Episode 27

Younger than 35 are experiencing low to negative income growth – but there are real ways of actually getting around it

Today we’re talking about a news article that came out highlighting that young Australians’ are experiencing either zero, or negative income growth.

  • Stats throughout history
  • How to increase your income – whilst this is a real issue, there are real ways of actually getting around it.
  • The ‘Smashed Avo’ reference – the idea young people can’t afford to buy a house because they’re living large.
    • The origins of ‘smashed avo’ as a reference to millennial laziness, meanwhile, go back to a column by a middle-aged man named Bernard Salt, who is a partner at one of the big four accounting firms.
    • Living an easy life of brunch, Instagram and maxing out their credit cards. Then they have the audacity to complain about the price of housing!

 

Let’s look at the stats…

Young people have seen little income growth

Sources: Productivity Commission estimates using Australian Bureau of Statistics (Microdata: Household Expenditure, Income and Housing, 2015-16) and ABS Household Expenditure Survey basic confidentialised unit record files 88-89 through 2009-10.

 

The graph

  1. Shows “real” income
  2. Shows age groups and time periods of 5 years

During the 10-year period between 1988-1998, those aged 25-34 saw the largest increase in wage growth.

But that that all stopped in 2009-10.

  1. Since 2009-10, growth in real income has been OK for other age brackets.
  2. An individual will still normally gain income as their age increases from 25 to 34. But that income gain will be swimming upstream against a general downtrend in real income for people of that age group.
  3. In previous eras, the income gain associated with gaining age and experience was boosted by a general uptrend.
  4. Businesses and wage growth also go through cyclical change, which needs to be considered when looking at these figures.

 

Currently

  1. Those over 65 are having the highest increase of income of around 2% (in line with increases of Age Pension)
  2. Below 35 are experiencing low to negative income growth

 

Grow your income

  1. Increasing your income is a long-term journey and doesn’t happen overnight.
  2. Employment – Starting early to maximise lifetime earnings, review your pay with your current employer, upskill yourself to provide real value to employers.
  3. Investments – Increase your income personally and reinvest the income from property and shares
  4. Higher disposable incomes – Getting out of bad debt or reducing discretionary expenses

Furious Fridays: Are low interest rates actually a good thing?

Furious Friday Are low interest rates actually a good thing? For the last few weeks we have been talking a lot about the economy; the Reserve Bank, printing money, and now we will be finishing off by talking about the final effect of this – Interest Rates. Today, we...

Who controls the World Bank and why do they seem to do more harm than good?

Welcome to Finance and Fury, the Say What Wednesday edition. This week’s question comes from Francesca. “I have really liked your podcast on the pandemic bonds, I had read about these bonds maybe a month ago in The Economist. My question after listening to the podcast...

Should you start a business?

Hello everyone, and Welcome to Finance and Fury. The last episode was about finding the right job, from your purpose in life.  In today’s episode, we will be looking at investing in a business, by creating one. To start: There is lots of work in planning and...

How to invest to achieve your goals?

Welcome to Finance and Fury   Today – Talk about goals based investment – setting up buckets of investment allocations to meet needs Approaches to portfolio construction three common approaches in building the framework of a client’s investment solution:...

Is money the root of all evil? And, how statistics are used to perpetuate misunderstandings and f*ck with you

Furious Friday Is money the root of all evil? And, how statistics are used to perpetuate misunderstandings and f*ck with you Welcome to Furious Friday – These episodes aim to solve misunderstandings In this episode -  Furious about the muckery of statistics used to...

Furious Fridays: The Death of Stalin

Furious Fridays The Death of Stalin Last episode we ended with Lenin’s death. The roll out of Communism was well underway and it was time for new leadership. One his last policies before he died in 1924 was the New Economic Policy (NEP) in 1922… A mixed economy put in...

The circular economy – The greatest barrier to competition and choice, or the saving grace for our futures?

Welcome to Finance and Fury, the Furious Friday edition Last week - went over partnership programs and potentials for coercive monopolies – today – implementation of policies in the circular economy – SDG12 Today’s ep – go through google and the largest companies on...

What will the Paris Climate Change Agreement do?

Welcome to Finance and Fury the Say What Wednesday edition. Today we are continuing on from last week’s episode about climate change, so if you haven’t heard it, check out last week’s episode here. Today I will run through the Paris Climate Agreement, and their...

The number of homes being put up for auction across Australia has plummeted as falling property prices and fewer cashed-up buyers shake the confidence of owners looking for the right time to sell

Episode 25 The number of homes being put up for auction across Australia has plummeted as falling property prices and fewer cashed-up buyers shake the confidence of owners looking for the right time to sell The decline of auction rates and confidence in the market...

Furious Fridays: The Holocaust, famine in the Ukraine, and how we just keep repeating the same mistakes, Rick and Morty style

Furious Fridays The Holocaust, famine in the Ukraine, and how we just keep repeating the same mistakes, Rick and Morty style Welcome to Finance and Fury, Furious Friday Have a think about how much you know about history? Are you familiar with the big events, like WW1...

Pin It on Pinterest

Share This