{"id":3052,"date":"2017-09-27T06:10:07","date_gmt":"2017-09-27T06:10:07","guid":{"rendered":"https:\/\/raizinvest.com.au\/investors\/is-the-great-australian-dream-still-a-reality\/"},"modified":"2020-10-28T01:39:08","modified_gmt":"2020-10-28T01:39:08","slug":"is-the-great-australian-dream-still-a-reality","status":"publish","type":"post","link":"https:\/\/raizinvest.com.au\/investors\/blog\/is-the-great-australian-dream-still-a-reality\/","title":{"rendered":"Is the Great Australian Dream still a reality?"},"content":{"rendered":"
\"Suburban<\/figure>\n

For
\nthe past half century the Great Australian Dream has centred on home ownership;
\na detached house with a Hills Hoist out the back or, more recently, an
\ninner-city terrace. But, with average house prices in some metro areas circling
\nthe $1 million mark, the Great Australian Dream has become more of a fantasy
\nfor many millennials and first home buyers.<\/p>\n

For
\nthis reason, many of the newspapers have dubbed millennials as \u201cGeneration
\nRent\u201d: a moniker that has transformed into something of a mantra, as many
\nmillennials effectively give up on saving for a deposit. The problem is this
\napathy is coming at a critical time, where they need to be doing the exact
\nopposite \u2013 that is, saving more not less. Whereas once, saving for a
\nhome\u00a0took a little dedication and hard work, price-to-income ratios are
\ntoday around 5.8x nationally, and up to 7.0x in Sydney. The trend also isn\u2019t
\noccurring in isolation; it\u2019s combined with high levels of household debt and
\nstagnant wage growth.<\/p>\n

 <\/p>\n

However despite this,\u00a042 per cent of respondents<\/a> are confident with their current financial status.<\/h3>\n

In practice, it means that first step \u2013 from renter to home owner \u2013 is a large and
\ndifficult one. The Reserve Bank of Australia (RBA) found the ability to save
\nfor a deposit is the primary constraint for one third of potential home buyers
\n\u2013 bigger than the ability to continue to service a mortgage on an ongoing basis.<\/p>\n

 <\/p>\n

Does
\nthis mean the Great Australian Dream is dead? Far from it.<\/h3>\n

But it does mean millennials need to work even harder to reach their goals and take hold of\u00a0their own financial futures. To do this, they need to adopt a saving mindset.<\/p>\n

The
\nchallenge is that learning to budget is not necessarily part of everyone\u2019s
\ndaily priorities. We\u2019re not taught to manage our money at school or given any
\nsort of formal education on it. Instead, people are expected to learn how to
\nmanage their finances from their parents or through a costly process of trial
\nand error. But the trick to it \u2013 like anything \u2013 is starting small and being
\npersistent.<\/p>\n

 <\/p>\n

The
\nfirst step is always the most difficult one.<\/h3>\n

Moving from spending all of your
\nincome to saving $20 a week can be a big leap but once it\u2019s conquered, it gets
\neasier to save more and more because the habit has already been introduced.
\nFurther, small savings goals can help reinforce positive behaviour, and make it
\neasier to take bigger steps. Saving enough money to buy a new car could be an
\ninitial goal that makes the idea of budgeting for a bigger item \u2013 a wedding, a
\nholiday \u2013 seem easier. Eventually, with the right type of financial confidence,
\nit\u2019s easier to look at buying a house in a new light.<\/p>\n

There
\nalso needs to be a discussion about the need for home ownership. Knowing
\nAustralia\u2019s culture and the mythology around The Great Australian Dream, it\u2019s
\nhard to imagine our young people adopting the European mindset of renting for
\nlife, rather than aspiring to own. But in reality, there is no reason to think
\neveryone should own their own home.<\/p>\n

There
\nare many other investment types that can often lead to better financial
\noutcomes. What millennials need is the right financial education, to understand
\ndifferent asset classes and then be able to choose the ones which will work
\nhardest for them. It also means if they decide to buy a house down the track,
\nthey\u2019ll be a better position to do so.<\/p>\n

Let\u2019s
\nbe clear \u2013 none of this advice will magically help anyone afford a house
\novernight. But it will help build a critical change in attitude and provide
\nfirst step into having a healthier financial balance sheet. It all goes a long
\nway in making the ambition of buying a house seem less like a pipedream!<\/p>\n

 <\/p>\n

\n

 <\/p>\n

Don\u2019t have the Raiz App?<\/h3>\n

Download it for free in the App store or the Webapp below:<\/p>\n

\n
\"download-raiz-app\"<\/a>
Click to download the Raiz app<\/a><\/figcaption><\/figure>\n

 <\/figure>\n

Important Information<\/strong><\/span><\/em><\/p>\n

The information on this website is general advice only. This means it does not take into account any person\u2019s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the product.<\/em><\/p>\n

A Product Disclosure Statement for Raiz Invest and\/or Raiz Invest Super are available on the Raiz Invest website and App. A person must read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.<\/em><\/p>\n

The information may be based on assumptions or market conditions which change without notice. This could impact the accuracy of the information.<\/em><\/p>\n

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super.<\/em><\/p>\n

Past return performance of the Raiz products should not be relied on for making a decision to invest in a Raiz product and is not a good predictor of future performance.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

For the past half century the Great Australian Dream has centred on home ownership; a detached house with a Hills Hoist out the back or, more recently, an inner-city terrace. But, with average house prices in some metro areas circling the $1 million mark, the Great Australian Dream has become more of a fantasy for […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[58,64,60],"yst_prominent_words":[383,384,98,332,390,385,381,391,388,389,393,245,313,97,82,117,166,125,239,392]}