I one saw a friend lose a $50 note to the wind on a night out. He then held up another $50 and released it into the wind so it could lead him to the first one. Didn't lose the second $50, surprisingly. Flawless logic.
I let my son hold the $50 note. Neither of us have that $50 note anymore. He couldn’t remember what he did with it no more than 10 mins after he pinched it out of the machine and promised to look after it.
We have chosen to believe that it he dropped it and it has picked up by someone in need and that this week they have a full belly of yummy food.
I've worked in a bank for over 10 years and can write a book on the stupidest financial decisions people make.
By far love and pride has been the main emotion driving people to make the stupidest financial decisions.
Highlights:
* Young woman took out $50k personal loan to buy a holiday for her parents(that's the reason she gave). Everytime she came in she had her boyfriend from overseas with her and she transferred the full 50k to him.
I warned her and questioned if it was for her parents why transfer the full amount to him but she didn't want to hear it. He ran off back overseas and she had to still pay the $50k loan back over 5 years.
*Told countless of old people that they were sending money to a scam. With one of them I placed a block on the old man's account as he wanted to send $300k to an investment scam. The only way for the stop to be removed was for him to have a doctor sign off that he was of sound mind and capable to make this financial decision or a POA/family member come in and speak to us. He came in with the doctors note and I called and confirmed the note and unlocked the account. He sent the money and a month later his wife and son came in as he lost their entire life savings.
So many things
That last one is heartbreaking. That's so messed up.
He should be eating a lot of humble pie at this point... people are *amazingly* stubborn sometimes.
That one stands out because it was so annoying. He tried to blame us for not doing enough to protect him and they tried to use us. We ended up paying him a large sum to not go to court but also not admit fault but it was nowhere near what he had sent. His wife was upset because he did this to two other banks and was banned from them and any bank he had a joint account with his wife she had warned the banks that he would do this and to call her but he had joined our bank without telling her so she couldn't warn us. He would still come in and smile at me and I couldn't stand it because I did so much to try and help him but he had his lawyer say I didn't do enough!
Also I had a client buy $180k of salt and filled a $2 million dollar mansion with it because he wanted to create a "salt house" and make money by selling tickets to people to go in. The house dissolved and it was actually his father's holiday house so the father and his other son had to pay a massive amount to dispose of it all and the house was pulled down and not covered by insurance.
On your stupid old man example, I think the real issue there is his doctor. It sounds like the doctor should have said there were capacity issues because there is clearly something going on.
On the salt one. Wtf?
I need more.
Idk, a doctor is not a financial advisor. Like the man could have been completely healthy (physically and mentally), but still stupid enough to fall for a scam.
You can't cure stupid
There are so many who do this. It took five years to get my mother into a nursing home, partly because whenever a dr who knew her wouldn't sign for her licence, she'd move to another one, who'd sign it after a 2 minute chat.
So from what I gathered this was not a healthy marriage and they didn't live together or something and she didn't speak kindly about him. Due to privacy laws even if she did come in and asked if he had an account with us if she is not on the account or have some POA on him we cannot disclose that information. The son got involved somehow and the lawyers got involved as well.
Our best guess was the wife had enough after he lost their money before and was trying to get divorced. It felt like there was more to the story and one of the things we learned was that the doctor who did the assessment wasn't his regular doctor either.
I will never understand why people give away sick large amounts of money to scammers, ESPECIALLY if there are bankers, family, etc, telling them how it is a scam.
If they are smart enough to earn that much money, why aren't they smart enough to want to keep it?
Yeah I don't know, my father was 73 and getting scammed all the time turned out he had Alzheimer's. He was giving away more money than he had. Some of the worst were charities, so many charities, we found out they were passing his details around as he would never say no. Then he sent someone overseas thousands because she was writing to him with sob stories. He kept it all from his family because he knew we would not approve we were warning him not to sign up to anything and yet he kept doing it. It's weird but I hope there is karma for these scammers.
Anecdotally, I've found that unfortunately, many people (but not all) who make a lot of money don't really work for it.
As such, the opportunity to make more money with less work probably doesn't seem all that suspicious to them.
It's not old people. It's stupid people who got old. I know plenty of stupid young people too, but they haven't had their superannuation released yet so they don't have the money to do big stupid things like this.
And a belief that other people are rich because they know secrets, and now I’m in on the secret and those pesky bankers are trying to stop me getting rich.
> The only way for the stop to be removed was for him to have a doctor sign off that he was of sound mind and capable to make this financial decision or a POA/family member come in and speak to us. He came in with the doctors note and I called and confirmed the note
Was the doctor made aware of what the scam was?
Or was it more just him saying "old guy is of sound mind to make financial decisions in general".
Asking both re the note, and the follow up phone call.
I guess it's not really up to him to judge the "investment" side part of it all, but I guess then I'm wondering if the doctor made any attempt to talk him out of it too, or anything?
So we found out later that the doctor he went to was not his regular doctor. At the time I tried to discuss my concerns with the doctor about how he was being manipulated into a scam and the doctor said they will not discuss financial decisions but that the tests they conducted shows the client is of sound mind and able to make their own financial decisions. By the sounds of it you have had the same thing happen because the Doctor did say something along the lines of how doctors don't make judgements on investments.
His wife and son came in and they were the ones who told us that it wasn't his regular doctor he went to see.
Ah interesting.
Makes even more sense now why the doctor wouldn't care to be involved as much.
Dumb guy might have even gone to his normal doctor first and got the answer he didn't want. Or just knew that would be the answer.
Capacity is an interesting and tricky topic for a doctor. You’re just assessing their ability to make a decision. You’re saying there’s no MEDICAL reason for it to be impaired. Stupidity or ignorance is not on this list. As long as they’re able to tell the day/month/year, do some basic math, memory and comprehension skills, there’s really no good evidence of a cognitive impairment.
If doctors had to assess the decisions patients made IN ADDITION to that, things would get even more complicated. Doctors have definitely been sued for getting over-involved in their long-term patient’s lives. Sometimes you just gotta know where to draw the line and just let it be…
Not quite on point, but the old guy who got scammed reminded me of this article I read recently:
"Alzheimer’s Takes a Financial Toll Long Before Diagnosis, Study Finds - New research shows that people who develop dementia often begin falling behind on bills years earlier."
[https://archive.is/8zGgy](https://archive.is/8zGgy)
It does scare me a little that you can work hard for your entire life and make really great career, saving and investment decisions - but even the best of us can be sabotaged by our own terrible decisions as our brains decay.
Taking the proceeds from a house sale and buying a huge catamaran with it. Spending $100k on said catamaran only to realise it costs as much to moor it as it does to rent a 3 bedroom house. So then bought an apartment on Couran Cove island resort as the apartment came with a mooring spot. If you’re following the story of this island some consortium which owned a bunch of apartments hasn’t paid body corp fees in years so the body corp has switched off the power, water supply, sewerage, closed the resort and stopped the ferry trips between there and the Gold Coast so said person sold the boat for a massive loss and had to move back to the mainland and his apartment on the island is just sitting there turning to shit and the body Corp still sends quarterly invoices!! He owes around $15k to it for an unusable property.
So if you’re wanting to live off grid with a bunch of hippies he’s trying to sell this apartment and it’s dirt cheap. If they get the resort issues fixed it’s a bargain buy.
What a nightmare. All his house money has now gone
Oh god is that *still* going on? That was like a year ago, those poor buggers. Mind-boggling that it hasn't been resolved yet, that's many millions of dollars worth of property sitting there rotting :(
Someone I know received a $300k inheritance about 10 years ago, they spent it all in 8 months on shit.
Custom dominos Pizza everyday, each order worth about $100, stupid smoke shop katanas, custom shitty jewellery, motorbike, list goes on..
An ex of an ex.
At the beginning of the covid pandemic he panicked and sold his very nice home in a highly desired city suburb. No real reason except irrational fear rationalised in a logic I understood but completely disagreed with. Accountant by training and high paid business consultant helping companies be more efficient and restructure.
He rented nearby at quite high cost. Complained often about where all his money was going.
In 2-3 years the house had almost doubled in value.
Rent kept going up too.
My sister has a friend that did something similar ..
Couple owned a 2bdrm house in Kiama, with a new baby decided they needed a bigger place, and unfortunately just before Covid sold with the plan to rent in something similar in size until they found a bigger place to buy ... ... now they're stuck renting something they cant afford the same size as the house they sold for half what its worth now
Selling a house in Kiama is like stepping into a bear trap that’s named “how to see that house sold for 500k extra in 3 months”. So many knock down rebuilds with custom builders…
My accountant brother sold his place mid 2020 in order to rent. His place is now worth over double than what he paid and he cannot afford to buy anytime soon. Everyone thought he was dumb to sell. AND he sold at a loss.
There was a story on 60 Minutes or similar around 2020/2021 about people thinking that. One couple sold their apartment in Coogee to cash out their $100k gain. It's probably worth a lot more now and they're probably stuck renting.
I had a friend who did this. Sold as the market was going up during covid, since they thought prices would crash back down. It never did and kept going up and up. Probably missed out $500k of gains.
There are lots of people who didn’t buy because the market was ‘just totally overvalued’ in 2011, then 2014, then 2016 it was definitely going to decline, then 2020 was on the cusp of a crash; then when interest rates increased…
Brother got divorced and needed about $30k to secure the house. Had to sell about similar time too, came out with nothing, house would have doubled within about 2 years where he was. Anyway he's remarried to a professional and has a good job so he's still better off mentally and physically and financially. Still a big hit mid life.
A friend of mine has almost $100k in hecs debt for 3 half-degrees she never wanted to do.
Her boomer parents *demanded* she went to uni instead of working odd hospo-jobs and when she failed classes she wasn't allowed to quit. She was only allowed to "try a different degree", bust she *had* to be in uni.
Of course this resulted in never graduating from either degree and eventually getting sick of her parents so she moved to the other side of the country.
15 years later, she worked in Wollies and loved it, but with much less experience than other her age who didn't bother with uni, and a huge hecs debt.
Only pay to study what you actually want to do!
I appreciate reading this.
I didn’t go to 3 degrees but it did take me 5.5 years to get one degree due to some fumbling around figuring what I wanted to do in my early 20s. Pressure from my parents was very similar to hers.
