making about $250 per week take home pay at the property consulting firm. I also tutored over 20 hours during this time and made about $500 per week take home pay. I also worked at the café
blah blah blah

For a start you were only able to save all that up because you did live at home and sponged off your parents. Many people, for various reasons don't have that option. But this has been explained to you 1,000 times and you just don't get it. Secondly, considering how hard you were working from a young age and now you are 24 I'm surprised you don't actually have more. There are a number of members on here that I can think of (one in particular) who are about your age or younger and have a greater net wealth than you (taking out the $600K Daddy gave you) who have done it all themselves. My amusement is now over, I'm tired of reading your dribble.

 

[DeeHwa]

For a start you were only able to save all that up because you did live at home and sponged off your parents. Many people, for various reasons don't have that option. But this has been explained to you 1,000 times and you just don't get it. Secondly, considering how hard you were working from a young age and now you are 24 I'm surprised you don't actually have more. There are a number of members on here that I can think of (one in particular) who are about your age or younger and have a greater net wealth than you (taking out the $600K Daddy gave you) who have done it all themselves. My amusement is now over, I'm tired of reading your dribble.

Most young adults at the age of 18-23 (university years) have the option of living at home. Some just choose not to because they want to be independent and/or don’t want to feel awkward smoking crack in the living room or bring their boyfriends/girlfriends at home and banging it all night long. I am not against such indulgence, not by any means, but if you so choose to spend all your time and money on these things, then of course you won’t be able to save a deposit on a $300K property.

True, I likewise know of people that earned more (mainly because of higher pay) and have a greater net wealth. Perhaps your right, I didn’t study hard enough or worked hard enough. Perhaps I do have myself to blame for not being the richest self-made person at the age of 24. However, you just contradicted yourself by even commenting on this. You blabbed on about how it is hard to save up a deposit on a property and then you go and say there are a number of members on SS (and probably many other Australians out there) who would EASIER have a greater net wealth than me at the same age. Haha, so you still stick to the point that it is hard to save a deposit on a property worth $300K.

 

[Luv2Travel]

Most young adults at the age of 18-23 (university years) have the option of living at home. Some just choose not to because they want to be independent and/or don’t want to feel awkward smoking crack in the living room or bring their boyfriends/girlfriends at home and banging it all night long. I am not against such indulgence, not by any means, but if you so choose to spend all your time and money on these things, then of course you won’t be able to save a deposit on a $300K property.

I can assure you I moved out for none of the reasons above. However, I did move out at 22 into my own home rather than rent because I bought a "bad" (by your definition) investment.

However, you just contradicted yourself by even commenting on this. You blabbed on about how it is hard to save up a deposit on a property and then you go and say there are a number of members on SS (and probably many other Australians out there) who would EASIER have a greater net wealth than me at the same age.

No, my whole point from the start has not been that it's impossible to buy property if you don't have Daddy holding your hand (although it is a lot more difficult). It's been that not everyone is in a position to buy inner city $400K property with low yields which is what you keep saying is so easy to do on a low income. I think you'll find the members on this forum I was referring to buy extremely cheap properties with high yields and buy many of these rather than just one Toorak property.

 

[joanmc]

Just curious...did you pay tax on that tutoring money or was it cash in hand?

 

[skater]

At the age of 24, worked full-time and saved probably another $15K or so on about $50K gross, which relates closely to the $35K net salary.

I also PROVED to you that I was able to save a decent $63K EVEN with a net salary WAY less than $35K.

OK, so your net for your full-time job is $50k, but you are still working part-time as well. Even with just your full-time income of $50k, that is an AVERAGE income, not a LOW income.

I thought we were talking about how someone on a LOW income could save and afford their property. Not someone who is on an AVERAGE income plus additional weekend income can do it while living at home, bludging off parents and having no friends to socialise with which is probably a bi-product of never having a social life or doing any after school activities growing up because Mummy & Daddy didn't spend anything themselves, and then you focusing soley on money as if it is the sole reason for living. It isn't!

Don't get me wrong, I'm not surprised that your parents squirrelled away everything they could get their hands on, if they grew up and lived through traumatic times. What I don't understand is how desperately you save EVERYTHING and don't actually learn to lighten up and enjoy some of lifes pleasures.

 

[wylie]

Most young adults at the age of 18-23 (university years) have the option of living at home. Some just choose not to because they want to be independent and/or don’t want to feel awkward smoking crack in the living room or bring their boyfriends/girlfriends at home and banging it all night long.

Of course, there are only two options..... live with your parents, work your butt off, have no life, but save lots of money, or bang away all night and smoke crack.

Please, stop this silly posting before you lose ALL credibility.

