This tidy little do-up in Patea will set you back a mere $90,000
A guest post by Basil Boomer, property investor
A home loan company CEO has been criticised for saying that first home buyers need to cancel their Sky TV subscriptions if they want to save for a deposit.
It shouldn’t be any surprise that his advice to young wannabe homeowners went down like a cup of cold sick. Young people don’t want to be told that it takes hard work and a whole lot of sacrifice to get on the property ladder. They would much rather have everything handed to them on a plate.
These people think the world owes them a living. They all expect to be able to live in upmarket inner city suburbs, spend their money in cafes and restaurants, and go on expensive overseas holidays. And then there’s the Sky TV. You can save over a thousand bucks a year if you dump your Sky TV subscription, so why wouldn’t you? If you put a thousand bucks into an interest-earning bank account, you’d have a house deposit in two years.*
Saving for a goal requires discipline and focus, but it doesn’t have to be that hard. There are many ways to cut down on household expenditure. Take food, for example. If you’re serious about buying a house, you need to ditch that unnecessary and expensive weekly supermarket shop. Try visiting your nearest food bank instead, or picking through a few rubbish bins for nutrition. The ones near fast food joints are always the best. Instead of buying pricey fresh produce, ask your friends and family if you can pick the fruit from their trees. If they don’t have fruit trees, ask if you can mow their lawns. Why waste a good harvest? You don’t hear cows complaining about all the grass they eat, so why should you?
You can make huge savings if you’re genuinely committed, although sometimes you have to spend a little money to save a heap of money. We all hate going to the dentist, and the bill is usually the most painful part. But replacing those annoying and costly teeth with a cheap pair of dentures will save you real money in the long term. And why spend valuable money going to see the doctor? Wait until you feel genuinely at death’s door, and then haul yourself to the emergency department. It’s free! Just don’t call an ambulance, because they’ll send you a bill for the callout.
People often complain about the price of bottled water, but tap-water isn’t free for most of us either. You can save on water bills by cutting showers down to no more than once per week. There’s also plenty of free water around, if you’re prepared to look for it. Chances are high that you live within walking distance of a creak or a stream, so get those water containers out and fill ‘em up! Don’t worry too much about water pollution, because you know what they say: what doesn’t kill you makes you stronger.
And committed house buyers can save a bundle if they ditch all those expensive toiletries and cosmetics. Guys, just let your beards grow. Or, if you must shave, don’t buy those super-expensive razors or that fancy scented shaving foam. A sharpened kitchen knife and a bottle of dishwashing liquid will do a passable job. And women can avoid spending cash on cosmetics by finding the right colour house paint to match their skin tone. A few coats of Dulux Wash&Wear Low Sheen will cost next to nothing (a ten litre pot of paint will last you years), and you’ll look great!
We all know how much of a financial drain children can be. Kids need to be fed and clothed, and then there are all the school fees, medical bills, and after school activities. It can be difficult saving for a house deposit when most of your spare cash is going towards keeping your offspring healthy and happy. But it doesn’t have to be this way. Here’s a very simple solution: if you neglect your children, the government will eventually take them away from you. Problem solved!
And how much are you spending every week on your family pet? Think how much it costs every week just to buy dogfood for that useless and unproductive mutt. What a waste, when that dog should be the one feeding you. A good sized canine will provide enough cuts of meat to feed a family for a whole week.
It’s true that wage growth has failed to keep up with house inflation. For many the prospect of affording a house is getting more and more distant with every price jump. But there are always ways in which a determined saver can supplement their income. All I hear from young people these days is how the government needs to take urgent action on the issue of housing affordability. But they’re ignoring the very many things the government has already done over the last ten years to assist first home buyers. Why do you think they legalised prostitution? The state has also kindly made a complete mess in its ongoing war against P. This resounding failure means that there has never been a better time to set up your own meth lab. You can do your desk job by day, and cook by night, and if they do catch you they’ll give you free accommodation. So what’s the downside?
These solutions simply require young people to get off their backsides, or lie on their backs, as the case may be. But don’t expect that to happen any time soon. We have created a generation of pampered and overindulged young folk conditioned to expect everything for nothing.
But if you aren’t prepared to make a few simple sacrifices, why not look beyond Auckland? Even if your job is an Auckland one, you don’t have to actually live in the city. Why not buy a place outside the Super City and commute to your Auckland job? You can buy a tidy house in Patea for under a hundred thousand dollars right now, which will still leave plenty of cash to cover the additional transportation costs you’ll incur. Patea is only five and a half hours drive away from Auckland’s CBD. I’m surprised more people aren’t doing this commute.
We hear all the usual complaints from young people— it’s impossible to get into the housing market, house inflation is out of control, most of my income is going into paying rent, etcetera etcetera. But the dream of owning an Auckland house is not an impossible one. It just requires dedication, commitment, and ideally a big Lotto win or rich parents.
I’m well qualified to opine on the subject of houses, because I own heaps of them! bought my first one for a song at the grand old age of twenty, back in the day when the average house price was only three or four times the average annual income. Thanks to all my tax-free capital gains over the years I have been able to accumulate vast wealth and achieve considerable financial success, and now I live a life of comfort and leisure. My success has given me the time to pursue my passion for telling other people how they should live, and that is why I am writing this opinion piece. If I cannot lord it over others, what has it all been for?
* If you invest $1000 at 5000% interest, compounding monthly, your return after two years will be well over $130,000, enough for a deposit on a first home.