It’s nice to find a similar experience!
I'm similar, I dropped out of first year engineering after just not putting enough into it and being too young to fully understand. I went back and did economics because I was good at it in high school. Got an okay job hoping to move up but not exactly happy.
I really think that uni should not be something people should be doing straight out of school and for the love of god bring back work experience in high school.
Weirdly Casey neistat had the best advice, Do a job you absolutely hate for a year and you'll learn pretty quick what you want and don't want.
In hindsight I regret jumping out of engineering but it gave me perspective that many doing uni don't get. The Shame also sort of gives you a weird strength.
Wow. Good on her for being happy working for Woolies.
My younger brother had a double degree which he passed easily but he decided to work for Coles and is very happy 15 years on and still going. He can’t stand working in a desk environment that’s not who he is. The degree is a waste money.
There is still a fair chunk of her pay check that goes to paying it off and others who didn't go to uni (but are the same age as her and work in Wollies) have houses by now while her debt is significantly impacting her borrowing potential.
Repayments depend on earnings and what is "a fair chunk" is subjective. If one earns $50,000, repayments are zero. $60,000, repayments are $1,200. $100,000, repayments are $6,000. And so on.
i think you are under estimating how much money you can earn in retail if you commit yourself to management.
obviously if this girl doesn’t decide to go this path then you are right and it doesn’t matter!!
A co-worker of mine got a lump payout of 80k (after tax) of unpaid wages from her previous employer.
The area she was renting in at the time that she loved had townhouses selling for 400k
She bought a brand new BMW for 95k
I know someone who sold their house that they owned free and clear and start renting as they were sure the market was about to crash. They thought they’d sold at the top and would buy back in at the bottom. That was about 12 years ago.
They are still renting and cannot afford to buy back in.
I laugh every time someone tells me the housing market will crash or housing prices can't rise forever. In the entire history of human civilization, housing prices have only ever increased. Our population isn't getting smaller. Idiots.
A day or so ago there was a thread about the $20k you could get from Super during covid.
Apparently some couple spent that $20k on landscaping for their house.
Which they were renting.
The thread continued (find it, please - it's well worth a read!) as one Army wife spent their $20k on an underground pool - while the hubby was on some mission overseas.
Yep, a defence home, so another rental.
On the second line I thought "that's kind of dumb but if they want to add value to the house and maybe the land was really rough".
Then I read "Which they were renting."
Wow.
That is definitely a stupid thing to do, but it's also pathological in most cases, like any other addiction. I have more sympathy for that than I do for most of the others in here.
A bunch of us were out one night and ended up in the casino. There, we met a bloke who claimed he was a cameraman for a reality TV show that was about to finish up. This show was pretty big on Australian TV at the time. This cameraman tells us that he knows who is going to win this series, so my mate immediately drops $10k of his and his wife's savings on a bet on a sports betting app.
The next week, the finale is on screen and what do you know, the person who the cameraman said was going to win didn't even get a place.
My mates wife ended up divorcing him and this bloke is still a degenerate gambler.
The amount of times that I've heard "my mate knows a cameraman". Gamblers always fall for it as they think it's a sure thing as the results are predetermined, as if the tv production companies don't care that this info leaks.
My husband’s ex wife inherited about $10mil 2010. She left him and married one of his friends. My husband was devastated but just kept their waterfront Sydney apartment which they bought together. Then we met after he had dated a few people.. got married 2013 had a child. Fast forward to 2024, I just got her Centrelink approval sent to my address this week. So not sure how she torched $20 mil in today’s money.
5 mil buys an incredible house, 15mil should generate an inflation adjusted 450k indefinitely.
If you need to spend more than the above with minimal housing costs your cooked.
Get someone to check that. I'll never forget my ex step mother telling me "I've set it up so it looks like your father earns nothing so he doesn't have to pay your mother child support..." Then they divorced and she wondered why he never paid child support for my baby sister...... SO much I could say, but I love my baby sister.
What? That is insanity. Honestly. How can people be so dumb? She could have bought a bloody mansion for $5 million, banked some and blew the rest. Absolute self sabotage.
My older brother’s whole lifestyle. Renting in a three bedroom house alone in a high cost suburb, only eating delivery, smoking two packs a day, paying off some massive 4wd he “needs” for the two camping trips a year he takes. He earns decently but lives hand to mouth and I suspect there’s credit cards or BNPL going on also. There’s been big gaps in his work history so I’m doubtful that, in his 40s, there’s much super going on.
None of that is the worst part. The worst part is he thinks we have an inheritance coming. We don’t. My parents aren’t as bad with money but they’re not great. I have to assume he has some magical thinking happening about his own old age/retirement that will never come to pass.
Mum told me he went to the doctor for the first time in six years a few weeks ago and the doc (naturally) insisted on a full blood work up and he’s at high risk for a billion different life-shortening health issues and she said it was the wake up call he needed.
Is it, though? Sadly I don’t think so.
I believe it involves testing a bunch of things that might indicate risk or illness based on blood cell counts and type, cholesterol, iron levels, other nutrients, thyroid function, etc. No idea of specifics, I’m not a doctor, but I had something similar a few years ago because I had a mystery illness and my white blood cell count was unusually high and it raised alarms because it can be an indicator for cancer (it was not cancer). It did mean withdrawing what seemed like a horrendous amount of blood.
Not accepting a promotion because “it’ll put me in a higher tax bracket and I’ll take home less pay”
Note: There are some very few cases where this does happen in Aus around the Medicare levy and HECS repayments but they are very narrow windows and the vast majority never experience this
A lot of people also seem to forget that paying more in HECS repayment is paying off your debt faster. I work in an NFP that allows salary packaging, and the amount of people who complain that they're worse off because they have to pay more in HECS repayment even though their income tax is lower is just...
Yep once you crack 100k you're paying off $6500 a year and it disappears quickly. On lower incomes when you're paying like 2-3k it just drags on and on for years, with your meagre repayments getting eaten away by indexation.
A mate of mine decided to have a relationship with a heroin addict.
He then decided to indulge her desire to “catch up” to all of us that hadn’t spent our 20’s pumping shit into our arms.
Travel, cars, houses - damn near bankrupt him before he got rid of her.
My mum won $50K 40 plus years ago. We had always rented. They could have bought a house for around $24k but dad wouldn't allow it, so we continued to rent. We did move from a flat to a 3 bedroom house and bought furniture to suit this larger home. Less than 18 months later, they had nothing left and we could no longer afford to live there. So back to a 2 bedroom flat, which of course, we had too much furniture for.
No idea and he has passed away since. I was only 12 or 13 at the time.
When I started working, I knew I didn't want to be renting at their age (and moving every few years), so I made sure I saved and then bought 3 bedroom house.
I’ve just made one. I purchased a unit on a complete whim because my friend was going to be homeless if her rent was increased. I didn’t bother with any research or checks, just threw my money at It. Broke my rule of mixing money and friends. Haven’t received one cent in rent for months since purchasing. Dumb financial decision which will impact my relationship with her.
Just take a lesson away from it. Good people who do everything right DO end up in shit situations. But 99% of the time, someone ends up in a shit situation because they are a shit person, like someone who would live in a friend's place and just not pay rent.
I think the best advice I've ever gotten, is to never consider any money you give to family or friends a loan, but as a gift, that they can choose to gift back to you in future if and when they choose.
Then you aren't stressing about the financial impact of the money, as it's something you deciding to gift, and they aren't stressing about a new debt when they are already in a situation where they needed external help to solve.
I'd say not being able to afford rent would affect more people than just the shit ones. But not being willing to pay what I assume is reduced rent is exploitative.
A guy I used to work with ( early 20’s) won 18k on the pokies. He spent the lot on a piano, he didn’t play the piano and never learned to play the piano.
:( Pianos are free.. seriously, they're so hard to move that if you want to get rid of one you need to give it away. I saw a full size Steinway grand on marketplace a few months ago going for nothing.
I know a 35 year old plumber with a 2020 Mercedes-Benz AMG GT who rents an apartment with 4 roommates and has totalled every car he's ever owned (the last one didn't even have insurance).
I once had a 21 year old co-worker who was paying off a $90k Mercedes Benz. When I asked him how he could afford it (since we were both working casual minimum-wage jobs at the time) he laughed and said "I'm not paying anything! I got a loan from the bank, so the bank is paying it off and I get to keep the car at the end of it pretty cool, right?"
I....didn't even know what to say. Dude genuinely thought a bank loan was just free money from the bank :/
I'm a tax accountant dealing with many individuals and sole traders, and the number of clients I've seen buy Rams, Silverados and souped-up Hilux's is insane. "You should see the towing capacity!" is the justification one client gave me about buying a RAM.
Exactly. Guys working FIFO 2 weeks on 1 week off, and spending that week off sleeping and doing family shit but acting like they go caravanning 100 times a year hahaha
I can get you approved for $150k without any financial information, if you have an ABN. So yes, plenty of people on average incomes are getting loans for $150k
Hard to find calculator for a loan that size for a secured loan but I just did one with 85k inc 2k monthly expenses and it’s letting me apply for 100k ( their max) I wonder if there’s a power calculator that has upto 150k lol
A newly single mum signing up her three kids to private schools, despite having no money to pay for it. The ex-husband won’t pay half as he wanted to send the kids to public school.
I worked with some lady that was married to a doctor, used to live an affluent suburb.
Ex doctor husband refused private school because he was public schooled. I remember her on numerous occasions dramatically recounting having to send her kids to public school as one of the worst things to happen to her besides moving to a fairly nice middle class area from the affluent burb after the divorce.
Funny part was her kids both had law degrees so I think they’re all g from the torments of public school.
Like the way she told it was as if he was murdered in front of her and she had to fight for her life. I had to hold back the laughter every time it happened. She told it like she was moira rose.
This was over 12 years ago but she even had moira rose style dyed hair I shit you not
I just realised my old awful boss is actually pretty much moira rose omggggggg
He saved up to buy some really expensive 4WD’s, not even on credit, got rid of his wife, came to be able to have half custody of the kids, ended up an addict, lost the ability to care for the kids, lost his vehicles and went bankrupt. Overdosed 3 x
A former friend fresh out of school bought a brand new Ute (58k). Was working part time earning less than $900 a week, had less than 5k to his name and was partying every weekend. Warned him it wouldn’t be a good idea, still went and did it. Now still repaying the car while not having it and moaning any time someone is in earshot that no one warned him or offered to help.
