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The Finance Show With Joe
Welcome to the Finance Show with Joe hosted by It’s Simple founder, Joseph Daoud. We chat about the financial issues facing ordinary Australians from managing the cost-of-living to investment strategies in order to help you make more informed financial decisions.
Join us as we discuss finance, mortgages and home buying in Australia!
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The Finance Show With Joe
How Bad Was Everyone's Christmas Debt?
The boys kick off the new year with a recap on the financial activity we saw over Christmas. All we can say is don't make your settlement date during the holiday period!
Moving into the world of personal loans and debt consolidation, we dissect the growing trend of managing multiple debts post-holiday season.
The episode takes a deeper look at the changing travel landscape and the impact of gambling on financial decisions. With major airlines altering services and competition heating up, we examine how these changes affect consumer behavior. Meanwhile, the cultural impact of gambling in Australia and its influence on loan applications are analyzed through a hypothetical scenario. By spotlighting an individual's struggle with gambling and financial stability, we bring to life the intricate connection between personal habits and economic resilience. Join us for an in-depth exploration of these compelling financial themes and equip yourself with the knowledge to navigate the season with confidence.
Follow us for more property news and mortgage advice!
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All right, welcome to the Finance Show with Joe. He's Joe, I'm just some schmo. Merry Christmas all.
Speaker 2:I think we're about 20 days late, mate. What are you talking about? Never too late, it's the 25th of December.
Speaker 1:I don't know what you're talking about how have you been. It's snowing outside. I've been good, I've been good. It was a good break. How about you?
Speaker 2:I didn't have a break.
Speaker 1:You didn't have a break.
Speaker 2:No, not in the slightest. It was possibly one of the most chaotic Christmases I've ever had. As you know, the influx of our work has been at a level that we've never experienced before.
Speaker 1:Good, times for Simple, it's fantastic.
Speaker 2:Don't get me wrong. But at the same time, it is quite difficult to get settlements across the line during the Christmas period.
Speaker 1:All the solicitors are like on holiday right.
Speaker 2:We've got solicitors on holiday, we've got banks working with skeleton staff and we also have the credit assessment team, you know, on leave. So who does it all fall on, if your loan is supposed to settle on the 27th of December or the 30th of December or the 1st of January? Actually, nothing ever settles on the 1th of December or the 30th of December or the 1st of January. Actually, nothing ever settles on the 1st of January or the 3rd of January.
Speaker 2:So there's a lot of issues that are created when it comes to the Christmas period and this is something I want to highlight. And, liam, turn this into a TikTok. Later in the year, if you are planning to get a loan, avoid as much as possible having your settlement between December 21st and the 6th of January, because I am telling you from now, it's going to be chaotic.
Speaker 1:It is going to be hell, you're going to tear your hair out, wondering if you're going to get it on time.
Speaker 2:Why do you think I got cut off the ponytail?
Speaker 1:I was just ripping it out all throughout the Christmas period.
Speaker 2:It was, it was crazy, it was, um, it was possibly the most challenging time of my life, and something that usually takes two minutes during regular banking periods was taking four hours. I'm talking about just nominating a offset account, just nominating an account. Sending the form in to a bank Usually, yep, that's the account they structure it it was taking four hours to get a response. It was chaos, but thankfully we got through it, got it over the line. It's the 17th of January, christmas episode, but 17th of.
Speaker 2:January, we're going to get there and we're very, very excited.
Speaker 1:Yeah, and speaking of Christmas, we're very, very excited. Yeah, and speaking of Christmas, we're going through the cost of living crisis. Yada, yada. It's almost become a meme at this point cost of living, yada, yada, but people are still spent on Christmas. But did you notice people were overspending on Christmas? A lot more credit lines this year, or nothing like that.
Speaker 2:Credit cards. The application for a credit card is a lot easier than an application for a home?
