Thriving on Minimum Wage

[jaycee]

Not everyone is capable of earning a higher income. My example is real numbers in an area that is frequented by those on a low income. Welfare recipients currently rent $300 properties, so it could work. Obviously it won't be for everybody and it won't work in every area of the country.

So.....low income earners CAN rent at $300pw (Ive seen plenty that do), so that is achievable. Centrelink/DOH will even help with the initial bond application.

It could be a good leg up but first they need the knowledge that it CAN be done and the motivation to DO IT.

By doing this taking in boarders thing, wouldn't the person be doing exactly that - earn a higher income....i.e. have more $$$ coming in each week than before doing this ?

The are usually lots of different ways to achieve the same result.

People can also choose to just work an extra 8 hours and pick up $200 / week...... having boarders and being responsible for everything & re leasing etc etc will surely take up some time & stress.

 

[skater]

By doing this taking in boarders thing, wouldn't the person be doing exactly that - earn a higher income....i.e. have more $$$ coming in each week than before doing this ?

I know what you are saying Jaycee, but my comment was in response to CJay who said

All this effort, when it could be spent getting a job which pays beyond minimum wage...

Not everyone is capable of getting a JOB that pays above minimum wage. They can, however, do other things to suppliment their wage, this being one of them.

 

[jaycee]

I know what you are saying Jaycee, but my comment was in response to CJay who said


Not everyone is capable of getting a JOB that pays above minimum wage. They can, however, do other things to suppliment their wage, this being one of them.

?

I reckon the same applies to people not being able to do what you & kathryn suggested too, that not everyone can run a share house like you said, but pretty much, if they actually want money, can get a job and earn more than minimum wage

?

 

[Corey Batt]

Not everyone is capable of earning a higher income. My example is real numbers in an area that is frequented by those on a low income. Welfare recipients currently rent $300 properties, so it could work. Obviously it won't be for everybody and it won't work in every area of the country.

So.....low income earners CAN rent at $300pw (Ive seen plenty that do), so that is achievable. Centrelink/DOH will even help with the initial bond application.

It could be a good leg up but first they need the knowledge that it CAN be done and the motivation to DO IT.

I'd argue that most people beyond those with extreme circumstances (disability etc) with enough time and minimal education be able to expand their employment opportunities beyond the minimum wage of $30,600. Because even working at Pizza Hutt will pay you more!

I'd argue it is better financially and for the well-being of the individual to exert their energy into increasing their income than to juggle such a risky situation. I'm not advocating running off to the mines to be rich like some do, I'm suggesting that advocating people on some of the lowest wages in the country put themselves in a situation wherein they are expending a large portion or in previous examples, more than their income to play boarding games, where you may find yourself without enough boarders, damaged property which you are liable for etc.

I've got a good one to get low income individuals ahead. All you need is to be healthy and willing to take orders. Join the army. You'll make substantially more than minimum wage, get medical, accommodation, clothing, food, education - the works. Guaranteed work stability and a bucket load of government perks. Save all your wage for two years whilst in the army, get cheap interest rates on your loans + upfront cash from the government. Sounds like a plan to me!

 

[kathryn d]

By doing this taking in boarders thing, wouldn't the person be doing exactly that - earn a higher income....i.e. have more $$$ coming in each week than before doing this ?

The are usually lots of different ways to achieve the same result.

People can also choose to just work an extra 8 hours and pick up $200 / week...... having boarders and being responsible for everything & re leasing etc etc will surely take up some time & stress.

Boarders are tax free income. Even though the extra taxable income, could be used to show a lender, when it comes time.

Of course having boarders would be stressful...wouldn't working 8+ extra hours a week be stressful too?
A person could take on a another job at minimum wage..that is another OPTION.

CJay,
If Pizza Hut pays more, what type of job pays minimum wage? How much does Pizza Hut pay?
Rob (AlmostBob) was in the army for 17 years..it does have it's risks too

 

[jaycee]

I'd argue that most people beyond those with extreme circumstances (disability etc) with enough time and minimal education be able to expand their employment opportunities beyond the minimum wage of $30,600. Because even working at Pizza Hutt will pay you more!

I'd argue it is better financially and for the well-being of the individual to exert their energy into increasing their income than to juggle such a risky situation. I'm not advocating running off to the mines to be rich like some do, I'm suggesting that advocating people on some of the lowest wages in the country put themselves in a situation wherein they are expending a large portion or in previous examples, more than their income to play boarding games, where you may find yourself without enough boarders, damaged property which you are liable for etc.

I've got a good one to get low income individuals ahead. All you need is to be healthy and willing to take orders. Join the army. You'll make substantially more than minimum wage, get medical, accommodation, clothing, food, education - the works. Guaranteed work stability and a bucket load of government perks. Save all your wage for two years whilst in the army, get cheap interest rates on your loans + upfront cash from the government. Sounds like a plan to me!