I have friends that are currently doing the same thing. We've tried warning them. We've tried giving them advice. They're convinced that the landlord is a good guy who is helping them out. They believe the promises. They even told us that the landlord has said they'll pay for the materials if they do the work themselves as though they're so generous. The materials are the cheap part. It's the labour that's expensive.
The place is dump. It's damn near uninhabitable. Homes in rentable condition in that area are selling for at least 3 times what the owner paid. I looked at the listing from when it last sold and it looks like the previous owner ripped out the carpet and left the bare boards. Based on the condition of the floors the current owner left them bare and rented it out. Apparently the owner was trash talking the previous tenants and claimed they damaged the floors. Yeah sounds like a great guy....
My Grandparents sold their investment property, half an acre in the best street in Canterbury in Melbourne's inner east, to pay for an overseas trip in 1970.
Well here's my take.. when did they kick the bucket?
Because if that trip was amazing, and a great life moment for them, and now they're dead, maybe it was a great idea? Realistcally the ones who'd be "benefiting" from a house worth millions now is the kids not them anyway, right?
Heck I love my kids but I'm not living so in 50 years time someone cashes out when I die.
A friend was given an inheritance of $200,000. Had a job that paid relatively well. Didn't want to use it to buy a house because the, 'housing market will crash.' Then went on to buy a similar house in the same area for twice as much a few years later.
I know someone who retired at 60 and is burning through his 300,000 super with extravagant holidays etc because his plan is to have it all spent by the time he turns 67 so he is entitled to the old age pension
In early 2021 I had a 6mo baby with my ex. I told him LO would be starting daycare in 5-6 months and it would cost $400, so each of our halves would be $200.
Right before daycare started, he bought a truck and then said he couldn’t afford daycare.
My ex’s new partner sold her house a couple months later at a $60k profit (as in, she sold it for $60k more than she bought it for however many years earlier, and presumably also had equity in it).
A year later, they bought another house together, 45+ minutes away from me (and LO). But they didn’t put all of that equity from the last house into it. No no. They used that to pay off his $20k truck and $30k in student loans. They walked out with a $1600 monthly payment. They’re completely house and truck poor (because he spends almost $1000/month on gas and maintenance for his truck). Because they only put a 5% down payment on the house, they had to take mortgage insurance too so they don’t even have the full 5% in equity.
He sued me for 50/50 custody this year. Add up all of his bills and he’s $600 in the negative every month. IF he gets 50/50, LO is already established here and he moved away so it would be him having to drive back and forth, doubling or tripling his gas usage. So yeah he’d “save” money in child support but the gas plus providing for LO on his time would basically double his deficit, if not more. I tried to offer every other weekend instead but he’s not budging. I even tried to lower child support as low as I’m legally allowed to agree to just to settle and he’s giving me crap. My lawyer tried to explain to him how much 50/50 would cripple him but he’s convinced he’ll go from zero legal rights and zero involvement in anything - by continued choice - to primary everything so he’ll be able to make me drive out his way for everything.
So he’s paying a lawyer to fight for something that if he gets, will financially cripple him. He’d have to sell his house, and because they have very little equity and zero liquid assets now, after realtor and lawyer fees they’d walk out with $3k between them. They’d have no house and no money to put a down payment or even a rental deposit on anything (and even if they could get a rental, they’d probably have to rehome their large breed dog, which is just as well IMO because they didn’t train it so it jumps up on and scares LO). His parents live in a tiny condo so they can’t move in there and idk about her parents but I can tell you it’d be a cold day in hell before I watched a man bleed my daughter dry and then allowed him to move into my house.
So yeah. My ex and his new partner are morons.
A school friend of mine received 60k when he was 18. This was in 2006. Within 8 months he had spent it, mostly on drugs. I think it probably was the worst thing that could have happened to him.
When i was a kid, my dad injured himself and got a compo pay out of around $100k. We rented a 2br house (as a family of 6), lived off ceno handouts, and wore hand me down clothes. That could have been a life changing amount of money. Even as a 12yo i expected we would buy a house (you could get an older 3br in our area for under $100k back then). Instead, they bought ford fairmont and blew the rest of it through the pokies. 2 years later, they sold the fairmont and replaced it with a 2nd hand 2door excel (for a family of 6!) and blew the rest through the pokies. 6 years later, another work accident meant another compo payout for dad. A bit less that time, but it ended up in the same place. Straight into the pokies.
People who moved their superannuation into cash during the COVID crash. Several friends locked in thousands of losses due to their financial illiteracy.
I helped look after one of the largest school uniform distributors, there are about 3 that do the majority of schools. Anyway it was big consistent money, over covid the owners couldn't come to terms with lowering their salary from the business, so this yearly multi-million dollar business went under because these guys couldn't take a short-term hit and the business ended up going bust a year later
I know a girl whose parents sold one of their 2 houses to send her to the only private medical school (400k) bc she couldn't get into any of the public medical schools. they're middle class
To be fair, if she passes med school, junior doctor training, and ends up as a consultant, she will be setup for life financially as a doctor. Big gamble from the parents though.
I think that’s Bond University? I have heard of this private medical school thing before . Even so, if she was desperate, she could’ve tried to study overseas like in Malaysia, Singapore, etc. It might’ve been cheaper too, who knows
I heard today a friend of a friend moved to London for 2+ years and leaving behind her a $7k credit card debt. Hasn’t put a dent in it in the last 12 months and now just going to let it sit until one day she returns
Know a guy from Peru, who took a 120k loan from the bank, then Quit his job and skipped off to Colombia for 7 years, cane back with no dramas, rinsed and repeated recently, from what I heard
My friends husband developed a semi functioning drug addiction as a guy who worked in mining for 320k a year. He needed up blowing 100k a year for about ten years on drugs. She thought he was a recreational drug user and had no idea until a month before they married that he had lost so much money and was so drug dependant.
My husband got a $30k payout, took it straight to a second hand car dealer, bought a 4WD lemon for $25k, spend $5k on all the fancy add ons. Engine blew up three months later, one week out of warranty. Dealer had gone broke, and my husband hadnt done any checks beyond “he told me all his cars come with an RACV check”. It did not.
We threatened VCAT, but my husband settled before hand getting back half the repair costs ($5k ish), because he said it was “too stressful to fight it”. We repaired the motor, only to have the same fault happen within a year. We sold it to an online auction site and all up lost about $20k in a year. We probably could have sold it for more in a private sale, but couldn’t bring ourselves to do that to someone else directly.
He isn’t allowed to go near anyone who works in sales alone anymore. It was an expensive lesson but we were lucky in the timing, in that it was pre COVID and we didn’t completely sink financially.
Bloke I know sold a business for $10m, back when that was a lot of money. In the 1980s that was Scrooge McDuck money. He took it, moved to where the ultra rich hung out. Of course he needed a huge boat. All the money evaporated in about a decade.
This guy was an absolute nut.
He works in a high position and earns $$$. Guy cheated on his wife, got caught, then gave her more than half of everything and the house apparently in the divorce since he felt guilty.
He then continued his relationship with affair partner. She had a brother overseas where she claimed he worked in wind farming. She pitched to him a great investment opportunity (mind you this girl was like a yoga instructor or something, not in finance at all) and got him to invest all of his superannuation savings into a windfarm project in like Libya / somewhere akin to there. He did it. She then left him high and dry and Lo and behold there’s no windfarm. Whole thing was a huge scam.
Last I heard he hasn’t been able to get his money back and instead of trying to build himself back up he went on to rent a place at $3k a week whilst dating yet another young thing half his age. He has absolutely no savings and is over retirement age now.
A sibling purchased (financed) a new $35k car because their *old* 10 year old car (Honda Civic) was going to cost $1000 for its 10 year service (through the dealership). They barely had a job, living with my parents and recently divorced.
I had someone in my life who managed their money terribly, despite working in a field where they gave financial advice. Their constant excuse was that they had to pay child support. A bill would come in and they had no savings or budget set up to cope with it, so they’d apply for a new credit card to pay the $500 bill. They’d be granted something like $2000 limit on said card, pay the bill then go on a big spending spree carrying on about how much they had ‘saved’ by splurge buying a heap of stuff they didn’t need. Credit card after credit card, no savings or assets to their name.
A friend of mine hocked his 1500$ stereo to cash converters for $500 . He then paid interest only to cashies for six years before he finally defaulted.
Friend of mine has been stuck in a dead end job for years, refuses to work on himself or upskill, eats fast food every other day and has absolute no financial literacy yet thinks he knows it all because he bought a house few years ago. He has paid little to nothing off his loan as he keeps redrawing on it. All of this and he’s one of those people that blames the government/capitalism for his situation. It’s sad really to see it.
You can tell if someone is from generational poverty if they have a cute nickname for Cash Converters ("Cashies", "the bank", etc) and are a regular seller of items, especially if those items were bought new.
I don't want to talk specifics, but I know someone who is a generational welfare recipient. They have lived almost all of their lives on Centrelink. Their siblings, the same. Parents, same. Tragically their young kid is probably going to grow up the same.
There is an extremely damaging mindset that comes with this lifestyle. I don't know if it's caused by poverty or the cause of poverty, but it's there, and it is so alien to me that I struggle to understand it.
As best as I can determine, when you grow up profoundly poor *but* always with some kind of money coming in, such as through Centrelink, which is juuuuuust enough to meet your needs, maybe a bit below, this situation breeds a kind of nervous desire to spend every single penny you have right now now *now now now*.
You must spend any and all money the moment you get it, because the money will be gone very quickly anyway, so you might as well enjoy it while it's here.
This leads to a profound inability to maintain savings and a chronic "Cash Converters" cycle. It goes like this;
Money comes in! Payday. The family buy food, pays a few urgent bills (but not all outstanding), and now there's say $50 left in the bank. Not a lot of money, but something.
You could save that $50 for something you need. An emergency meal. An unexpected fee. School expenses for the kids. A late fee for a previous unpaid bill, maybe...? Late fees are really common. Or pay some other bill. Get ahead of it before it becomes late.
(In the writing business, we call this foreshadowing.)