Speaker 2:Yeah, naturally, the application for a credit card is a lot easier than an application for a home loan. Yeah, naturally, when it comes to a credit card, there's always going to be some third or fourth tier lender out there that is going to give you some sort of credit, and this can be anywhere between $2,000 to $10,000. After $10,000, you know there's going to be a lot more scrutiny when it comes to your account, your files, your credit scoring, yeah. But anywhere between that I can even go to 500. 500 to $10,000 mark it's a pretty easy application and they will usually approve you on the day Now with credit cards, you've also got the credit card. You've got a buy now, pay later account Buy now, pay later and then you could get zip money, which is a line of credit on your, not your, finances, on your pay slips.
Speaker 2:So it's a line of credit on your income. So you can get up to $5,000 from a company like Zip money.
Speaker 1:Yeah, I did that when they first came out. This is when Afterpay and stuff were just taking off and I needed a laptop at the time and I couldn't afford it with cash on hand, but with Zip Money I could. That's all closed. Now I don't have any of this buy now, pay later stuff. I'm aware of this, you are aware of this. But yeah, it was interesting. After I paid that off successfully, they upped my limit to $10,000 as if it was a credit card, and I'm like, hmm, this feels too easy. Like yeah, I'm like I'll pay my bills, but what if someone who's like not good at this?
Speaker 2:the. The main problems I have with after pay, zip money and even some credit card lenders is they will now allow you to apply at the store. So if you walk into platypus, I'm not too sure of platypus but just andypus, I'm not defaming Platypus, I'm just going to highlight that.
Speaker 2:But if you wanted to buy a pair of sneakers, I'm almost 98% certain they used to let you open an afterpay account on the spot in the store. You know, when you go to Harvey Norman and they say 60 months interest free, it's a credit card. All they're doing is offering you a credit. They say 60 months interest free.
Speaker 1:That's what this is.
Speaker 2:It's a credit card, all they're doing is offering you a credit card for 60 months that you don't have to actually go to a bank to apply for or call up and apply for. They'll do it for you on the spot and they'll go yep, you're approved. Let's give you your couch and stuff. And they prey on people who aren't financially savvy or financially vulnerable.
Speaker 2:Yeah, that's pretty much it. They prey on the financially vulnerable. So you'll have an 18 year old, 19 year old that walks in and they're like I could get a 50 inch flat screen tv, I could, I could buy this stuff. Yeah, let's do it. And they have no idea.
Speaker 1:They just think it's like free money they just think it's free money.
Speaker 2:They just think, oh yeah, I'll make my repayments in in 60 months. They have no idea what's about to hit them, or they're just so desperate to like.
Speaker 1:you know, they've got no TV or they've got no couch and this is the only way they're realistically going to be able to afford it. But even then, can they realistically afford it?
Speaker 2:Well, the people that are applying for these credit cards. They're not from the bank, they're retail shop workers Working on commission. They're like yeah, yeah, don't worry about it, you can get zip money, you can get a line of credit, but we saw a lot of overspending over Christmas.
Speaker 1:Yeah, yeah, there was a recent study from Finder 8% of Aussies around about 1.7 million people are facing growing credit card debt because of this Christmas spend. So the national credit card debt is about $2.7 billion and that's an average debt of $1,600 per person.
Speaker 2:That is crazy. I don't like using the average.
Speaker 1:No, no, it blows out.
Speaker 2:Yeah, the average is not the best way to define something. We always like to use the median.
Speaker 1:Yeah, because that's the actual middle.
Speaker 2:It's not the best way to define something we always like to use the median. Yeah, because that's the actual middle and I'm 99% certain the median is going to be higher than the average, really. Yeah, because salaries are higher than what they were when I applied for a credit card when I was 18. So when I was 18, a great salary was $120,000 a year. That means you've made it. The average salary was like $55,000 to $60,000. Yeah, okay, I am now 34 years old and you know I lodge mortgages every single day, so I see what the average salary is. There's a chance. Those credit card limits, like the base limits, are possibly $10,000 and above. And when you've got screaming kids, a wife you know who might really like some fancy things, you want to be able to at least go for dinner. You need to host a Christmas party they all add up and with home loan interest repayments being so high, people don't have free cash moving around Just to spend on a big Christmas buffet, basically.