Yeah but then you're being a traitor to all the other low income earners

(or something like that)

I'm not sure what the aversion is to earning a $ by honest simple work without risk / complication s of involving other people either.. Some people like doing the boarding thing.. fine,but it being presented as the only credible choice or the easiest option confuses me...both the other job option & the boarding house option will take up the TIME... I think that the job option might actually have a bit less risk associated with it than setting up a boarding house (?)

 

[Aaron_C]

The bigger question is which landlord would let you sub-lease rooms? Especially if they see you are on a minimum wage - how are you going to make good if the 3 other tenants destroy the place? When many unrelated people live together there is a shedding of personal responsibility which leads to things not being done which ought to be done.

 

[maloo]

If this mythical person has 1 job I'm pretty sure they could gain extra employment outside of the main income source. If they are physically able to work this shouldn't be a problem. People on a pension I'm not real sure what hope they have given they are on a fixed low income $330 a week? I'd nearly eat that in a week.

The last thing I would want to come home to after a hard day on the tools would be to a couple of free loading uni students studying anthropology that play war hammer in their spare time.


Its all ok to work in extreme environments... its just nice to come home and be able to control your spare time. This is compromised when you involve boarders and the likes.

Having dinosaur arms is not all ways the best way to live. I think I would rather work a few extra hours than have the hassles. Earning the extra income is a better way to build a base.

 

[Ergophobia]

The last thing I would want to come home to after a hard day on the tools would be to a couple of free loading uni students studying anthropology that play war hammer in their spare time.

how about a couple of sweedish backpackers?

 

[Corey Batt]

Boarders are tax free income. Even though the extra taxable income, could be used to show a lender, when it comes time.

Of course having boarders would be stressful...wouldn't working 8+ extra hours a week be stressful too?
A person could take on a another job at minimum wage..that is another OPTION.

CJay,
If Pizza Hut pays more, what type of job pays minimum wage? How much does Pizza Hut pay?
Rob (AlmostBob) was in the army for 17 years..it does have it's risks too

Not sure on the exact numbers, but a friend of mine worked 30 hours a week at PH whilst in uni, taking in 35k at 19 yrs old. At full rate and 38 hours that would be significantly above minimum wage.

Whilst I was in uni I worked doing unskilled labour, working somewhere floating between 32-40 hours a week. Made 60k. Other colleagues left school at 14, completely unskilled.

I like how we all whine on about high wages in Australia and how pay is quite high for low level workers, but then we can also try to argue that it can be difficult to earn higher than minimum wage...

Double-think much?

 

[jaycee]

The bigger question is which landlord would let you sub-lease rooms? Especially if they see you are on a minimum wage - how are you going to make good if the 3 other tenants destroy the place? When many unrelated people live together there is a shedding of personal responsibility which leads to things not being done which ought to be done.

Not the only one who thought about all that

how do you set yourself up to be able to afford setting up this "business" as well, remembering the situation that many of the people that this advice is targeted to.....

As said, PIZZA HUT pay more than minimum wage an I don;t see the same associated risks.. even if something goes wrong, you wont get left with bills to pay if you lose your pizza hut job like you might if your tenants do a runner.

If a person had no savings etc, I thought this would be a not unimportant consideration before entering into a venture like runnning a boarding house (for lack of a better terrm)

 

[Nemo30]

I agree with the principle, however unsure the numbers stack up in some of your examples (I live around the corner from your first example).

I used a variation of this when I bought my first house. At the time I was a single parent on about $35k a year with no deposit. My mum bought the house and rented it to me for a year - I paid the mortgage and all outgoings.

I rented out the main bedroom and ensuite to be able to afford the mortgage.

After a year the house had risen in value (+80k) and I could show a history of paying the mortgage. My mum sold it to me for the same price she paid.

First bank said no, however my regular credit union said yes based on the increase in equity (still no deposit or savings) and my payment history (I could demonstrate I could afford the mortgage). I continued to rent the main bedroom out for several years until I sold and upgraded.

No way I could have afforded the house without having a boarder.

 

[jaycee]

Not sure on the exact numbers, but a friend of mine worked 30 hours a week at PH whilst in uni, taking in 35k at 19 yrs old. At full rate and 38 hours that would be significantly above minimum wage.

Whilst I was in uni I worked doing unskilled labour, working somewhere floating between 32-40 hours a week. Made 60k. Other colleagues left school at 14, completely unskilled.

I like how we all whine on about high wages in Australia and how pay is quite high for low level workers, but then we can also try to argue that it can be difficult to earn higher than minimum wage...

Double-think much?

I think he's right kathryn...

