NewsWhat’s your best piece of advice for someone starting out (whether they want to hear it or not)?
What’s your best piece of advice for someone starting out (whether they want to hear it or not)?

What’s your best piece of advice for someone starting out (whether they want to hear it or not)?

This was a recent headline in Australia’s most popular satirical newspaper. 

When it appears you bought your house for peanuts, how to best advise younger people about coping with the rash of higher prices, and not sound patronising?

It's a dilemma highlighted with a cash rate increase for the first time in eleven years and many feeling the pinch and growing uncertainty of their world.

It may come as a bit of a shock to younger generations, but for those aged 50 and higher, in various ways, we have seen it all before.

Home loan rates are still meagre compared to the 17% plus some paid in the 1990s, but house prices now appear even more impossibly low today.

Maybe it's all swings and roundabouts, but what would you prefer with homeownership: a low entry purchase price and higher ongoing mortgage payments or the other way around?

Life is sadly never simple, and you can get stung at both ends, so knowing what you know now, what's the best advice you can hand down without being condescending?

In Scandinavia, they say, "There's no such thing as bad weather, only bad clothes." In other words, if you are prepared and protected, you can cope with most outcomes.

It may apply to money as well as meteorology, but for arguably one small problem. While the climate is changing, the world of money has shifted too, and what was true once may no longer hold fast.

For example, credit is far more available and inflation, until recently at least, has been tamed and also interest rates have hardly been lower.

Tie in social changes such as social mobility, marrying and family forming later, and living much longer, and old fashioned ideas such as 'Take care of the pennies and the pounds may take care of themselves' may no longer apply.

Many of these ideas are dealt with more deeply in a colleague's new book aimed at younger people called Live the Life You Want With The Money You Have by financial adviser Vince Scully.

So while we might be tempted to say eat out less and save more to youngsters struggling to raise a home deposit, the truth might be more complex.

What advice, patronising or otherwise, would you give to younger generations about making the most of the world in which they now live?

Any information contained in this communication is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.

Originally posted on .

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Brian from NSW commented:

I would take the higher interest/lower house price every time. If the price is low there are options for the interest rate, e.g. save a bigger deposit, pay extra off the mortgage, borrow from a family member, etc. With the current crazy high property prices there are no options for a large part of the population. 

catherine from NSW commented:

also remember that Governments change the rules. Once you could have $900,000 in assets but the government changed it to $400,000 and a lot of pensioners lost their pensions Dont forget with property rising so high it will soon affect a lot more pensioners especially with holiday homes. They should include the value of the home they live in as some pensioners have multi million dollar homes and some who have a modest week ender miss out. The government shouldnt change the rules in the middle of the game 

ian from NSW commented:

While I know that it is hard to get into the housing market for the many today due to exorbitant prices of houses we started at the bottom, run-down property 2 bedroom fibro home with now sewerage.I worked up to 16 hours a day and my wife did Avon selling on weekends. Interest rates were 18%. The point is you have to start at the bottom and work your way up. Ian NSW 

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