Speaker 2:You got a million dollar mortgage. The average repayments on that per month are around 6600 bucks. Yeah, okay, you've got back in 2022. Before the rate hikes, that was two thousand dollars, all right, all thereabouts. So that's now four thousand dollars difference per month in interest that you now have to fork out and pay yeah with after-tax money.
Speaker 2:So let's say your salary is $100,000. You've got a million dollar mortgage which you could have qualified for back then and now, all of a sudden you've got $4,000 less to spend the month on top of your after-tax income. So, after-tax $100,000, what's that? 70 grand 70, $80,000? You're the maths guy, I'm the maths guy, but I'm not the tax rate guy. Okay, I'll tell you that there's like where does that money come from? So that's why this credit card debt is building up.
Speaker 1:Yeah, honestly, I kind of thought it's smaller than I thought it would be. Maybe people downsized over Christmas like they didn't. Well, there's that story of there's two Australians right now. There's is right now like there's. The people who rate rises have not done anything, for they're just living like normal, and then everyone else. I don't know if that's. I don't think it's a 50 50 split. I don't know what the rate is. This is just more like in the air, like just the sentiment, you know they're actually starting to feel at the older parties.
Speaker 2:Yeah, so there was huge concern and there was a massive uh discourse online. Uh, between 2023 and 2024 of the boomer generation the older generation not being affected by interest rates. They have started to feel the pinch in the last six months because they have businesses that aren't as profitable as they once were. Guess what. These people also have debt. They have debt Everyone's got debt.
Speaker 2:They purchase cars, they purchase boats, possibly retirement homes, jet skis I don't think 66-year-olds are jumping on jet skis. I'm just going to put that out there, but you will see them. You've actually seen them be affected.
Speaker 1:Yeah, well, that's what the RBA was trying to wait for. That's why they weren't dropping the rates, despite the inflation numbers coming within that target band. Yeah, allegedly, um, yeah, so that's that's why they're waiting, right for everyone to be affected and everyone is affected.
Speaker 2:Yeah, so everyone is affected. And what we're seeing now, early january period, there's a lot of debt consolidation loans coming to us okay, I've got three personal loans. Okay, why? That's the first thing I ask. I'm like, why do you have three personal loans? And then you'll even see the same lender giving the same person two personal loans.
Speaker 1:Interesting.
Speaker 2:It's chaotic. Okay, so we've got these personal loans, I've got this on finance and I've got a $4,000 credit card I need to pay out. Where does the money come from? Exactly? Where does the money come from? So people hope that their properties will grow in enough value that we can use all the equity. We're starting to see housing values drop.
Speaker 1:Nothing too crazy. What was it? Point one Because the first time two quarters have dropped in value right For like a couple of years.
Speaker 2:That's right, yeah, I saw that headline, so we're really starting to see people get into more debt trouble than ever before. Hopefully the Reserve Bank of Australia starts dropping interest rates so we can get some activity in the market and you can go to the pub and get a beer.
Speaker 1:Beer excess is going up in.
Speaker 2:February I'm fuming. These are the things that are now occurring and we're hoping to be able to assist people that have overspent at Christmas. And I get it. I've got a wife. I've got 14 nieces and nephews. I've got a large family, a lot of gifts I've got to pay for. I've got four godchildren I'm going to add on to that. I've got four godchildren that I need to buy gifts for. It is not easy. When you've got a mortgage, when you're trying to get ahead, when you've got people that are working for you.
Speaker 1:This is not a simple task I was lucky this Christmas is that we don't have any. All the kids are growing up now. There's no little kids anymore, so we don't have to buy Christmas presents for everyone now. It's just like the immediate family and stuff like that.
