Latest / Money Grows on Trees / #308 - The 5% Deposit Scheme Is Bankrupting Young Australians (Here's How)

Transcript

#308 - The 5% Deposit Scheme Is Bankrupting Young Australians (Here's How) · Money Grows on Trees

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  Today I announce that under a Labor government you'll be able to
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  buy your first home with just a
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  5% deposit. This guy's an idiot. Because we want more
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  Australians to buy a home of their own. We want them to do it with more
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  After Labor, after Albanese the idiot came in. Idiot. The
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  Australian people are feeling the impact of Labor's immigration policy.
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  What the hell did they expect when they started migrating a million people here? It's
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  the stupidest policy, this Prime Minister is the worst Prime Minister we've
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  She's got mortgages. CHEAPER! CHEAPER!
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  CHEAPER! CHEAPER! CHEAPER! CHEAPER!
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  I'm sorry, you can't buy this $600,000 home because you don't
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  have $60,000 in savings. Nah mate, I've just found out
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  If you have only $14,000 in the bank, you should be buying a $600,000 home. I'm
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  Lloyd James Ross, seven-figure investor and entrepreneur, and I've helped thousands
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  of business owners and professionals turn financial stress into
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  success. If you're stuck in old money habits, overwhelmed by investing,
• 1:09
  or unsure where to start, this is for you. I'll give you the mindset
• 1:13
  and strategies to take control, grow your wealth, and achieve
• 1:16
  financial freedom. It's time to make your money work for you.
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  All right, now it's time for reactions where I pull up some reels and
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  I react. This is a lot of fun. It gets a lot of attention
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  on social media. So I love doing it. So let's do it. Let's not hold back. Let's
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  I am trapped in renting in Sydney. Trapped in
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  renting. You don't have to be trapped in renting. I rent. I don't feel trapped
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  Buying or renting a home has become unaffordable for many
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  Yes, and people anticipate and expect it to go up by another 40%, which is ridiculous, which
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  it won't. So it'll come crashing down at some point. We don't know when. But
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  when young people can't buy houses, it's not ideal
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  for a country. And I would anticipate that the
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  next government will be kicked out because of the policies they've put in place. And
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  you'll see a massive reduction in demand because
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  immigration will change and the policies around housing will change and
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  we'll go through a different cycle. And when you've got levered property, it sucks
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  when it's going down, but it's not good for young people to
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  have to wait 40 years to buy a house. Ridiculous. So. This will change
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  at some point. Swings and roundabouts. Graham's
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  right. He's talking about banks ripping people off and they
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  do that. And there's just no regulation around the banks. Like you can't just go sue
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  the banks. I mean, they've got endless pockets. The ombudsman's a
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  toothless tiger. I think a lot of customers in banks,
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  they're the recipient of a monopoly. And this is why a monopoly is
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  unideal. And so I think the banks need a lot
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  more oversight, not more regulation. There needs to
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  be more consequences for just the basic service
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  to clients. And I think that with the deregulation
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  of certain online banks, they're probably going to see that. But the banks are like old,
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  tired institutions and they're just awful. So the fact that they're
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  ripping off customers and people losing money, yes, you've got to check your accounts,
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  but the banks are at fault still. How they can't tap
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  into your accounts and see if you can't afford homes instantly is ridiculous. Next
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  Today I announced that under a Labor government, you'll be able to
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  buy your first home. with just a
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  5% deposit. This guy's an idiot. Tober, it's happening. It's
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  happening. Because we want more Australians to buy a
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  home of their own and we want them to do it sooner. We
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  So we can win the next election So we put all these ridiculous schemes that
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  don't work long term and put the Australian consumer, you know into
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  a deficit These poor people buying at 5% deposit. Look
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  at him. He's like the bloody devil This fella don't like him needs to go 5% deposit
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  schemes gonna be ridiculous all the these are bag holders They're just gonna be stuck with the
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  debt and when interest rates go up, they're gonna get hurt. They're gonna go broke They have to sell their home. This
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  is not really for the people. It's to win the next election these
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  types of Yeah, bells and whistle type things don't work. Anything the government's
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  a part of doesn't work. So if it's got government before scheme, avoid
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  I'm sorry, you can't buy this $600,000 home because you don't
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  have $60,000 in savings. Nah, mate, I've just found out
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  If you have only $14,000 in the bank, I don't care how many cool
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  bells and whistles and government incentives there are out there and blah, blah, blah, you
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  should be buying a $600,000 home. Just... Don't be
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  a dick. Don't be an idiot with your money. $14,000, buying a
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  As a first home buyer, I'm eligible for the government's new help to buy scheme,
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  meaning I can buy a home with only a 2% deposit. Okay, but
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  with only a 2% deposit, that means your mortgage repayments will be through
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  the roof. Yes. Wrong again. Since the government will be purchasing 30% of
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  the property, I'll only have to be making repayments on a home loan
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  at 68% of the home value. Meaning on this
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  $600,000 home, I'll only have a mortgage of $408,000. But
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  what about stamp duty? I can couple the help-to-buy scheme with
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  my state's stamp duty exemption to reduce my upfront costs
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  If you need all these bells and whistles to buy a home, you
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  shouldn't be buying a home. Like, what a mess.
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  How complicated. These... incentives and
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  so forth always come to bite you back as well. These government
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  incentives, 2% deposit, like if you're borrowing 98% of your home
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  value, you're in a lot of trouble when rates go up. So all
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  these bells and whistles might seem fun and exciting until you're in a property you
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  Many young Australians have lost hope of owning a home. And
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  if they can't build a home, it's very hard to start a family. Now
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  that might in part explain the collapse of our fertility rate.
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  It's 1.5 births per woman, the lowest in our history. Yet,
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  I'll tell you why too, is because if both the
