Two of the best “tried and tested” ways to rapidly grow your wealth are to:
Both methods work, but leverage is not unlike that smoking hot girlfriend you used to have who was, let’s admit it, pretty unhinged.
Hanging about too long was always going to get you into trouble — serious, call-the-police-NOW trouble. But the allure was so strong and kept pulling you back. The decision was really tough. Not because it didn’t make sense, but because you weren’t really thinking with your brain.
Enter the Allure of Ever-Rising Prices (and the Debt That Fuels It)
That debt, like the smoking hot but unhinged girlfriend, may be about to do what it always promised to do — damage!
Australia’s household debt-to-income level has reached a spectacular new high, hitting 200% for the first time. Total household debt now stands at an eye-watering record $2.47 trillion… or nearly $100,000 for every man, woman, and child in the lucky country.
Even after debt-free households are factored in, the average Aussie household now owes twice the amount they bring in annually from wages, welfare, and other sources of income.
I get it — Joe Sixpack isn’t skilled at managing money. Hell, he’s a plumber, or a lawyer, or works in IT, or maybe he makes overpriced lattes for soccer moms. Whatever it is he does, he’s not the time to think about (or even know about) the eurodollar market or global capital flows, let alone price to income ratios.
What’s more, Joe’s got 2 and a half kids, a wife with a shoe fetish, and all these things take up a lot of his time.
What he does know is that he needs somewhere to kip at night and so do his family. So he needs a house. But he figures this is an investment (poor sod) and so he understandably makes it as BIG as he possibly can.
For many folks, it’s the only time in their life they actually think about making a capital allocation to literally anything other than weekend beer and the odd family holiday to Fiji. And maybe it’s a good thing as it is the only asset that may actually leave him with something when the nurse wheels him around with tubes up his nose feeding him mushy peas.
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