Speaker 2:We do KK, so we do Ah, yeah, yeah. But the problem is one of my sisters has five kids.
Speaker 1:Every one of her kids. So you don't want to get that one. No, no, no.
Speaker 2:Not like that. Each one of her kids is allocated a gift to someone. Oh okay, her kids are under 10. So that means she still needs to pay for five extra gifts?
Speaker 2:yeah, she's got from her family, okay, well, yeah, so we see the pinching. Now, how can we help people when it comes to debt consolidation, especially around the christmas period? Yeah, you really need to start looking at possibly consolidating and stretching for as long as possible. So we have you can stretch a lot of the personal loans that are out there. They usually try and get you between three and five years that's what they want you at but there are lenders out there that will stretch it out to seven to ten years. Okay. So if you stretch it, okay, your end debt might be higher, but your repayments are going to be lower and right now, the immediate is the issue, not not the long term do you want to eat water for dinner?
Speaker 1:yeah, or do you want?
Speaker 2:to be able to eat an actual meal, and that's what you've got to look at. You've got to be able to call brokers that are out there that specialize in personal loans, that specialize in those types of consolidation. We don't do it at. It's simple. We're mainly residential, commercial, but we've got lots of friends out there. You know the people from loan options, peter, from GPS lending. We've got multiple people. We've got multiple people that we can, we can assist you with so that they can consolidate your debt, because that could be the difference in paying $500 a month in repayments or $300 a month. And then if your property grows in value I'm not saying everyone has a property but if your property grows in value as well in that period, what you can do is you can then refinance that debt afterwards once the interest rates start dropping, and then that's where your savings will be.
Speaker 1:Yeah, If people are on variable rates already and the cash rate goes down, their variable rate will go down automatically.
Speaker 2:Oh, my sweet summer child.
Speaker 1:I've got to refinance because people will have this question right.
Speaker 2:So what I have learned with the bank will not change your rate until you start calling them. I've got clients that are on 6.8 right now. They're with certain lenders. If you're on a 6.8% interest rate, you're probably 60 basis points higher than what you need to be. You're probably paying an extra $1,000 in repayments a month that you don't need to. The bank is not there to help you.
Speaker 2:The bank is there to make money and to pay out bonuses. Yeah, that is it. They're not there for anything else. So if you think, oh, I've been loyal to this bank, they've really, really helped me no, yeah, no. Loyalty is not the aim of the game loyalty is 100, not the aim of the game. So when you ask that question, once the variable rate drops, the interest rates will automatically drop. You're seeing lenders right now this very second increase interest rates.
Speaker 1:Okay, just trying to squeeze the last little bit before it goes down.
Speaker 2:They're increasing with a random notification that you will get. At 2.47 AM You'll get a random letter that says we're increasing your interest rate by 0.1% because when it finally comes time for the variable rate to drop oh, they dropped my interest rate. Wait a second. They put it up in January.
Speaker 1:Why did they do that? No interest rate changes happened.
Speaker 2:So it's a very, very interesting time. If the Reserve Bank declares that they're going to drop the interest rate, you call up your broker or you call up your bank. Right then, because the squeaky wheel gets the oil.
Speaker 1:Okay, interesting See. I personally didn't know that. I thought it was like something that they adjusted accordingly, not obviously. Look, I'm not surprised that they don't, but I guess I just thought it was required. Not at all. Oh well, there you go, okay. So speaking of consumer confidence, well, we weren't really speaking of consumer confidence. We're just speaking of consumers, really, because Christmas, the ANZ Roy Morgan Consumer Confidence Scale, it actually rose by 3.6 points to 87.5 in early January. But that's just the traditional news bump Happens every year. Well, the stats that I found way more interesting was that 21% of Aussies say they're better off financially than this time last year, but 45% say they're worse off. That makes sense. Last year, but 45% said they're worse off that makes sense. 33% expect to be better off this time in 2026, while 29% expect to be worse off. That's very optimistic. Is that based in anything? Because I don't really see why. It seems like a downward trend overall.
