People hate negative geraing because they thoughts “it distorts the market, causes property bubble, allows the rich getting richer, and leaves the poor no where to live”. They tend to blame negative gearing for their not being able to afford a property. While, is it ture that negative gearing causes so many negative things? Will abolishing negative gearing solve all the problems?
I don’t think so. Some people think abolishing negative gearing will decrease the property price dramatically and fix all the problems we have. I just don’t think so.
Instead of hating negative gearing, I think we should ask ourselves why we cannot afford a property and what we can do in order to be able to. After all not many of us are willing to live on the street.
So what people CAN do in order to be able to have a place to stay?
According to Brad from Brighton VIC, here is a list of what he and his wife had done.
1. Start small.
2. Work up.
3. Work Overtime.
4. Get a 2nd job.
5. Sell the new car!
6. Use a Woolworths Nokia – there, I said you could still have a mobile and try their $29 plan!
7. Take your lunch to work.
8. Take a thermos to work.
9. Eat home and rent a DVD.
I basically summarise the above as “Work hard and live simply“. I know that some people are not going to agree with me. Yes, you need to live smart as well. However, some people did agree:
I totally agree Brad. We managed to purchase our first property by ourselves reletively young (23 to 24, a sensible unit in the East, wouldn’t touch the West with a 50 foot pole) and we saved, worked overtime when we could, didn’t buy stupid unnecessary gadgets like the Iphone or whatever and so forth.
I just shake my head at those my age who complain about house prices yet brag about how they blew $300 at a nightclub or brag about their $89 Call of Duty game they got. Ridiculous.
If you hate negative gearing and think you cannot afford a property becasue of negative gearing, I think you should seriously consider the suggestions from Brad.
Negative gearing is not the problem.