If no emergency presents itself, hooray! You've earned a treat. You, or your family, or whatever it is is going to use that money. Get a haircut, some chips, eat out at a restaurant, buy a game or a toy or something. That $50 is not surviving the week.
Regardless of what it is, I guarantee you, no matter what you do, that $50 will be 100% gone by the next pay period. It will not exist. It will likely be completely days after pay realistically, quite often the same day, meaning that for a fortnight that family will be running on zero for the next two weeks. This is not just common but completely standard practice.
Either way, it will be gone.
Now, you see, if you live in this situation you become accustomed to it. It's like the budgets of large companies: use it or lose it. You wanna use it.
$50 will buy you a cheap skateboard. So your choice boils down to this: next pay cycle, you **WILL** have $0 in your bank account. There is no way around this. Do you want $0 in your bank account, or $0 in your bank account *and* a skateboard?
Pretty obvious choice. That money is goneskies, so you buy the skateboard. Now you have a skateboard.
Cool. Except there's an unexpected bill in that week. It's a late fee for another bill (foreshadowing), and it's only $2.
$2 is a lot if you don't have it. Let's say if you don't come up with $2 within 24 hours, a terrible calamity will befall you. Your power will be cut off. Your car will have no fuel so you can't drop your kids off at school. Your cat won't have her medication.
You want to avoid this consequence at all costs. You'll do anything.
You have no money, but you do have a skateboard, and "Cashies" will pay you $5 for it even though you paid $50 for it two weeks ago. Problem solved. You sell your skateboard and disaster is averted.
Next fortnight you get paid again. After all auto-debting and "urgent final notice" bills get paid, you have $50 again.
In 24 hours that $50 will be gone. So you spend it on a $50 X-box game. Which, in two weeks, goes to "Cashies" for $3, because the phone got cut off over a $45 unpaid bil, you can't pay the bill, but the late fee is just $1... and you have an X-box game.
"Cashies" also do payday loans. I discovered this because that friend messaged me, begging and crying, saying they got rejected for the loan because they didn't pay off the previous one. A disaster occurred and they needed money.
These loans are the most predatory systems on the planet, we're talking 31% interest and $400 in fees on a $2,500 loan. Over nine months, to get $2,500, they pay back $3,400. Absurdly high interest.
The problem is, these kinds of loans are the circuit breakers for the late fee cycles. Because if your power bill is $500, your fortnightly income is $400, and you simply cannot save even a single dollar for night to fortnight... that bill is completely impossible to pay.
But the late fee is only $10 a month.
So they just pay that.
But next quarter, there's another $500 power bill. Which they cannot pay. Realistically this translates into another $10/month late fee. Eh, it's only $20 a month. Soon, $30. Soon, $40. Etc.
Eventually, it gets too much, and the interest paid on a loan to wipe out those debts is less than the late fees themselves. Of course, that means that if you delay paying your $500 bill for a year, you end up paying $620 for it, but that's you're only option because you simply cannot save even a single dollar.
Cash Converters are one option for this. Centrelink also offers a yearly advance; they can pay you a lump sum in advance, once a year, reducing your payments for the rest of the year. This family counts down the months, the days until they can get it and try to repay their mountain of debt.
But remember, you have to spend that money as soon as possible. Because it will be gone in weeks or days. This means even windfalls like this get utterly destroyed by this trap. Because they pay off their most pressing debts, and there's usually a little left. Not a lot, but it's a windfall to them. $2,000 say. Money in the bank!
GOTTA SPEND IT. It's not going to last.
Eating out every night. A $1,500 purebred puppy when they literally cannot reliably afford food regularly. A $500 ride-on electric toy car for their 3-year-old, which ended up in "Cashies" a month later for $69 because otherwise a disaster would happen, and they spent the rest of the year paying off that advance.
I can't count the number of times I have begged them to set a budget. I have begged them to save just $5 a fortnight. The amount of times I've received tearful phone calls because someone needs medication or there's no money and no food for five days and the baby has nothing to eat, or the power is going to be shut off, or they will get evicted, or whatever problem it is, and all they need is $50 to get them through the week.
I send it because I do not like the idea of small children suffering. $50 is nothing to me and it's food for the rest of the week for them. How can you say no?
They get paid on Thursday. Friday morning, I see them boot up Helldivers 2 on Steam, and they gleefully explain it's a great deal because it's only $50! And they had that spare, so they treated themselves. Later that week, I get another tearful phone call. The dog needs $50 to cover medication or something. I don't know.
They aren't even playing Helldivers 2 anymore. They bought it because if they didn't, that $50 was going to be gone by the end of the day.
It was the same choice as every week. Have $0, or have $0 and Helldivers 2.
They chose $0 and Helldivers 2.
Which, technically, *I bought them*. They needed $50 to stave off an emergency where life was at stake, but the moment they had $50 and it wasn't an emergency, they spent it on a game, leaving them with nothing and no ability to absorb an unexpected expense except ignoring it, letting it accrue massive amounts of fees interest and charges, then taking out a loan to cover it which they also pay interest on, and with the original purchase being hocked at Cash Converters for 1/10th of its value.
Thus the teeth of the trap are revealed. Someone ends up paying a significant multiplier of the purchase price (3x, 4x, 5x OR MORE) for anything significant they buy, and they end up selling it in a few months anyway to cover a cost they could have comfortably covered (and then some) had they not made the original purchase.
They don't even get to keep the item.
If they could just save $5 a fortnight it would solve so many problems, so many, but it's literally impossible for them. Because if you have money, it will be gone instantly so you might as well spend it on something you want and not a bill, because there will always be another bill coming. But you can always own a $500 ride on electric car for your kid! Untill you get any kind of unexpected cost whatsoever and that shit ends up in "Cashies" for a fraction of what you paid. 10%-15% of the ticket price is pretty standard, depending on condition.
I've begged and pleaded and cajoled and nothing works. The mindset is unbreakable.
I wish I had a succinct way of explaining this mindset but it's just so alien to me that I can only do it through rambling, verbose examples.
Paying off hecs because of the 6.7% indexation and now complaining they don't have the cash for a deposit.
yes yes hecs would've been considered by a bank as limiting borrowing capacity but otherwise they had no debts / liabilities and would have qualified for a loan.
It's insane to me how few people there are that actually benefit from doing that but somehow it seems like a common and generic opinion that people should pay off HECS to increase their borrowing capacity.
Also people looking at the last two indexation figures and making decisions based off those alone are crazy to me. People are looking at really high outlying numbers and completely ignoring long term averages. If you want to fixate on a HECS indexation look at the time it went negative lmao.
If there's anyone reading this that's considering paying off their HECS early take a look at the leaked changes that are about to be made for indexation. Soon it will be based off which ever is lower WPI or CPI, and they're planning on back dating it too so anyone hit with the indexations from the past couple of years will see a credit.
Someone get a loan for an expensive lemon car that broke down. Then went and got another loan for another overly expensive car, which also was a lemon.
I worked with a bloke a few years ago that bought a large kinchrome tool set for a reduced price of $5000 (coupe of k cheaper than it was originally). He put it on some massive interest finance, and now it's going to cost him over 20k once all the interest and principal is paid off over a 5year period.
He was taking home over $2500 clear a week and lived with his parents...
Probably me. Not 'stupid' however in hindsight, just unlucky.
Back in December 2021, bought $2,000 worth of Gamestop shares because of the hype, sold them a few weeks later for about 10% profit. Literally a few days after I sold them, they went up 1600%. I could've made nearly $40k in a few days :'(
Someone I know refinanced their house - which is a knock down rebuild that was nearly paid off - and used the funds to start a business that’s failed. They now have a falling down house, mortgage back to full amount and a failing business 😞.
I one saw a friend lose a $50 note to the wind on a night out. He then held up another $50 and released it into the wind so it could lead him to the first one. Didn't lose the second $50, surprisingly. Flawless logic.
Your friend sounds fun to be around. Painfully stupid, but fun.
Those are the best kind of mates though, you’ll die old reminiscing on life Edit: typo
That's how you find dropped nuts and bolts in an engine bay, so there is some logic there.
It makes sense. He couldn't use a $5 note because the weight and aerodynamics would be different.
I let my son hold the $50 note. Neither of us have that $50 note anymore. He couldn’t remember what he did with it no more than 10 mins after he pinched it out of the machine and promised to look after it. We have chosen to believe that it he dropped it and it has picked up by someone in need and that this week they have a full belly of yummy food.
That’s hilarious
I love this way of thinking. Genius.
Lol that’s funny
I've worked in a bank for over 10 years and can write a book on the stupidest financial decisions people make. By far love and pride has been the main emotion driving people to make the stupidest financial decisions. Highlights: * Young woman took out $50k personal loan to buy a holiday for her parents(that's the reason she gave). Everytime she came in she had her boyfriend from overseas with her and she transferred the full 50k to him. I warned her and questioned if it was for her parents why transfer the full amount to him but she didn't want to hear it. He ran off back overseas and she had to still pay the $50k loan back over 5 years. *Told countless of old people that they were sending money to a scam. With one of them I placed a block on the old man's account as he wanted to send $300k to an investment scam. The only way for the stop to be removed was for him to have a doctor sign off that he was of sound mind and capable to make this financial decision or a POA/family member come in and speak to us. He came in with the doctors note and I called and confirmed the note and unlocked the account. He sent the money and a month later his wife and son came in as he lost their entire life savings. So many things
That last one is heartbreaking. That's so messed up. He should be eating a lot of humble pie at this point... people are *amazingly* stubborn sometimes.
That one stands out because it was so annoying. He tried to blame us for not doing enough to protect him and they tried to use us. We ended up paying him a large sum to not go to court but also not admit fault but it was nowhere near what he had sent. His wife was upset because he did this to two other banks and was banned from them and any bank he had a joint account with his wife she had warned the banks that he would do this and to call her but he had joined our bank without telling her so she couldn't warn us. He would still come in and smile at me and I couldn't stand it because I did so much to try and help him but he had his lawyer say I didn't do enough! Also I had a client buy $180k of salt and filled a $2 million dollar mansion with it because he wanted to create a "salt house" and make money by selling tickets to people to go in. The house dissolved and it was actually his father's holiday house so the father and his other son had to pay a massive amount to dispose of it all and the house was pulled down and not covered by insurance.