Speaker 2:I can't make sense of the numbers. 21% are better off than what they were last year. The chances of this are possibly because their properties rose in value. Yeah, okay.
Speaker 2:Because we haven't seen much wage growth in the last 12 months and we've seen interest rates stay steady around that 6% to 7% rate. So, with 21% believing that they're better off than last year, this could be because their properties rose in value, whilst rents have leveled off. If they owned investment properties, there's a possibility that they got a higher rent. Yeah, um, especially leading towards september, october. Um, but the 45 saying that they're worse off than the start of 2024,. That makes 100% sense to me.
Speaker 2:And that's just because you and I both know Woolworths recorded record profits last year. Coles recorded record profits last year. You know we had Woolworths and Coles price gouging based upon supply chain issues. Supply chain issues Just because of a war in Ukraine.
Speaker 1:Which doesn't make any sense. We grow all our own food.
Speaker 2:I'm not going to get into that, but I do 100% understand that 45% of people are in a worse position because we can see retail spending is down. We can see hospitality spending is down. We can see a lot of companies construction companies, building companies because of their actual supply chain issues they have collapsed and we're even seeing now this is the one that really caught my eye recently. The star is going bankrupt.
Speaker 1:Yeah, I'm not going to say I'm not crying over that, but yeah, no, it is crazy that a casino is going bankrupt. Yeah, I'm not going to say I'm not crying over that, but yeah, no, it is crazy that a casino is going bankrupt.
Speaker 2:Where in the world? I think the only person that's ever bankrupt at a casino was Donald Trump. Outside of that, it's Sydney.
Speaker 1:It's also like they have no competition because the crown can't open right. No the crown is open, like the casino, though.
Speaker 2:No, the casino is open, oh okay, but it's only for people that have spent a hundred thousand dollars and up yeah, so it's a high roller thing it's a high roller. It's two levels. Okay. You can't walk in unless you've spent a hundred thousand dollars with crown in past calendar year. Oh, so they are struggling as well. So you have all these places with discretionary spending going down. So I can completely understand people are pulling back.
Speaker 2:They are in a worse position because back in 2020, 2021, yeah, you were locked inside and you know there was COVID, but you could buy whatever yeah but you had the government gifting you anywhere between $500, $750 tax-free, and then, on the back of that, you also had employers making record profits in that time. Okay, if you remember, properties were selling for $400,000 one week, $500,000 the week after.
Speaker 1:Yeah, and 0.1% interest rates or whatever. It was something crazy. So.
Speaker 2:I 100% understand the sentiment of consumer confidence in that area, that 45% being a lot lower than what it was last year, Because last year they could have walked in and thought oh you know what? Inflation is going to come down, this year Interest rates are going to go down, Everything is going to be okay. That didn't happen. That did not happen in 2024.
Speaker 1:And I can completely understand why people have lost all will or all optimism for 2025 because property prices don't go down no we have too much of a supply issue when it comes to property in new south wales and with construction companies going and going bust, it's not likely to go the other way anytime soon it's not.
Speaker 2:And then you have states like victoria that are introducing this land tax scheme. So you have people who had invested there in the past, now losing money on properties, yeah, okay. So they possibly feel worse off. And then the only people that are really excited are the people that bought in Perth this time last year. That's it. If you purchased in Perth, you're like yeah, okay, all right, you know what that's?
Speaker 1:the 21%, the 21% that say those are Perth purchases, yeah, yeah, the people that are better than what they were last year.
Speaker 2:that's everyone from Perth. Okay, so that is where I see that data. Now, the data that is very interesting is the 2026 data.
Speaker 1:Yeah, they think so a third of people think they'll be better off. Yeah, that makes sense. It's optimistic. I can see why. To an extent because obviously 2025, the cash rate is predicted to go down at some point.
Speaker 2:Don't get me started on that, but yes, continue.
