Higher interest helping self funded retires after a long drought we are starting to get a bit more from our cash

It must be a terrible struggle for all those battlers paying off their 5 bedroom 3 bathroom 2 storey 2 car garage air conditioned houses with their swimming pools, home entertainment centre, car for every licence in the household, boat, jet ski, kids trail bikes, etc, etc, etc..........

I bet most GNs on this site would have killed to get the low interest rates of today compared to when we had mortgages!

One thing worse than a profitable bank is an unprofitable one


-- Edited by jimricho on Sunday 14th of November 2010 09:29:02 AM

Yes the young people of today have so bad you have to feel for them , it their high life that make it hard for us older folk the market is gear for there high spending , but we are thereal winners we know how to live on a small budget they don,t have our skills

I smile when the interest rates go up as I have done the 2 morgage, 2 job run and, thankfully, come out unscathed, but wouldn,t recomend it to anybody. All I can say is that the banks suck, and that building societys are not far behind.They all say that their costs have risen, but so have their profits skyrocketed. I rate banks on par with politicians and used car salesmen.But I do like it when the interest comes in at the end of month.I think the govt should legislate against exorbitant fees, as getting charge $39 for going one day over on your bankcard is a blatant ripoff . Still haven,t got enough money to comepletely retire, but keep saving.

I'm in the same club as you Bill, not quite enough there yet to cut loose but I'm in a job where I get lots of time off (one good thing about shiftwork). Do you all remember the days of massive interest rates of the Keating era, that would help  the G.N's but not too flash for the kids

-- Edited by Di-n-Gary on Sunday 14th of November 2010 12:02:22 PM

Also do you remember back in the 70's when the interest rate on mortgages was around 17 - 18%.  We managed though, even with a young family.

I always tell my kids to be careful of such rate rises. They all think it can't ever happen again.

jimricho wrote:

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It must be a terrible struggle for all those battlers paying off their 5 bedroom 3 bathroom 2 storey 2 car garage air conditioned houses with their swimming pools, home entertainment centre, car for every licence in the household, boat, jet ski, kids trail bikes, etc, etc, etc..........

I bet most GNs on this site would have killed to get the low interest rates of today compared to when we had mortgages!

One thing worse than a profitable bank is an unprofitable one


-- Edited by jimricho on Sunday 14th of November 2010 09:29:02 AM

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In the early eighties we had a fixed rate with National Bank of 13.4% and thought we were well off with that.  Rates were running up towards 18.   We budgeted to our rate and got through it all ok.  Even paid off the house.   I wonder with people these days who claim that their whole world is going to collapse over the .5% rise in the rate.  I would suggest that if your budget cannot stand raises over three or four percent you shouldn't have the brand new house, new car, boat etc etc etc.......did I mention wide screen tv?...

 

I'm still paying my home off .But thankfully I've only got a very small morgage left. and have just over 5years before I try to cut myself loose (59yo). and hit the road morgage free.

I'm in the reverse as are the self-funded retirees. We invested our cash to prop it up and to support our lifestyles with the interest. Not so! Now, these banks crow about their profits and the huge salaries they pay to the execs, but I'm out of pocket still, all because of the alleged GFC. The banks can't have such huge profits while they owe me and thousands of others the balance of the funds we invested. I was advised to have managed funds, and am down a lot of $'s still. In my calculations no one makes a profit until the bills are payed out, free and clear. The young people who over commit themselves and tie the mortgage noose around their necks to keep up appearances and impress the relatives and friends are crazy and so stupid. The developers who present those wonderful mansions with all those bedrooms, bathrooms and family rooms are responding to a demand they created.

I can remember a time when I would have loved 13.5%. I once has a house loan through a credit co-op called Statewide, which eventually folded and got taken over by State Bank of Victoria which folded and was taken over by I think What is now called Westpac. Some years later I had a business loan through NAB that was at 21.5%. I'd kill for that rate now for my super!! The problem for all this as Jim said is that everyone wants everything now. they are not prepared to "grow" as we all learnt thats what you had to do to get bigger and better. Paul

What happened to the 3 bedroom house, 1 lounge room, 1 kitchen with dining table in middle or in "dinette", 1 bathroom & toilet? Is it that they want so much more right now, they need the rooms for all these gadgets, with a room for every child, and a bathroom for every bedroom? Then all those flash white/stainless steel good have to have somewhere to go as well. All on lines of credit or something, as well as the cars in the garages. They'd be better off with a smaller house on the little suburban block, and use some of the spare space to grow veges and save some bucks.