If you and your parents moved into a cardboard box on the side of the highway, near a petrol station to use the facilities, you could save so much more.

Well done to your parents for what they have done, but they have produced an adult child with some very strange ideas. Lighten up and enjoy life.

 

[Deltaberry]

Yes I have. I started professional work at the age of 20 (August 2006) and I was a 3rd year uni student studying a double degree. I was making about $250 per week take home pay at the property consulting firm. I also tutored over 20 hours during this time and made about $500 per week take home pay. I also worked at the café, about $100 per week take home pay. Thus, I was making about $850 per week take home pay. Giving such a workload (including overloading 5 uni subjects per semester), I didn’t have much to spend and spent most of my days watching US drama series, sport and downloading movies at home. I don’t even use msn or have Facebook which shows that I don’t go out much or socialise. I estimated that I would have saved about $350 per week (I will even exclude my property consulting firm income), so at the age of 21, I would have saved $18,200, but let’s assume $18K. I worked full-time at the property consulting firm at the age of 22 (during my year-out) and was on higher pay, still worked at the café, but cut my tutoring hours drastically, to about 7-8 hours. Saved about $20K during this period. At the age of 23, probably saved $10K as I worked part time, cut all tutoring hours and still did the café shifts. At the age of 24, worked full-time and saved probably another $15K or so on about $50K gross, which relates closely to the $35K net salary.

So all in all, I saved $18K + $20K + $10K + $15K = $63K

The above does not even include the hours of tutoring I did at the age of 19 and 2010 income saved.

I also PROVED to you that I was able to save a decent $63K EVEN with a net salary WAY less than $35K.

That's impressive. If only I knew you in person. You remind me of Crazy John who says anyone who's been through **** will succeed.

 

[Deltaberry]

Of course, there are only two options..... live with your parents, work your butt off, have no life, but save lots of money, or bang away all night and smoke crack.

Please, stop this silly posting before you lose ALL credibility.

If you and your parents moved into a cardboard box on the side of the highway, near a petrol station to use the facilities, you could save so much more.

Well done to your parents for what they have done, but they have produced an adult child with some very strange ideas. Lighten up and enjoy life.

Yea yea let's all bash the man for working hard and trying to get ahead in life.

Got to love tall poppy syndrome.

 

[Luv2Travel]

Yea yea let's all bash the man for working hard and trying to get ahead in life.

Got to love tall poppy syndrome.

No one's criticising him working hard. People don't like his attitude about how easy it is in life to support your self on a low income and buy "DeeHwa approved" property when the guy lives at home and gets $600K handouts from his parents and knows he has his parents to fall back on when "sh*t hits the fan".

 

[skater]

Most young adults at the age of 18-23 (university years) have the option of living at home. Some just choose not to because they want to be independent and/or don’t want to feel awkward smoking crack in the living room or bring their boyfriends/girlfriends at home and banging it all night long. I am not against such indulgence, not by any means, but if you so choose to spend all your time and money on these things, then of course you won’t be able to save a deposit on a $300K property.

True, I likewise know of people that earned more (mainly because of higher pay) and have a greater net wealth. Perhaps your right, I didn’t study hard enough or worked hard enough. Perhaps I do have myself to blame for not being the richest self-made person at the age of 24. However, you just contradicted yourself by even commenting on this. You blabbed on about how it is hard to save up a deposit on a property and then you go and say there are a number of members on SS (and probably many other Australians out there) who would EASIER have a greater net wealth than me at the same age. Haha, so you still stick to the point that it is hard to save a deposit on a property worth $300K.

OK, just for the record. I personally know a person of similar age to yourself who moved out of home at 18-19 years. Bought all bad investments (according to your criterior). Started work on a much lower income level than the one that you keep trying to tell us is a low income. Did not work 7 days a week. Had fun, (still having fun) enjoying the fruits of their labour along the way. This person would have a greater net worth than you AND THEY DID IT ALL THEMSELF.

I have the utmost respect for this person because they have not only build a stable future for themself and their future family, they did it all without Mummy and Daddy injecting vast amounts of money their way.

BTW, this person could certainly purchase a home of the same value as yours if they chose, again without Mummy and Daddy, but it appears they prefer to stick with bad investments.

 

[Mazda]

If you and your parents moved into a cardboard box on the side of the highway, near a petrol station to use the facilities, you could save so much more.

I'd suggest that DeeHwa could move that cardboard box onto one of the large tree-lined streets in Toorak. No facilities but at least he's living rent-free on a Toorak street.

 

[skater]

I'd suggest that DeeHwa could move that cardboard box onto one of the large tree-lined streets in Toorak. No facilities but at least he's living rent-free on a Toorak street.

LOL! Location! Location!