Speaker 1:Yeah, no, that's a story for another day. But, just like in general, cash rate's supposed to go down. So therefore, theoretically, your payments should be less. Therefore, you have more money in your pocket. Yeah, theoretically, your payments should be less. Therefore, you have more money in your pocket. Yeah, but everything else so far is still going up. Everything else is still going up. Your woolly shop is going up, your beer shop is going up, all these other things that you're spending money on are going up. So I just don't really see why and wages are remaining stagnant.
Speaker 2:I just think Australians haven't had a good run for a while.
Speaker 1:Or at least post-COVID.
Speaker 2:But then again, no one's really had a good run post-COVID, no, but even before that, just the last good run Australians really had was between 2016 to 2018. But, then the bushfires started to happen, and then we had the COVID, and then as soon as we got out of COVID, everything started to go up in value and then everyone's stuck in their room and nobody could travel, like Australians have been beaten okay.
Speaker 1:It's crazy that people aren't okay. You say people aren't going to travel. People are still going on holidays. Everyone's still going overseas. I don't know where they're getting this money from nowhere near as much as what it previously was.
Speaker 2:So etihad and emirates now send their worst planes to australia, because australians do not spend anywhere near as much on travel as they used to. Yes, the peak seasons will be full, but if you see Etihad, they only run, I think, four flights out of Sydney a day now it used to be a lot more than that. Then you have operators like Qatar trying to buy into the market. So then Virgin will finally have some not Virgin, so Qantas will have some competition here in Australia. I, I know what you're saying. Oh, where are these people getting their money from? It's the same people traveling.
Speaker 1:There's actually less flights I've just found a quick, just a quick, thing um 32 rise in outbound travel in june compared to the previous year yeah, but the previous year was just out of. Yeah, it was locked down, you know.
Speaker 2:So 2021, 2022 and then 2023 okay, maybe we'll go travel, I don't know, maybe we'll get it stuck in lockdowns. But 2024 it is expected that people will travel. People treat covid like it's a regular cold. Now it's completely different to what it was in 2020, 2021 shout out to brian, who never thought it was a real thing. But like those are the things that we are seeing Less travel in and out of Australia. We're seeing less in and outbound flights from the major airlines. I'm certain Qatar is trying to increase. So then Qantas has some competition, but we don't know if that's going to happen. Qantas is. I'm pretty sure. Qantas did not make as much money in 23, 24 as they had done in previous years.
Speaker 1:I mean in part that's their own fault. They've been mismanaging that company now for a while and it's been very public post-COVID Like they've pissed off a lot of people, especially with the. They can't even get a flight on time. Yeah, so Qantas used to be unblemished. You wanted to fly with Qantas. They've never crashed a plane.
Speaker 2:Oh, jesus Christ, man, don't say that out loud. I'm so scared of flying. Oh, are you really?
Speaker 1:I'm sorry. Well, like nothing's ever bad has happened on a Qantas flight except now yeah, knock on wood, except for these delays and cancellations and stuff, which is obviously incredibly frustrating. So their brand name is really in the toilet right now. So this is a good time for any uh competitors to jump in, it's true? Um, back to the topic.
Speaker 2:Back to the topic. Less about contours, back to the topic at hand. Do we see consumer confidence rising? I think, just like with the interest rates, and just, uh, in 2022, 2023, you would have seen me do a,001 TikToks. They need to stop the rate rises because people don't feel the effects for three to six months.
Speaker 1:Yeah.
Speaker 2:People don't know how much more things are going to cost them. They don't actually comprehend until six months later.
Speaker 1:Because you don't literally feel it in your wallet yet.
Speaker 2:Yeah, You'll feel it immediately, but you'll be like like, oh, it's just a little bit extra this month that's, that's what.
Speaker 1:That's what I mean.