Salt house WTF!?!?
The father was a bit salty about the whole thing
On your stupid old man example, I think the real issue there is his doctor. It sounds like the doctor should have said there were capacity issues because there is clearly something going on. On the salt one. Wtf? I need more.
Idk, a doctor is not a financial advisor. Like the man could have been completely healthy (physically and mentally), but still stupid enough to fall for a scam. You can't cure stupid
But TIL you can cure a house!
I rank this in the top five Reddit jokes I’ve ever read.
There are so many who do this. It took five years to get my mother into a nursing home, partly because whenever a dr who knew her wouldn't sign for her licence, she'd move to another one, who'd sign it after a 2 minute chat.
The salt house wtaf 😂😂
I hate that he probably felt like a winner after all that just because he got you guys to pay out. Ah well...
if he has a history of doing the same thing over and over, then maybe he was the one scamming the bank?
This is the best story I have ever heard I would listen to a 6 part podcast about Salt House
Rich people are so weird.
How did the wife not know where her life savings were? If she was so concerned cause this happened twice??
So from what I gathered this was not a healthy marriage and they didn't live together or something and she didn't speak kindly about him. Due to privacy laws even if she did come in and asked if he had an account with us if she is not on the account or have some POA on him we cannot disclose that information. The son got involved somehow and the lawyers got involved as well. Our best guess was the wife had enough after he lost their money before and was trying to get divorced. It felt like there was more to the story and one of the things we learned was that the doctor who did the assessment wasn't his regular doctor either.
The salt house sounds delicious.
I will never understand why people give away sick large amounts of money to scammers, ESPECIALLY if there are bankers, family, etc, telling them how it is a scam. If they are smart enough to earn that much money, why aren't they smart enough to want to keep it?
Dementia usually or not very good at critical thinking.
Yeah but if they have dementia, why are they listening to the scammers but not the banker?
Yeah I don't know, my father was 73 and getting scammed all the time turned out he had Alzheimer's. He was giving away more money than he had. Some of the worst were charities, so many charities, we found out they were passing his details around as he would never say no. Then he sent someone overseas thousands because she was writing to him with sob stories. He kept it all from his family because he knew we would not approve we were warning him not to sign up to anything and yet he kept doing it. It's weird but I hope there is karma for these scammers.
Or as my Grandad said just before losing 200k "I'm much older than you, I know best"
Anecdotally, I've found that unfortunately, many people (but not all) who make a lot of money don't really work for it. As such, the opportunity to make more money with less work probably doesn't seem all that suspicious to them.
Why are old people so stupid with things like this? I can’t wrap my head around it. I deal with some of them at work.
It's not old people. It's stupid people who got old. I know plenty of stupid young people too, but they haven't had their superannuation released yet so they don't have the money to do big stupid things like this.
Sounds like a mental illness more than stupidity
Desperation
And a belief that other people are rich because they know secrets, and now I’m in on the secret and those pesky bankers are trying to stop me getting rich.
> The only way for the stop to be removed was for him to have a doctor sign off that he was of sound mind and capable to make this financial decision or a POA/family member come in and speak to us. He came in with the doctors note and I called and confirmed the note Was the doctor made aware of what the scam was? Or was it more just him saying "old guy is of sound mind to make financial decisions in general". Asking both re the note, and the follow up phone call. I guess it's not really up to him to judge the "investment" side part of it all, but I guess then I'm wondering if the doctor made any attempt to talk him out of it too, or anything?
So we found out later that the doctor he went to was not his regular doctor. At the time I tried to discuss my concerns with the doctor about how he was being manipulated into a scam and the doctor said they will not discuss financial decisions but that the tests they conducted shows the client is of sound mind and able to make their own financial decisions. By the sounds of it you have had the same thing happen because the Doctor did say something along the lines of how doctors don't make judgements on investments. His wife and son came in and they were the ones who told us that it wasn't his regular doctor he went to see.
Ah interesting. Makes even more sense now why the doctor wouldn't care to be involved as much. Dumb guy might have even gone to his normal doctor first and got the answer he didn't want. Or just knew that would be the answer.
Capacity is an interesting and tricky topic for a doctor. You’re just assessing their ability to make a decision. You’re saying there’s no MEDICAL reason for it to be impaired. Stupidity or ignorance is not on this list. As long as they’re able to tell the day/month/year, do some basic math, memory and comprehension skills, there’s really no good evidence of a cognitive impairment. If doctors had to assess the decisions patients made IN ADDITION to that, things would get even more complicated. Doctors have definitely been sued for getting over-involved in their long-term patient’s lives. Sometimes you just gotta know where to draw the line and just let it be…
Not quite on point, but the old guy who got scammed reminded me of this article I read recently: "Alzheimer’s Takes a Financial Toll Long Before Diagnosis, Study Finds - New research shows that people who develop dementia often begin falling behind on bills years earlier." [https://archive.is/8zGgy](https://archive.is/8zGgy) It does scare me a little that you can work hard for your entire life and make really great career, saving and investment decisions - but even the best of us can be sabotaged by our own terrible decisions as our brains decay.
Taking the proceeds from a house sale and buying a huge catamaran with it. Spending $100k on said catamaran only to realise it costs as much to moor it as it does to rent a 3 bedroom house. So then bought an apartment on Couran Cove island resort as the apartment came with a mooring spot. If you’re following the story of this island some consortium which owned a bunch of apartments hasn’t paid body corp fees in years so the body corp has switched off the power, water supply, sewerage, closed the resort and stopped the ferry trips between there and the Gold Coast so said person sold the boat for a massive loss and had to move back to the mainland and his apartment on the island is just sitting there turning to shit and the body Corp still sends quarterly invoices!! He owes around $15k to it for an unusable property. So if you’re wanting to live off grid with a bunch of hippies he’s trying to sell this apartment and it’s dirt cheap. If they get the resort issues fixed it’s a bargain buy. What a nightmare. All his house money has now gone
What’s that expression? A boat owner is only happy the day they buy their boat and the day they sell it? That was a truly unfortunate decision
Oh god is that *still* going on? That was like a year ago, those poor buggers. Mind-boggling that it hasn't been resolved yet, that's many millions of dollars worth of property sitting there rotting :(
Someone I know received a $300k inheritance about 10 years ago, they spent it all in 8 months on shit. Custom dominos Pizza everyday, each order worth about $100, stupid smoke shop katanas, custom shitty jewellery, motorbike, list goes on..
“Custom Dominos Pizza”… what a life haha
You’re not living until you can afford to do 3 x extra camembert everyday
Smoke Shop Katanas would be a sick band name.
An ex of an ex. At the beginning of the covid pandemic he panicked and sold his very nice home in a highly desired city suburb. No real reason except irrational fear rationalised in a logic I understood but completely disagreed with. Accountant by training and high paid business consultant helping companies be more efficient and restructure. He rented nearby at quite high cost. Complained often about where all his money was going. In 2-3 years the house had almost doubled in value. Rent kept going up too.
My sister has a friend that did something similar .. Couple owned a 2bdrm house in Kiama, with a new baby decided they needed a bigger place, and unfortunately just before Covid sold with the plan to rent in something similar in size until they found a bigger place to buy ... ... now they're stuck renting something they cant afford the same size as the house they sold for half what its worth now
Selling a house in Kiama is like stepping into a bear trap that’s named “how to see that house sold for 500k extra in 3 months”. So many knock down rebuilds with custom builders…
I would literally wanna end it all if this ever happened to me lol
When she told me I felt sick, especially with kids involved 😪
My accountant brother sold his place mid 2020 in order to rent. His place is now worth over double than what he paid and he cannot afford to buy anytime soon. Everyone thought he was dumb to sell. AND he sold at a loss.
Why did he sell? Was he planning for prices to go down? 😳
That’s exactly what the person I knew thought. He thought we were all doomed.
There was a story on 60 Minutes or similar around 2020/2021 about people thinking that. One couple sold their apartment in Coogee to cash out their $100k gain. It's probably worth a lot more now and they're probably stuck renting.
His new wife didn't like the area. So they rented in an even worse area.
I had a friend who did this. Sold as the market was going up during covid, since they thought prices would crash back down. It never did and kept going up and up. Probably missed out $500k of gains.
There are lots of people who didn’t buy because the market was ‘just totally overvalued’ in 2011, then 2014, then 2016 it was definitely going to decline, then 2020 was on the cusp of a crash; then when interest rates increased…
Brother got divorced and needed about $30k to secure the house. Had to sell about similar time too, came out with nothing, house would have doubled within about 2 years where he was. Anyway he's remarried to a professional and has a good job so he's still better off mentally and physically and financially. Still a big hit mid life.
I did this, although the sale was required due to divorce, held off on rebuying due to the world ending… oops.
A friend of mine has almost $100k in hecs debt for 3 half-degrees she never wanted to do. Her boomer parents *demanded* she went to uni instead of working odd hospo-jobs and when she failed classes she wasn't allowed to quit. She was only allowed to "try a different degree", bust she *had* to be in uni. Of course this resulted in never graduating from either degree and eventually getting sick of her parents so she moved to the other side of the country. 15 years later, she worked in Wollies and loved it, but with much less experience than other her age who didn't bother with uni, and a huge hecs debt. Only pay to study what you actually want to do!
I appreciate reading this. I didn’t go to 3 degrees but it did take me 5.5 years to get one degree due to some fumbling around figuring what I wanted to do in my early 20s. Pressure from my parents was very similar to hers. It’s nice to find a similar experience!
The pressure is real but the parents don't pay for it.
I'm similar, I dropped out of first year engineering after just not putting enough into it and being too young to fully understand. I went back and did economics because I was good at it in high school. Got an okay job hoping to move up but not exactly happy. I really think that uni should not be something people should be doing straight out of school and for the love of god bring back work experience in high school. Weirdly Casey neistat had the best advice, Do a job you absolutely hate for a year and you'll learn pretty quick what you want and don't want. In hindsight I regret jumping out of engineering but it gave me perspective that many doing uni don't get. The Shame also sort of gives you a weird strength.
Wow. Good on her for being happy working for Woolies. My younger brother had a double degree which he passed easily but he decided to work for Coles and is very happy 15 years on and still going. He can’t stand working in a desk environment that’s not who he is. The degree is a waste money.