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  husband and wife have to work just to afford a place to live, there's
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  just no room in it for a mother to stay in with the kids. It disincentivized being
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  a mom. It disincentivized having kids. That's what they've done, incidentally, because
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  Yet Australia is growing rapidly, but it's not because we're having more children.
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  So what's driving our growth? The answer, Deputy Speaker, is
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  net overseas migration, or the NOM. Historically,
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  After COVID, after Labor, after Albanese
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  the idiot came in. Idiot. Dumb. Triple immigration.
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  What are you stupid? What do you think is going to happen? Pump
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  Dumb. Yes. Yes. It's a stupid policy. and
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  What the hell did they expect when they started migrating a million people here? It's
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  the stupidest policy. This Prime Minister is the worst Prime Minister we've
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  ever had in our country. Needs to go. Awful, awful, awful,
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  awful. New policies for the citizens of the country. They're favouring
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  people coming in more than the citizens. It's an absolute joke. Joke.
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  They'll get kicked out next election and they're gone. Just quickly, if
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  you're ready to take control of your finances but feel stuck on where to start,
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  I have a solution. My book, Money Buys Happiness, simplifies
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  investing and wealth building with practical steps to help you achieve financial
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  peace. Get your copy via the link in the show notes and let's get your
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  Let's find out today how much you need to be earning to comfortably afford a
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  $1.4 million property like this one in New South Wales. Breaking down
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  the upfront cost for this property purchase, we're going to put down a 20% deposit,
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  which means our down payment on this purchase will be around $280,000. Our stamp
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  duty or better known as property taxes will be a whopping $59,000. And
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  since we are putting down a 20% deposit, we don't have to pay any lenders mortgage
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  StamDuty $59,000. What a pernicious tax
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  by the government on people. Fancy having to pay that much in StamDuty. Just
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  damn, damn, damn. What a ripoff. That's a huge scam, the StamDuty stuff.
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  This means as an upfront cost to purchase this $1.4 million
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  So you need to buy a $1.4 million house, you do need $345,000. This
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  is without mortgage insurance and a 20% deposit. If you took the same
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  $345,000 and you invested it into a high yield index fund of some sort, it'll
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  probably pull in around about $18,000 a year tax-free income
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  to you just so you know. So the equity position in a
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  home, yes, it's geared, yes, it's levered against a property of $1.4 million but
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  unless that home grows well, it's not always the best place for
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  equity. There's other options out there that just you don't have to take on
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  like a million bucks worth of debt. And the house is crap anyway.
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  So the interest is 5.5%. So
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  you're paying 5.5% to live in a house, but if you rented it, you'd
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  pay about 3.5% because that's what rental you drew out. So you're making 2% extra
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  each year in your capital by renting at the moment instead of buying. That's why I
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  feel like renting at the moment is a more effective cash flow position than buying. And
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  you can take that $350,000 of equity, put it away and
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  pay for half your rent or a lot of your rent. And that's what we do. Our
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  portfolio pays for our rent. I just don't think buying
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  is a better mathematical scenario right now than renting. And
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  people often say, yeah, but you don't sell your house to your old and flipping
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  retired anyway, so what does it matter? I just think cashflow is more important
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  than capital gains when it comes to real estate and anything for that matter. There's
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  better places I think to put your money if you get educated. Yeah,
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  Hong Kong. That makes sense, because it's...
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  Hong Kong's the city right next to China. It makes sense that it's the most unaffordable. Sydney?
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  Look, if you're going to live in Los Angeles, San Jose, Hong
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  Kong, these are very vibrant economies. You can become a multi-multi-millionaire. They're
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  millionaire factories. It makes sense. But what, Melbourne? Adelaide?
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  There's no... Adelaide, do they even have the internet there? What I
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  find funny with this is you've got like Perth,
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  Melbourne, Adelaide. Adelaide is sixth. Australia's
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  got like five cities in the top. That's insane. Why?
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  I mean, I know why, but we need to flip that and change
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  that. It is not worth 13 times earnings. We're
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  Cheaper electricity. Cheaper mortgages. Cheaper.
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  Labor has real lasting plans for cheaper, cheaper, cheaper. Just
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  look, let's be frank. This bloke makes politicians, traditional
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  politicians look good. That's how bad he is. The policies they've
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  put in place have made living in this country unbelievably difficult
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  for most people, right? It's been crazy. To
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  see how bad the leadership has been in Australia. It
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  just couldn't have gone worse That's what I think and I did a post next the
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  other day I said has out as Anthony Albanese's government done anything effective
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  since it's been in power and no one could I can't pinpoint anything All
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  I've just done is waste money. That's all they've done. I cannot think of one
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  good thing They're just such a
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  toxic addition to this country,
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  and I can't wait for them to... If you vote Labor, you've
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  got to have... I mean, you just must be brainwashed. I don't know how you can vote for
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  more of this. This is all you're getting is more cost, more cost, more cost. Please
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  don't be an idiot in the next election. Don't vote this Muppet back in. Unbelievable.
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  All right, there's reactions, of course. God,
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  there's some really brutal reels there that
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  we reacted to, but there's, you know, I think with the reactions this time, all
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  I can do is laugh because it's laughable. It's a
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  circus out there. Between the banks and
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  the political environment in Australia and the housing market is
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  a circus. Thanks for listening to Money Grows on Trees. If you enjoyed the
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  episode, leave a five-star review on Apple Podcasts and Spotify and
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  subscribe to us on YouTube so you never miss an episode. And
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  if you're serious about building wealth, make sure to check out the links in the show
• 12:55
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