Speaker 2:Like you don't feel it immediately, it's just, oh, it's just a little bit extra this time yeah, and but six months later you'll be like, oh my god, my rates used to be this. I used to pay this much. I'd have this much money left over. You know what I'm not going to buy spend money on this. So even if they cut it cut the interest rates, whether it's next month or the month after, god knows when you're not going to see much more confidence. You're not going to see people get excited until around July, august you might see a sudden spike. You might say, oh, there was record numbers at this auction on the weekend. Okay, once interest rates come down, but it's an anomaly, but it's an anomaly, and then things start to get normal again.
Speaker 2:and things start to get normal. That's why I was so aggressively agitated About the rate rises. About the rate rises in 23 and 24. One thing I want to highlight Did you see that photo going around of Guy Sebastian performing? So, pauline Hanson.
Speaker 1:Oh, it was the Gina Reinhart thing, gina Reinhart.
Speaker 2:And then Philip Lowe was in the background.
Speaker 1:Yeah, I've seen a few things about that because they're meeting.
Speaker 2:Philip Lowe isn't part of the Reserve Bank of Australia anymore. No, why is he hanging around those individuals and why did we allow someone like that to be in charge of our interest rates? The everyday livelihood he's hanging out with the billionaire. Yeah, gina Reinhart is a and nobody knows how much money she has, but she's got billions of it. Okay, yeah, we know. So, if that's who he's associating with, it just does not make sense, right. Anyways, I'm not going to get into the interest, no, no.
Speaker 1:So what I wanted? There was another interesting thing just to cap off this conversation this optimism. 33% of Aussies think they'll be in a better position this time next year, but only 9% of them think that the economy is going to improve over the next 12 months. How?
Speaker 2:it doesn't. Did they release this survey on January 1st, when everybody was kicking off their news resolutions?
Speaker 1:Oh, maybe that's it yeah.
Speaker 2:They. They said oh yeah, you know what? I'm going to get this under control. I'm going to get this under control. I'm going to get this, it's all just.
Speaker 1:this is all just news resolutions.
Speaker 2:I'm going to be in better shape. I'm going to a new g-wagon, jesus, but like that's, that's that's probably what that is.
Speaker 1:That's the possibility of that if nine percent expect it to be better.
Speaker 2:Yeah 29 expected to be worse. Okay, so 91 of people think that's either going to stay the same or be worse yeah, which is not optimistic it's not because you're supposed to grow as an individual and as a country yeah, that's the thing, I don't know what.
Speaker 1:Yeah, so people themselves think they'll be better, but the country won't be. It's an interesting they're keeping these things thing, I don't know what. Yeah, so people themselves think they'll be better, but the country won't be. It's interesting, they're keeping these things separate when I don't think they really are.
Speaker 2:I just want to highlight. If you want to raise your consumer confidence in yourself and the people around you, you've got to and this is the inspirational part of Joe you're talking. You've got to be better as yourself. Yeah, you want to have more advantages next year get a good morning routine get your money under control.
Speaker 2:Okay, be motivated as hell. Attack your goals, because you should not have your money dependent on the economy. You should be able to create regardless, because we still live in a great country. Yeah, that does allow for that yeah, 100.
Speaker 1:There's still opportunity out there. It's just you're not just going to find it on the corner, though. You've just got to work for it a little bit more. And for our final segment, we've got a very fun little tip. All right, we've got a mate.
Speaker 2:No, no, no. So this is a new thing Michael and I thought of, because we've actually got listeners on this show, which is cool. Yeah, shockingly.
Speaker 1:They just hear you and I ramble. It's great.
Speaker 2:I don't know why anyone would listen to me. So we thought to ourselves every single week oh sorry, every fortnight we're going to be doing a client profile and we're going to try and decipher with me on the spot no practice what I would do in this scenario to be able to assist somebody with a mortgage.