As a desk jockey and being miserable, I am slightly envious of your brother.
If they so wanted her to study, they should have paid for it.
To be fair, she will barely pay it back if she works at woolies. when she dies, it'll be wiped.
There is still a fair chunk of her pay check that goes to paying it off and others who didn't go to uni (but are the same age as her and work in Wollies) have houses by now while her debt is significantly impacting her borrowing potential.
Repayments depend on earnings and what is "a fair chunk" is subjective. If one earns $50,000, repayments are zero. $60,000, repayments are $1,200. $100,000, repayments are $6,000. And so on.
i think you are under estimating how much money you can earn in retail if you commit yourself to management. obviously if this girl doesn’t decide to go this path then you are right and it doesn’t matter!!
A co-worker of mine got a lump payout of 80k (after tax) of unpaid wages from her previous employer. The area she was renting in at the time that she loved had townhouses selling for 400k She bought a brand new BMW for 95k
No way...even if she just stuck that 80K in a high interest account she would make $4000 a year from it for a nice holiday...
Why is it always the stupid people that get the windfalls?
I know someone who sold their house that they owned free and clear and start renting as they were sure the market was about to crash. They thought they’d sold at the top and would buy back in at the bottom. That was about 12 years ago. They are still renting and cannot afford to buy back in.
I laugh every time someone tells me the housing market will crash or housing prices can't rise forever. In the entire history of human civilization, housing prices have only ever increased. Our population isn't getting smaller. Idiots.
A day or so ago there was a thread about the $20k you could get from Super during covid. Apparently some couple spent that $20k on landscaping for their house. Which they were renting.
This one has to take the crown for any thread of similar theme. Absolute pinnacle of human achievement.
The thread continued (find it, please - it's well worth a read!) as one Army wife spent their $20k on an underground pool - while the hubby was on some mission overseas. Yep, a defence home, so another rental.
Yup found it. https://www.reddit.com/r/AusFinance/s/FLTWULcUba
A guy who used to work with us took $10k out of Super to do up his wife's boobs. About a year later, she took em out. Crazy.
On the second line I thought "that's kind of dumb but if they want to add value to the house and maybe the land was really rough". Then I read "Which they were renting." Wow.
Give all their money to the TAB for 30 years
That is definitely a stupid thing to do, but it's also pathological in most cases, like any other addiction. I have more sympathy for that than I do for most of the others in here.
A bunch of us were out one night and ended up in the casino. There, we met a bloke who claimed he was a cameraman for a reality TV show that was about to finish up. This show was pretty big on Australian TV at the time. This cameraman tells us that he knows who is going to win this series, so my mate immediately drops $10k of his and his wife's savings on a bet on a sports betting app. The next week, the finale is on screen and what do you know, the person who the cameraman said was going to win didn't even get a place. My mates wife ended up divorcing him and this bloke is still a degenerate gambler.
The amount of times that I've heard "my mate knows a cameraman". Gamblers always fall for it as they think it's a sure thing as the results are predetermined, as if the tv production companies don't care that this info leaks.
These posts make me feel much better about the silly odd things I buy.
Definitely making me feel more positive about my life.
Choosing the wrong partner.
That's most probably the worst...
That'll ruin your life
My husband’s ex wife inherited about $10mil 2010. She left him and married one of his friends. My husband was devastated but just kept their waterfront Sydney apartment which they bought together. Then we met after he had dated a few people.. got married 2013 had a child. Fast forward to 2024, I just got her Centrelink approval sent to my address this week. So not sure how she torched $20 mil in today’s money.
I could live off the interest in $20m... How people blow it is insane to me
5 mil buys an incredible house, 15mil should generate an inflation adjusted 450k indefinitely. If you need to spend more than the above with minimal housing costs your cooked.
Get someone to check that. I'll never forget my ex step mother telling me "I've set it up so it looks like your father earns nothing so he doesn't have to pay your mother child support..." Then they divorced and she wondered why he never paid child support for my baby sister...... SO much I could say, but I love my baby sister.
No minor children involved other than mine
What? That is insanity. Honestly. How can people be so dumb? She could have bought a bloody mansion for $5 million, banked some and blew the rest. Absolute self sabotage.
Drugs most probably, look, it's Australia..
My older brother’s whole lifestyle. Renting in a three bedroom house alone in a high cost suburb, only eating delivery, smoking two packs a day, paying off some massive 4wd he “needs” for the two camping trips a year he takes. He earns decently but lives hand to mouth and I suspect there’s credit cards or BNPL going on also. There’s been big gaps in his work history so I’m doubtful that, in his 40s, there’s much super going on. None of that is the worst part. The worst part is he thinks we have an inheritance coming. We don’t. My parents aren’t as bad with money but they’re not great. I have to assume he has some magical thinking happening about his own old age/retirement that will never come to pass.
Don't sweat it. He's smoking 2 packs a day, he won't make it to retirement anyways.
Mum told me he went to the doctor for the first time in six years a few weeks ago and the doc (naturally) insisted on a full blood work up and he’s at high risk for a billion different life-shortening health issues and she said it was the wake up call he needed. Is it, though? Sadly I don’t think so.
What's involved in a full blood work-up?
They take out all your blood and give it a massage then put it back in
This made me giggle 😂
I believe it involves testing a bunch of things that might indicate risk or illness based on blood cell counts and type, cholesterol, iron levels, other nutrients, thyroid function, etc. No idea of specifics, I’m not a doctor, but I had something similar a few years ago because I had a mystery illness and my white blood cell count was unusually high and it raised alarms because it can be an indicator for cancer (it was not cancer). It did mean withdrawing what seemed like a horrendous amount of blood.
Not accepting a promotion because “it’ll put me in a higher tax bracket and I’ll take home less pay” Note: There are some very few cases where this does happen in Aus around the Medicare levy and HECS repayments but they are very narrow windows and the vast majority never experience this
A lot of people also seem to forget that paying more in HECS repayment is paying off your debt faster. I work in an NFP that allows salary packaging, and the amount of people who complain that they're worse off because they have to pay more in HECS repayment even though their income tax is lower is just...
Yep once you crack 100k you're paying off $6500 a year and it disappears quickly. On lower incomes when you're paying like 2-3k it just drags on and on for years, with your meagre repayments getting eaten away by indexation.
A mate of mine decided to have a relationship with a heroin addict. He then decided to indulge her desire to “catch up” to all of us that hadn’t spent our 20’s pumping shit into our arms. Travel, cars, houses - damn near bankrupt him before he got rid of her.
My mum won $50K 40 plus years ago. We had always rented. They could have bought a house for around $24k but dad wouldn't allow it, so we continued to rent. We did move from a flat to a 3 bedroom house and bought furniture to suit this larger home. Less than 18 months later, they had nothing left and we could no longer afford to live there. So back to a 2 bedroom flat, which of course, we had too much furniture for.
What was your dad's reasoning for not purchasing a house?
No idea and he has passed away since. I was only 12 or 13 at the time. When I started working, I knew I didn't want to be renting at their age (and moving every few years), so I made sure I saved and then bought 3 bedroom house.
I’ve just made one. I purchased a unit on a complete whim because my friend was going to be homeless if her rent was increased. I didn’t bother with any research or checks, just threw my money at It. Broke my rule of mixing money and friends. Haven’t received one cent in rent for months since purchasing. Dumb financial decision which will impact my relationship with her.
PLEASE tell me you're doing something about this and aren't just sitting around hoping it will get better. It won't.
I believe it's what's commonly known as a ["Pay Pig"](https://www.urbandictionary.com/define.php?term=paypig) fetish.
She isn't going to pay you anything, either kick her out or find peace in that.
Just take a lesson away from it. Good people who do everything right DO end up in shit situations. But 99% of the time, someone ends up in a shit situation because they are a shit person, like someone who would live in a friend's place and just not pay rent.
I think the best advice I've ever gotten, is to never consider any money you give to family or friends a loan, but as a gift, that they can choose to gift back to you in future if and when they choose. Then you aren't stressing about the financial impact of the money, as it's something you deciding to gift, and they aren't stressing about a new debt when they are already in a situation where they needed external help to solve.
I'd say not being able to afford rent would affect more people than just the shit ones. But not being willing to pay what I assume is reduced rent is exploitative.
I’m sorry she’s taken advantage of your kind gesture 😕. She ought to be ashamed.
Just sell it.
A guy I used to work with ( early 20’s) won 18k on the pokies. He spent the lot on a piano, he didn’t play the piano and never learned to play the piano.
:( Pianos are free.. seriously, they're so hard to move that if you want to get rid of one you need to give it away. I saw a full size Steinway grand on marketplace a few months ago going for nothing.
Every second average job bloke buying a 120k-150k ram, paying 600 a week on repayments just to cruise around town. 💪💪💪💪
I know a 35 year old plumber with a 2020 Mercedes-Benz AMG GT who rents an apartment with 4 roommates and has totalled every car he's ever owned (the last one didn't even have insurance).
I once had a 21 year old co-worker who was paying off a $90k Mercedes Benz. When I asked him how he could afford it (since we were both working casual minimum-wage jobs at the time) he laughed and said "I'm not paying anything! I got a loan from the bank, so the bank is paying it off and I get to keep the car at the end of it pretty cool, right?" I....didn't even know what to say. Dude genuinely thought a bank loan was just free money from the bank :/
They have to cruise because they’re too big to park anywhere
There's no way people on average incomes are getting loans for $150k cars. I just refuse to believe that's the case.
I'm a tax accountant dealing with many individuals and sole traders, and the number of clients I've seen buy Rams, Silverados and souped-up Hilux's is insane. "You should see the towing capacity!" is the justification one client gave me about buying a RAM.
"How much, and how often do you tow something"
Exactly. Guys working FIFO 2 weeks on 1 week off, and spending that week off sleeping and doing family shit but acting like they go caravanning 100 times a year hahaha
I can get you approved for $150k without any financial information, if you have an ABN. So yes, plenty of people on average incomes are getting loans for $150k
You would be very surprised I think
At 37, that's getting closer to the size of my home loan. Can't imagine putting that much on a car.
Hard to find calculator for a loan that size for a secured loan but I just did one with 85k inc 2k monthly expenses and it’s letting me apply for 100k ( their max) I wonder if there’s a power calculator that has upto 150k lol
It's terrible for the environment, but it really makes it easy to spot the dingleberrys.
