“…the mental satisfaction of having $1000.00 (in 1939) laid away where you can put your hands on it, is worth more than what interest it might bring, especially if you have the investment in something that you could not realize on quickly.”
Warren Buffett’s grandfather Ernest Buffett writes a letter in 1939 on the importance of what Scott Pape calls Mojo Money, some money tucked away for just in case.
I can’t stress how important this is, or how much it changes your attitude to life. I have quit jobs I wouldn’t have without my mojo money. It allows you to think rationally in non-rational situations.
“Home ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates. All things considered, the third best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks. (The two best investments were wedding rings.) For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come.
But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.”
In Australia, we still have hugely overpriced houses, and banks willing to facilitate the common fantasy of owning a hugely expensive dream home with lifelong debt. It makes even less financial sense to own an overpriced home in Australia.
You Boomers! I swear you are the worst generation ever to walk this earth, self centred, ladder kicking, asset sucking, greed merchants, look at moi, look at moi. all you have ever done is position yourselves in some moral highground, now its emotional intelligence! Cant you all just accept that you inhaled the stoic platform of stabiltiy and unmatched prosperity provided by your hardworking, long suffering parents and ridiculed it in the most pathetic way, dirty hippies. to much outta sight and not enough insight.
Why dont you all just climb into your disgustingly named (and priced) winnebagos and drive off into the sunset. “Spending the kids inheritance”! Pah- you lot spent the countries inheritence.
So to all you 60 year old super sensitive emo dudes, dont trust anyone over thirty, life begins at 40, hippy, yippee, yuppie, dink, grey nomads, go get into your now luxuriously appointed retirement villas (after saving money sending your folks to crap ones) and shut the hell up, I for one am sick of you and all your ridiculous studies.
~ The inter-generational wars continue: a SMH reader posts a rather passionate anti-baby-boomer comment.
The finest bonsai have many, if not all, of these virtues. Instead of trying to represent every tree in a forest in their intricacy and detail, they suggest the landscape: the vital, ideal form, with a little moss, a single rock. Instead of being perfectly symmetrical, the best bonsai are balanced, but irregular: a harmony of differing angles, masses, shapes. They are not allowed to become overgrown or messy – they require constant pruning and training to acquire their evocative simplicity. And, while they’re kept alive, they give the impression of age: trees subject to the wearying flow of the decades, and to the cycle of the seasons.
The bonsai can be a craft, an artwork, and a meditation aid. It offers a brief chance to let go of anguish, false hope, and all the leaden accoutrements of the psyche. And it fits on the porch.
People who read this blog would know I am a big fan of Damon’s writing, particularly on gardening and mortgages.
I like the concept of ‘buy nothing new month’ which is being promoted by the Salvos stores. The only thing I am a dubious about is their Radio Rentals sponsorship, and how they say renting things from radio rentals lowers your footprint. Really? I’d think buying an appliance and keeping it for a really long time is better than renting the appliance and constantly upgrading it. But that’s just me.
Otherwise, a great idea. And they have a blog too. I’ll give it a go this month, and see how I do.
“Debt, no matter how creatively structured, is anathema to peace of mind.”
~ Ryan Freitas’s thoughts on debt – included in his 35 lessons of 35 years.
This statement succintly explains why I don’t own, and probably won’t ever own, a house. A lifetime of debt is not for me, I would rather rent, have money in the bank and peace of mind. I’m what you call debt-adverse.
It was interesting frightening to watch Bursting the Bubble on Insight tonight. I still can’t get over how much debt Australians have taken on; Insight mentioned that we as individuals have seven times greater debt than during the recession in the early nineties: scary!
I read a lot about housing unaffordability in Australia and I have read lots of stories about Australian families who have bought overpriced housing (what housing isn’t overpriced) because of the alleged security that a house provides.
The one thing that Insight successfully showed tonight is that an expensive house with a large mortgage doesn’t actually provide security at all, it just quite the opposite. How can any person with a large mortgage requiring multiple incomes and uninterrupted employment just to service the debt at current interest rate levels feel any bit secure? Isn’t that what security is about, feeling secure?
I would feel insecure with a mortgage large enough to pay for the apartment we rent. I would feel insecure buying any apartment in Brisbane at the moment knowing that we would need two full times jobs for 30 years just to service the debt. I feel secure renting a place knowing that we have a few years rent in savings in case something goes wrong. I feel secure knowing that I could quit my job tomorrow and we could still easily afford rent and living expenses from just one salary. Now that’s security.
The high interest rate climate in Australia isn’t bad news for everyone, especially for those who have their money saved in high interest online savings accounts.
I noticed yesterday that BankWest is now offering 8.25% p.a. for their TeleNet Saver account. Fair enough it is an introductory rate until 1 January 2009 but still, that’s the highest interest rate I’ve seen and it’s not even a term deposit. ING Direct has been a little behind with their interest rates of late but they are too offering an bonus rate but it’s (only) 7.90% p.a. and only valid until 30 September 2008.