I've had a giggle reading this thread... you are SO-O-O right-on! We had young kids in the 70's and paid 19%... for what would now be considered an "entry-level" house, but we were all happy and well-fed from the vegie patch and chooks.
No computers, the kids were too busy outdoors playing with cheap things like a home-made wooden boat.

Ahh, the good old days! (saying that is in itself a sign of old age, but I dont care!)

Cruising Granny wrote:

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What happened to the 3 bedroom house, 1 lounge room, 1 kitchen with dining table in middle or in "dinette", 1 bathroom & toilet?

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They still exist..... I live in one!

As a consequence I'm able to self-fund my retirement and afford to do a bit of regular "grey nomadding"

I, like many, have a very modest bank shareholding and the percentage yield from these shares is likewise modest and certainly does not make us the "greedy rapacious" shareholders that the media make us out to be in their beat up on the banks.

Almost every superannuation fund would have bank shares in their portfolio so that just about every employee would be a shareholder through their fund.

It's interesting to note that back in the "good old days" (sarcasm intended) banks had much higher lending margins than they do today, so much for the re-regulation the loony lefties are calling out for.

 

Banks also had more ethics "back in the good old days".   They didn't lend you money that they knew you couldn't pay back.

There were many people who were "knocked" back on a loan if they didn't have sufficient income to pay the load back and still maintain a reasonable standard of living or collateral to cover the loan should you loose your job or some other unforseen thing happen.

so true ma ... i rememeber we work out butts off for two years to get good desposit for our home 17 years ago .. and then we only borrowed the amount we needed not $50,000 more so we could have new car new furunture and a hoilday as well... we brought our block of land and it was two years before we actually started to build ... Thing is today young ones want it all at once and the bank let them borrowed too much and then they get into trouble when they cant live (their ) lifestlye and pay back all they owe ..bye the way when we build our house the intrest rates were 16.9% when we borrowed the money .. we surivied by both of us working while raisng two lovely girls and living within our mean's

I suspect that this was as much a product of having less money to lend in those days. However I do agree that some of the anecdotal evidence of banks "pushing" loans onto risky borrowers is ethically questionable.

Much of the problem in USA was a consequence of "securitisation" where lenders (often not banks per se) could "cut and dice" the loans into packages and disguise the risk and pass it on to other institutions. This enabled a whole bunch of ethically challenged operators to make a motza out of fees and commissions.

PS: I agree with adequate regulation to ensure the stability, transparency, and financial integrity of the banking system but how far should Nanny Government go to protect people from themselves. (rhetorical question)

-- Edited by jimricho on Monday 15th of November 2010 07:21:03 AM

Jim, you hit the nail right on the head there mate.

See it everyday in one form or another. Common sense tells most of us how far we can go. Sometimes I think, people get caught up in the excitement of it all. I mean things like listening to their friends spruke the wonder of having this and that on the tick.

Not a lot of people realise the years of struggle ahead of them to repay and job security is no where as reliable as it was thirty years ago thats for sure.

They believe the value of their property will keep climbing and they'll sell when it goes high enough. At the moment some values are falling, probably due to the financial situation. Than what? They're stuck with a huge house full of furniture and fittings they can't afford.

G'day all. while i feel a little bit sorry for all the younger people who were sucked in to loans they are now finding hard to repay, perhaps as others say, maybe they wanted too much too soon. didn't we all?but we somehow managed to make it work out. now that we have reached the dizzy heights (according to our goverment) of being partially self funded retirees any small interest rate rise to us is welcome. I do wish though that the government would not reduce their small contribution to our life style every time my long earned super fund gave us a small increase. any comments are welcomed. thanks Jack and Cherie.