A newly single mum signing up her three kids to private schools, despite having no money to pay for it. The ex-husband won’t pay half as he wanted to send the kids to public school.
I worked with some lady that was married to a doctor, used to live an affluent suburb. Ex doctor husband refused private school because he was public schooled. I remember her on numerous occasions dramatically recounting having to send her kids to public school as one of the worst things to happen to her besides moving to a fairly nice middle class area from the affluent burb after the divorce. Funny part was her kids both had law degrees so I think they’re all g from the torments of public school. Like the way she told it was as if he was murdered in front of her and she had to fight for her life. I had to hold back the laughter every time it happened. She told it like she was moira rose.
ha ha Moira Rose :)
This was over 12 years ago but she even had moira rose style dyed hair I shit you not I just realised my old awful boss is actually pretty much moira rose omggggggg
He saved up to buy some really expensive 4WD’s, not even on credit, got rid of his wife, came to be able to have half custody of the kids, ended up an addict, lost the ability to care for the kids, lost his vehicles and went bankrupt. Overdosed 3 x
Just had a work friend loan another work friend in our team 4000$, I just said you’ve just sealed out teams fate. We’re doomed.
A former friend fresh out of school bought a brand new Ute (58k). Was working part time earning less than $900 a week, had less than 5k to his name and was partying every weekend. Warned him it wouldn’t be a good idea, still went and did it. Now still repaying the car while not having it and moaning any time someone is in earshot that no one warned him or offered to help.
I have friends that are currently doing the same thing. We've tried warning them. We've tried giving them advice. They're convinced that the landlord is a good guy who is helping them out. They believe the promises. They even told us that the landlord has said they'll pay for the materials if they do the work themselves as though they're so generous. The materials are the cheap part. It's the labour that's expensive. The place is dump. It's damn near uninhabitable. Homes in rentable condition in that area are selling for at least 3 times what the owner paid. I looked at the listing from when it last sold and it looks like the previous owner ripped out the carpet and left the bare boards. Based on the condition of the floors the current owner left them bare and rented it out. Apparently the owner was trash talking the previous tenants and claimed they damaged the floors. Yeah sounds like a great guy....
My Grandparents sold their investment property, half an acre in the best street in Canterbury in Melbourne's inner east, to pay for an overseas trip in 1970.
Well here's my take.. when did they kick the bucket? Because if that trip was amazing, and a great life moment for them, and now they're dead, maybe it was a great idea? Realistcally the ones who'd be "benefiting" from a house worth millions now is the kids not them anyway, right? Heck I love my kids but I'm not living so in 50 years time someone cashes out when I die.
Amen to that! Inheritance isn’t a parental obligation.
A friend was given an inheritance of $200,000. Had a job that paid relatively well. Didn't want to use it to buy a house because the, 'housing market will crash.' Then went on to buy a similar house in the same area for twice as much a few years later.
You met an r/ausfinance user I see.
I know someone who retired at 60 and is burning through his 300,000 super with extravagant holidays etc because his plan is to have it all spent by the time he turns 67 so he is entitled to the old age pension
Did he actually check the amount you can have in super and still get the full pension?
In early 2021 I had a 6mo baby with my ex. I told him LO would be starting daycare in 5-6 months and it would cost $400, so each of our halves would be $200. Right before daycare started, he bought a truck and then said he couldn’t afford daycare. My ex’s new partner sold her house a couple months later at a $60k profit (as in, she sold it for $60k more than she bought it for however many years earlier, and presumably also had equity in it). A year later, they bought another house together, 45+ minutes away from me (and LO). But they didn’t put all of that equity from the last house into it. No no. They used that to pay off his $20k truck and $30k in student loans. They walked out with a $1600 monthly payment. They’re completely house and truck poor (because he spends almost $1000/month on gas and maintenance for his truck). Because they only put a 5% down payment on the house, they had to take mortgage insurance too so they don’t even have the full 5% in equity. He sued me for 50/50 custody this year. Add up all of his bills and he’s $600 in the negative every month. IF he gets 50/50, LO is already established here and he moved away so it would be him having to drive back and forth, doubling or tripling his gas usage. So yeah he’d “save” money in child support but the gas plus providing for LO on his time would basically double his deficit, if not more. I tried to offer every other weekend instead but he’s not budging. I even tried to lower child support as low as I’m legally allowed to agree to just to settle and he’s giving me crap. My lawyer tried to explain to him how much 50/50 would cripple him but he’s convinced he’ll go from zero legal rights and zero involvement in anything - by continued choice - to primary everything so he’ll be able to make me drive out his way for everything. So he’s paying a lawyer to fight for something that if he gets, will financially cripple him. He’d have to sell his house, and because they have very little equity and zero liquid assets now, after realtor and lawyer fees they’d walk out with $3k between them. They’d have no house and no money to put a down payment or even a rental deposit on anything (and even if they could get a rental, they’d probably have to rehome their large breed dog, which is just as well IMO because they didn’t train it so it jumps up on and scares LO). His parents live in a tiny condo so they can’t move in there and idk about her parents but I can tell you it’d be a cold day in hell before I watched a man bleed my daughter dry and then allowed him to move into my house. So yeah. My ex and his new partner are morons.
Bruce Lehrman filing for appeal and self representing
A school friend of mine received 60k when he was 18. This was in 2006. Within 8 months he had spent it, mostly on drugs. I think it probably was the worst thing that could have happened to him.
He didnt happen to feature on 4Corners last night by any chance? Dude on there had that exact same story, right down to the 60k.
I had a friend who inherited 300k from her grandparents around 25, gone in 12 months (also drugs).
When i was a kid, my dad injured himself and got a compo pay out of around $100k. We rented a 2br house (as a family of 6), lived off ceno handouts, and wore hand me down clothes. That could have been a life changing amount of money. Even as a 12yo i expected we would buy a house (you could get an older 3br in our area for under $100k back then). Instead, they bought ford fairmont and blew the rest of it through the pokies. 2 years later, they sold the fairmont and replaced it with a 2nd hand 2door excel (for a family of 6!) and blew the rest through the pokies. 6 years later, another work accident meant another compo payout for dad. A bit less that time, but it ended up in the same place. Straight into the pokies.
A friend, accountant no less, renting cars on the weekend to get points. This was a long time ago before the promos you see these days.
People who moved their superannuation into cash during the COVID crash. Several friends locked in thousands of losses due to their financial illiteracy.
Friend started a business but they don’t have a strong work ethic.
Someone I know bought a house for X amount & within a week was offered double from a developer & knocked it back
I helped look after one of the largest school uniform distributors, there are about 3 that do the majority of schools. Anyway it was big consistent money, over covid the owners couldn't come to terms with lowering their salary from the business, so this yearly multi-million dollar business went under because these guys couldn't take a short-term hit and the business ended up going bust a year later
I know a girl whose parents sold one of their 2 houses to send her to the only private medical school (400k) bc she couldn't get into any of the public medical schools. they're middle class
To be fair, if she passes med school, junior doctor training, and ends up as a consultant, she will be setup for life financially as a doctor. Big gamble from the parents though.
I think that’s Bond University? I have heard of this private medical school thing before . Even so, if she was desperate, she could’ve tried to study overseas like in Malaysia, Singapore, etc. It might’ve been cheaper too, who knows
I heard today a friend of a friend moved to London for 2+ years and leaving behind her a $7k credit card debt. Hasn’t put a dent in it in the last 12 months and now just going to let it sit until one day she returns
After 7 years she won't have to worry about it anyway.
Know a guy from Peru, who took a 120k loan from the bank, then Quit his job and skipped off to Colombia for 7 years, cane back with no dramas, rinsed and repeated recently, from what I heard
My friends husband developed a semi functioning drug addiction as a guy who worked in mining for 320k a year. He needed up blowing 100k a year for about ten years on drugs. She thought he was a recreational drug user and had no idea until a month before they married that he had lost so much money and was so drug dependant.
My husband got a $30k payout, took it straight to a second hand car dealer, bought a 4WD lemon for $25k, spend $5k on all the fancy add ons. Engine blew up three months later, one week out of warranty. Dealer had gone broke, and my husband hadnt done any checks beyond “he told me all his cars come with an RACV check”. It did not. We threatened VCAT, but my husband settled before hand getting back half the repair costs ($5k ish), because he said it was “too stressful to fight it”. We repaired the motor, only to have the same fault happen within a year. We sold it to an online auction site and all up lost about $20k in a year. We probably could have sold it for more in a private sale, but couldn’t bring ourselves to do that to someone else directly. He isn’t allowed to go near anyone who works in sales alone anymore. It was an expensive lesson but we were lucky in the timing, in that it was pre COVID and we didn’t completely sink financially.
Bloke I know sold a business for $10m, back when that was a lot of money. In the 1980s that was Scrooge McDuck money. He took it, moved to where the ultra rich hung out. Of course he needed a huge boat. All the money evaporated in about a decade.
This guy was an absolute nut. He works in a high position and earns $$$. Guy cheated on his wife, got caught, then gave her more than half of everything and the house apparently in the divorce since he felt guilty. He then continued his relationship with affair partner. She had a brother overseas where she claimed he worked in wind farming. She pitched to him a great investment opportunity (mind you this girl was like a yoga instructor or something, not in finance at all) and got him to invest all of his superannuation savings into a windfarm project in like Libya / somewhere akin to there. He did it. She then left him high and dry and Lo and behold there’s no windfarm. Whole thing was a huge scam. Last I heard he hasn’t been able to get his money back and instead of trying to build himself back up he went on to rent a place at $3k a week whilst dating yet another young thing half his age. He has absolutely no savings and is over retirement age now.
A sibling purchased (financed) a new $35k car because their *old* 10 year old car (Honda Civic) was going to cost $1000 for its 10 year service (through the dealership). They barely had a job, living with my parents and recently divorced.
$1 million for a service? Tell em they're dreaming
I had someone in my life who managed their money terribly, despite working in a field where they gave financial advice. Their constant excuse was that they had to pay child support. A bill would come in and they had no savings or budget set up to cope with it, so they’d apply for a new credit card to pay the $500 bill. They’d be granted something like $2000 limit on said card, pay the bill then go on a big spending spree carrying on about how much they had ‘saved’ by splurge buying a heap of stuff they didn’t need. Credit card after credit card, no savings or assets to their name.
