1
00:00:00,040 --> 00:00:02,920
Speaker 1: Growing idea in economic circles in America that young people

2
00:00:03,040 --> 00:00:06,520
Speaker 1: might never own anything. It's based on recent news that

3
00:00:06,559 --> 00:00:08,719
Speaker 1: a new car average price has now cracked fifty thousand

4
00:00:08,760 --> 00:00:10,760
Speaker 1: dollars for the first time. It was added to by

5
00:00:10,800 --> 00:00:14,120
Speaker 1: the presidential idea that we have fifty year mortgages. See

6
00:00:14,120 --> 00:00:16,160
Speaker 1: in the states that got thirty years, that's pretty standard,

7
00:00:16,440 --> 00:00:19,040
Speaker 1: and they have the fixed interest rate that lasts decades. Here,

8
00:00:19,079 --> 00:00:21,239
Speaker 1: of course it's completely different, but it's all based on

9
00:00:21,320 --> 00:00:24,400
Speaker 1: the thinking that one, more and more people can't afford stuff,

10
00:00:24,400 --> 00:00:26,479
Speaker 1: and two, if they can, they will need to borrow

11
00:00:26,520 --> 00:00:29,320
Speaker 1: basically forever to do it. Now. The wisest piece of

12
00:00:29,360 --> 00:00:31,320
Speaker 1: advice I ever got when I was about eighteen years

13
00:00:31,320 --> 00:00:33,360
Speaker 1: o thos in the bank trying to sort a mortgage

14
00:00:33,440 --> 00:00:35,320
Speaker 1: and we were tossing numbers about in the bloke behind

15
00:00:35,320 --> 00:00:37,479
Speaker 1: the counter swung his computer screen around to face me

16
00:00:37,600 --> 00:00:39,400
Speaker 1: on it. With the numbers I'd be paying, what I

17
00:00:39,479 --> 00:00:42,440
Speaker 1: was borrowing, what the interest rate was, what the monthly

18
00:00:42,440 --> 00:00:44,760
Speaker 1: bill would be in the killer, the killer, the bit

19
00:00:44,840 --> 00:00:48,080
Speaker 1: that showed just how much in interest I would ultimately

20
00:00:48,159 --> 00:00:50,200
Speaker 1: give to the bank over the period of that debt.

21
00:00:50,240 --> 00:00:52,279
Speaker 1: Needless to say, it was more than the loan itself.

22
00:00:52,840 --> 00:00:56,640
Speaker 1: Compound interest either your friend of your saving your enemy

23
00:00:56,840 --> 00:00:59,160
Speaker 1: if you're in debt. That pretty much changed my view

24
00:00:59,200 --> 00:01:01,520
Speaker 1: on debt. But a fifty mortgage is clearly designed to

25
00:01:01,600 --> 00:01:04,360
Speaker 1: lull you into the idea that things are affordable, just

26
00:01:04,360 --> 00:01:07,080
Speaker 1: don't worry about ever paying it off. It's probably why

27
00:01:07,080 --> 00:01:09,920
Speaker 1: they're putting mortgages into the school curriculum as we speak

28
00:01:09,920 --> 00:01:12,600
Speaker 1: in Britain at the moment. If every kid came out

29
00:01:12,640 --> 00:01:15,080
Speaker 1: with just a basic idea of the way things work

30
00:01:15,080 --> 00:01:17,520
Speaker 1: in the real world, we may solve ourselves a lot

31
00:01:17,520 --> 00:01:20,160
Speaker 1: of long term issues and a lot of personal heartache.

32
00:01:20,319 --> 00:01:21,960
Speaker 1: And that's before we get to the fact that a

33
00:01:22,000 --> 00:01:25,160
Speaker 1: lot of this country so called prosperity, it's a perception,

34
00:01:25,440 --> 00:01:27,560
Speaker 1: and the perception is created by the idea that you

35
00:01:27,600 --> 00:01:29,759
Speaker 1: have more money simply because somebody told you your house

36
00:01:29,880 --> 00:01:32,200
Speaker 1: was worth more, or if you're in the market and

37
00:01:32,280 --> 00:01:36,080
Speaker 1: video for no particular reason just added another nine zeros

38
00:01:36,120 --> 00:01:39,520
Speaker 1: to their market cap. If more people understood debt both

39
00:01:39,520 --> 00:01:42,440
Speaker 1: its options, it's pitfalls, upsides and problems, we would see

40
00:01:42,440 --> 00:01:44,520
Speaker 1: the idea of a fifty year mortgage for what it is.

41
00:01:45,040 --> 00:01:47,600
Speaker 1: But basically, the state of the world both at personal

42
00:01:47,640 --> 00:01:51,240
Speaker 1: and national level. Is the way it is because we don't.

43
00:01:51,880 --> 00:01:54,800
Speaker 1: For more from the Mic Asking Breakfast, listen live to

44
00:01:54,880 --> 00:01:57,960
Speaker 1: News Talk set V from six am weekdays, or follow

45
00:01:58,000 --> 00:01:59,520
Speaker 1: the podcast on iHeartRadio