Some times it's not that easy though.. a young mum without a car (yes,m happens a lot) might not be able to work nights at Pizza Hut due to needing the baby etc etc...oir at a bar like I described for similar reasons etc

But for that person, another thing which could be difficult to achieve is saving up money in the first place whilst on minimum wage to buy enough furniture etc to get the ball rolling


the answer is probably simpler than we think - horses for coarses, people can work out for themselves what would work for them.. but why would we presume that people on low incomes do not already know this themselves ?

 

[kathryn d]

If fast food places pay higher than mimimum wage,then I have no idea what jobs would pay minimum in Australia. What jobs then?

Going from Canadian experience, these places would only pay minimum.

The only reason I kept on about the "head tenant" was because many were saying it couldn't be done.. Maybe not at the rates I gave, but the ratios were the same.

Then it was "no LL one would even consider such a proposition" ..but yet I had a response that wasn't NO.

Some would want to take in boarders.
I'm sure the hypothetical person may rather not, but sometimes that is what may be necessary. Maybe they do have a child and can't work more hours.
Maybe they are lonely, and like people around.
Maybe they want to self manage future IPs and this is great learning experience.

Cheap furniture was explained how to obtain.
How the initial bond and possible 6 months up front rent was obtained (renting a room and saving)

I think we have been able to show it is possible.
Having a higher wage would be better.
Maybe taking courses to improve income, but in the meantime, they still need to keep expenses down.
Not every boarder would be a student. They may actually appreciate living in a quiet home.Everyone in their own room, except when eating.(loungeroom may be another bedroom)

As Skater said,
It could be a good leg up but first they need the knowledge that it CAN be done and the motivation to DO IT.

 

[skater]

?

I reckon the same applies to people not being able to do what you & kathryn suggested too, that not everyone can run a share house like you said, but pretty much, if they actually want money, can get a job and earn more than minimum wage

?

I was mearly showing it as an option. Not what most people would do, but it is doable. Beleive it or not there actually ARE people out there who do find it difficult to move outside of their 'station', so to speak.

I'd argue that most people beyond those with extreme circumstances (disability etc) with enough time and minimal education be able to expand their employment opportunities beyond the minimum wage of $30,600. Because even working at Pizza Hutt will pay you more!

I'd argue it is better financially and for the well-being of the individual to exert their energy into increasing their income than to juggle such a risky situation. I'm not advocating running off to the mines to be rich like some do, I'm suggesting that advocating people on some of the lowest wages in the country put themselves in a situation wherein they are expending a large portion or in previous examples, more than their income to play boarding games, where you may find yourself without enough boarders, damaged property which you are liable for etc.

I've got a good one to get low income individuals ahead. All you need is to be healthy and willing to take orders. Join the army. You'll make substantially more than minimum wage, get medical, accommodation, clothing, food, education - the works. Guaranteed work stability and a bucket load of government perks. Save all your wage for two years whilst in the army, get cheap interest rates on your loans + upfront cash from the government. Sounds like a plan to me!

Again, not suggesting that everyone do this, but just pointing out that it is do-able for those who wish to follow that path. The army is NOT something that everybody wants, or is able to do either. I agree it is an OPTION, the same as what Kathryn has suggested is an OPTION. It is, however not the only solution.

Someone on a low income can do many things to suppliment it. They can get a higher paying job or mow lawns, have an internet business, sell on Ebay, join the army reserve or TAKE IN BOARDERS. What is right for one person will not be what is right for another.

 

[HiEquity]

Boarders are tax free income. Even though the extra taxable income, could be used to show a lender, when it comes time.

Doing this may be OK in Canada (I don't know) but in Australia it's illegal. Income from boarders is very much taxable...

A lot of people may not declare the income but in doing so they would be breaking the law.

 

[kathryn d]

Doing this may be OK in Canada (I don't know) but in Australia it's illegal. Income from boarders is very much taxable...

A lot of people may not declare the income but in doing so they would be breaking the law.

I am relying on the information other SS members have said about the ATO not considering boarders, as paying rent.It is considered contributing to the household. The head tenant is contributing the holding of the lease, and the ultimate liability for any damage.

We have similar rules in Canada.

One deciding factor is the "head tenant" actually lives on the premises.

 

[wobbycarly]

how about a couple of sweedish backpackers?

Here you go...

 

[weg]

Oh dear...

 

[HiEquity]

I am relying on the information other SS members have said about the ATO not considering boarders, as paying rent.It is considered contributing to the household. The head tenant is contributing the holding of the lease, and the ultimate liability for any damage.

We have similar rules in Canada.

One deciding factor is the "head tenant" actually lives on the premises.

The circumstances where this is the case are pretty narrowly defined and don't include just the payment of "board" by anyone. Student boarding can be exempt as can be seen here but as can be seen in the link it's pretty hard to satisfy the conditions...