Speaker 1:Yeah, and sometimes it'll be funny's. Sometimes it'll be funny, sometimes it'll be serious and actually helpful, and sometimes the answer is I can't help you. This is a bad financial situation. All right, so let's start it off. So, andy, he's a Woolies manager. He earns 60K a year. He wants to buy an apartment. The problem is he's worried that his gambling habit is affecting his borrowing capacity. How would you approach this?
Speaker 2:Jeez and crackers. Okay, so if this guy's earning $60,000 a year and he wants to buy an apartment, is the apartment to live in or is it the apartment to?
Speaker 1:The apartment's to live in, the apartment's to live in he can't borrow. He can't borrow, he can't borrow.
Speaker 2:Okay, Depending on where the apartment is in Australia. Obviously, the maximum at any point in time, even without the gambling issues and those sorts of things, the maximum he's probably going to be able to borrow is $280,000 to $320,000. Absolute maximum. You're not finding anything with that. It could possibly be less than that, so usually calculate it at about 5.5. I don't know if this client's got credit cards. There's chances he does, because if you're telling me he's got a gambling problem, okay.
Speaker 1:He's probably got a line of credit somewhere.
Speaker 2:He's probably got a line of credit and he's probably linked it to his sports bet account. Okay.
Speaker 1:Would it change if he was at 80K?
Speaker 2:It would change. He would be able to obviously borrow more. He could possibly purchase for around 500. So you're looking at apartments in fairfield, liverpool, holsworthy. Okay, I don't know if there's apartments in holsworthy, but it's something you're looking somewhere in western sydney?
Speaker 2:yeah, um, but if he's got a gambling habit, does he have a deposit saved? Um, let's say he does. Okay, if he's got a deposit saved and we have to verify it via genuine savings that he's been able to save a deposit so he can qualify for the first home guarantee there's a good chance we're going to be able to see his gambling habits. And if we see that the gambling habits are really striking, then we can't help him. But and I digress but if he's doing a $20 multi a week, which I know some people have the self-control to do, yeah, my brother does.
Speaker 1:He does literally $2 bets just for the fun of it.
Speaker 2:Okay, I'm not going to get into that, but if he's doing $20 a week, okay, maybe we can negotiate that. If this guy's got a serious gambling problem and we can see him withdrawing cash every single time he's going to a pub, if he's going to the star, if he's going to you know, bank sale sports, anywhere like that, or if we could see Sportsbet consistently leaving his account, then we can't help it.
Speaker 2:What we can do is recommend calling the gambling hotline and freeze his accounts and possibly if he's got a friend around or if he's got his parents or if he's got a brother, give them authority on the account, okay, to make sure that this person can't withdraw money. So we have a client right now that has a bank account, father has authority over the bank account and two people need to sign off if withdrawals are ever made. The reason why we've set it up like this, or they set it up like this, is so that the client has $400 every single week going into that bank account to save as a deposit and then he receives his weekly paycheck after that. So that way, over the last four years, he's actually built up $160,000 deposit. No, it was $80,000 deposit. Heaps of money, that's a lot of money. Yeah, so he's been able to build up that deposit, but that's because his dad has forced him into it and he actually can't withdraw money from that account unless both individuals sign off, yeah, okay.
Speaker 2:And that's a great way to be able to help someone like this, because if they don't have access to the money, they can't spend it. Yeah, okay.
Speaker 1:Because gambling is a big thing in Australia. Do you find a lot of clients have, like you can see, their gambling habits when they're applying for loans and stuff like that?
Speaker 2:Surprisingly, the clients that I deal with day to day when it comes to first home buyers or when it comes to people purchasing an investment. Surprisingly I don't see it, but that's because when you're purchasing a property, it is a large purchase, so you don't often see the sports bets, you don't often see the TABs and stuff. They do come up, I would say one in 10. But when you're dealing with the personal loans, the car loans, the asset loans that's when you really start to see it Interesting, that's interesting.
Speaker 2:But anyways, guys, thank you so much catching this episode of the finance show with joe. As always, I'm joe I'm some schmo. That came out right and we'll catch you on the next episode.
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