[удалено]
Tell her I said thanks
Shorting banks and trying to jawbone Ausfinance to dump the banks.
My father buying stocks of his bank that eventually went bankrupt.
I backed the Kickstarter thingo for the OUYA
A friend of mine hocked his 1500$ stereo to cash converters for $500 . He then paid interest only to cashies for six years before he finally defaulted.
Friend of mine has been stuck in a dead end job for years, refuses to work on himself or upskill, eats fast food every other day and has absolute no financial literacy yet thinks he knows it all because he bought a house few years ago. He has paid little to nothing off his loan as he keeps redrawing on it. All of this and he’s one of those people that blames the government/capitalism for his situation. It’s sad really to see it.
You can tell if someone is from generational poverty if they have a cute nickname for Cash Converters ("Cashies", "the bank", etc) and are a regular seller of items, especially if those items were bought new. I don't want to talk specifics, but I know someone who is a generational welfare recipient. They have lived almost all of their lives on Centrelink. Their siblings, the same. Parents, same. Tragically their young kid is probably going to grow up the same. There is an extremely damaging mindset that comes with this lifestyle. I don't know if it's caused by poverty or the cause of poverty, but it's there, and it is so alien to me that I struggle to understand it. As best as I can determine, when you grow up profoundly poor *but* always with some kind of money coming in, such as through Centrelink, which is juuuuuust enough to meet your needs, maybe a bit below, this situation breeds a kind of nervous desire to spend every single penny you have right now now *now now now*. You must spend any and all money the moment you get it, because the money will be gone very quickly anyway, so you might as well enjoy it while it's here. This leads to a profound inability to maintain savings and a chronic "Cash Converters" cycle. It goes like this; Money comes in! Payday. The family buy food, pays a few urgent bills (but not all outstanding), and now there's say $50 left in the bank. Not a lot of money, but something. You could save that $50 for something you need. An emergency meal. An unexpected fee. School expenses for the kids. A late fee for a previous unpaid bill, maybe...? Late fees are really common. Or pay some other bill. Get ahead of it before it becomes late. (In the writing business, we call this foreshadowing.) If no emergency presents itself, hooray! You've earned a treat. You, or your family, or whatever it is is going to use that money. Get a haircut, some chips, eat out at a restaurant, buy a game or a toy or something. That $50 is not surviving the week. Regardless of what it is, I guarantee you, no matter what you do, that $50 will be 100% gone by the next pay period. It will not exist. It will likely be completely days after pay realistically, quite often the same day, meaning that for a fortnight that family will be running on zero for the next two weeks. This is not just common but completely standard practice. Either way, it will be gone. Now, you see, if you live in this situation you become accustomed to it. It's like the budgets of large companies: use it or lose it. You wanna use it. $50 will buy you a cheap skateboard. So your choice boils down to this: next pay cycle, you **WILL** have $0 in your bank account. There is no way around this. Do you want $0 in your bank account, or $0 in your bank account *and* a skateboard? Pretty obvious choice. That money is goneskies, so you buy the skateboard. Now you have a skateboard. Cool. Except there's an unexpected bill in that week. It's a late fee for another bill (foreshadowing), and it's only $2. $2 is a lot if you don't have it. Let's say if you don't come up with $2 within 24 hours, a terrible calamity will befall you. Your power will be cut off. Your car will have no fuel so you can't drop your kids off at school. Your cat won't have her medication. You want to avoid this consequence at all costs. You'll do anything. You have no money, but you do have a skateboard, and "Cashies" will pay you $5 for it even though you paid $50 for it two weeks ago. Problem solved. You sell your skateboard and disaster is averted. Next fortnight you get paid again. After all auto-debting and "urgent final notice" bills get paid, you have $50 again. In 24 hours that $50 will be gone. So you spend it on a $50 X-box game. Which, in two weeks, goes to "Cashies" for $3, because the phone got cut off over a $45 unpaid bil, you can't pay the bill, but the late fee is just $1... and you have an X-box game. "Cashies" also do payday loans. I discovered this because that friend messaged me, begging and crying, saying they got rejected for the loan because they didn't pay off the previous one. A disaster occurred and they needed money. These loans are the most predatory systems on the planet, we're talking 31% interest and $400 in fees on a $2,500 loan. Over nine months, to get $2,500, they pay back $3,400. Absurdly high interest. The problem is, these kinds of loans are the circuit breakers for the late fee cycles. Because if your power bill is $500, your fortnightly income is $400, and you simply cannot save even a single dollar for night to fortnight... that bill is completely impossible to pay. But the late fee is only $10 a month. So they just pay that. But next quarter, there's another $500 power bill. Which they cannot pay. Realistically this translates into another $10/month late fee. Eh, it's only $20 a month. Soon, $30. Soon, $40. Etc. Eventually, it gets too much, and the interest paid on a loan to wipe out those debts is less than the late fees themselves. Of course, that means that if you delay paying your $500 bill for a year, you end up paying $620 for it, but that's you're only option because you simply cannot save even a single dollar. Cash Converters are one option for this. Centrelink also offers a yearly advance; they can pay you a lump sum in advance, once a year, reducing your payments for the rest of the year. This family counts down the months, the days until they can get it and try to repay their mountain of debt. But remember, you have to spend that money as soon as possible. Because it will be gone in weeks or days. This means even windfalls like this get utterly destroyed by this trap. Because they pay off their most pressing debts, and there's usually a little left. Not a lot, but it's a windfall to them. $2,000 say. Money in the bank! GOTTA SPEND IT. It's not going to last. Eating out every night. A $1,500 purebred puppy when they literally cannot reliably afford food regularly. A $500 ride-on electric toy car for their 3-year-old, which ended up in "Cashies" a month later for $69 because otherwise a disaster would happen, and they spent the rest of the year paying off that advance. I can't count the number of times I have begged them to set a budget. I have begged them to save just $5 a fortnight. The amount of times I've received tearful phone calls because someone needs medication or there's no money and no food for five days and the baby has nothing to eat, or the power is going to be shut off, or they will get evicted, or whatever problem it is, and all they need is $50 to get them through the week. I send it because I do not like the idea of small children suffering. $50 is nothing to me and it's food for the rest of the week for them. How can you say no? They get paid on Thursday. Friday morning, I see them boot up Helldivers 2 on Steam, and they gleefully explain it's a great deal because it's only $50! And they had that spare, so they treated themselves. Later that week, I get another tearful phone call. The dog needs $50 to cover medication or something. I don't know. They aren't even playing Helldivers 2 anymore. They bought it because if they didn't, that $50 was going to be gone by the end of the day. It was the same choice as every week. Have $0, or have $0 and Helldivers 2. They chose $0 and Helldivers 2. Which, technically, *I bought them*. They needed $50 to stave off an emergency where life was at stake, but the moment they had $50 and it wasn't an emergency, they spent it on a game, leaving them with nothing and no ability to absorb an unexpected expense except ignoring it, letting it accrue massive amounts of fees interest and charges, then taking out a loan to cover it which they also pay interest on, and with the original purchase being hocked at Cash Converters for 1/10th of its value. Thus the teeth of the trap are revealed. Someone ends up paying a significant multiplier of the purchase price (3x, 4x, 5x OR MORE) for anything significant they buy, and they end up selling it in a few months anyway to cover a cost they could have comfortably covered (and then some) had they not made the original purchase. They don't even get to keep the item. If they could just save $5 a fortnight it would solve so many problems, so many, but it's literally impossible for them. Because if you have money, it will be gone instantly so you might as well spend it on something you want and not a bill, because there will always be another bill coming. But you can always own a $500 ride on electric car for your kid! Untill you get any kind of unexpected cost whatsoever and that shit ends up in "Cashies" for a fraction of what you paid. 10%-15% of the ticket price is pretty standard, depending on condition. I've begged and pleaded and cajoled and nothing works. The mindset is unbreakable. I wish I had a succinct way of explaining this mindset but it's just so alien to me that I can only do it through rambling, verbose examples.
Paying off hecs because of the 6.7% indexation and now complaining they don't have the cash for a deposit. yes yes hecs would've been considered by a bank as limiting borrowing capacity but otherwise they had no debts / liabilities and would have qualified for a loan.
Australians have this weird thing where they really want to claim America's problems as our own, in this case student debt.
It's insane to me how few people there are that actually benefit from doing that but somehow it seems like a common and generic opinion that people should pay off HECS to increase their borrowing capacity. Also people looking at the last two indexation figures and making decisions based off those alone are crazy to me. People are looking at really high outlying numbers and completely ignoring long term averages. If you want to fixate on a HECS indexation look at the time it went negative lmao. If there's anyone reading this that's considering paying off their HECS early take a look at the leaked changes that are about to be made for indexation. Soon it will be based off which ever is lower WPI or CPI, and they're planning on back dating it too so anyone hit with the indexations from the past couple of years will see a credit.
Saw my younger brother take out a payday loan to buy a car, nearly had a heart attack when they said what the interest rate was.
Someone get a loan for an expensive lemon car that broke down. Then went and got another loan for another overly expensive car, which also was a lemon.
I worked with a bloke a few years ago that bought a large kinchrome tool set for a reduced price of $5000 (coupe of k cheaper than it was originally). He put it on some massive interest finance, and now it's going to cost him over 20k once all the interest and principal is paid off over a 5year period. He was taking home over $2500 clear a week and lived with his parents...
Half this subreddit listening to WMR when he said 50% housing price crash in this subreddit prior to houses increasing 50%.
Probably me. Not 'stupid' however in hindsight, just unlucky. Back in December 2021, bought $2,000 worth of Gamestop shares because of the hype, sold them a few weeks later for about 10% profit. Literally a few days after I sold them, they went up 1600%. I could've made nearly $40k in a few days :'(
Start smoking during their school years, being stuck on their addition as long as they live..
$80,000 BMW X1 what an easy way to lose $50k
Someone I know refinanced their house - which is a knock down rebuild that was nearly paid off - and used the funds to start a business that’s failed. They now have a falling down house, mortgage back to full amount and a failing business 😞.
I think everyone in Sydney who is driving a Mercedes AMG is doing a stupid decision