I came across an article in the Australian news talking about the top financial worries of people, with *groceries, petrol and rent being major factors. However, another interesting thing was that out of the 2000 people surveyed, the average indebted Australian has around 46,000 dollars in debt not including their mortgage.
While I haven't lived or worked in Australia for a long time, that is 10,000 more than my salary eighteen years ago. Yes, the salaries have gone up a lot since I was there, but if the average salary in Australia is currently around 70,000, that means that those with debt obligations have two-thirds of their salary in debt. That is quite extreme in my opinion and much of this debt is on credit cards and in BNPL services.
Another interesting metric extracted was that the average amount people had in savings had dropped from 15,000 to 5,000 over the last year - which is a 66% reduction. Again, quite extreme, but this was taken not including investments, so it is possible that people have awoken to the ridiculousness of savings accounts and are starting to learn how to make their money work for them a bit harder.
But, what has been interesting to note over the last few months is that while there are still plenty of FUD articles, pretty much every article looking at personal finance is at least mentioning the rising popularity of crypto investment as an option. It normally comes with a caveat of risk and volatility, but it keeps entering the mainstream.
“Digital currencies will continue to be a reckoning force in the year ahead, despite their volatility,”
Not just the year ahead I suspect, as even going into a bear market, the potential of the bull will likely see the more savvy people entering in during the FUD, instead of the hype. I think that many are (slowly) learning that buying the peaks is not a great strategy and with more turning to actually research a little, they will make their larger forays into crypto when prices are receding. Combined with the crypto regulars moving their wealth into yield earners for the bears, this can mean that there are markedly less sellers, keeping prices more buoyant and the floor higher than many may expect.
I think a lot of people are waiting for the 3.5K Bitcoin again and I think that while it will fall a lot after the blow-off top, it isn't going to drop that far back and it might settle more at the 12-20 mark. But, that is some time off yet unless something cataclysmic happens, as currently there is plenty of support between here and there.
And this is going to set up for an interesting decade ahead, as in another article I was reading, the Boomer generation is getting to the end of their shelf life and will now start shifting around 230 billion dollars a year to the generations below them until 2050 - which is currently about 20% of the entire Australian GDP. This money was largely made when times were far better to generate wealth and then used to invest and essentially squeeze the younger generations out of the housing market almost completely. Now with this transfer starting to gain traction as time wears on, the recipients are very likely to use this money to both increase consumer spending and also invest.
I see this as a very bullish sign for cryptocurrencies that offer returns on investment and especially those that people feel add value to their lives. I don't just mean financial value, it will also be personal value where people feel the yare getting benefits of using what they are buying. This is just normal consumer behavior where we think that something is worth buying for a reason, but when what is worth buying has that reason plus it is able to provide a very real ROI, it supercharges its attraction.
As I have said many times, I am bullish on Hive and Web 3.0 in general as it will increasingly capture not only the wealth of users, but their attention and efforts, installing the digital economies into our daily lives with increasing ease. I think for many people on Hive, this is already quite apparent where much of the activity we are performing online, is Hive or crypto related already, including much of what we consume. Being able to plug into the economy here in some way is a big part of the attraction and makes Hive very sticky, with even the people who complain about it incessantly, unable to leave.
While there is definitely a knowledge gap forming, I do think more people are moving into crypto and once they do, there really is no turning back. So far, I have never met someone who gave it a go and then, left for good, even though they might not have had a great experience originally. Eventually, all come back.
But it isn't only that, what I have observed time and time again is that the people who start investing into crypto, are suddenly spending much of their time diving into crypto content of some kind, even if only a fraction of their wealth is tied up in it. There are several reasons for this including the crypto fraction likely outperforming the rest of what they invest, but one reason is that it is far more interesting on so many levels than what people are accustomed to with finance. As people onboard into the idea of the social layers applied atop the frameworks, they will find it quite addictive and ironically, one of the most educational experiences they will have in regards to their own financial wellbeing now and in the future.
We are moving rapidly into a confluence of conditions that are going to be near prime for crypto to take hold in the public narrative and become normalized through daily interaction. The investment flood might not be immediate, but as that Boomer money starts leaking into the crypto industries, there will be rises across the board on anything that is able to capture the attention and activity of consumers.
As far as I see forward, while it might be hard to predict which tokens will thrive and which will fail, the development and maturing success of he crypto industry as a whole, is inevitable. The more people fall into the traditional economy debt traps, the more certain I become.
Taraz
[ Gen1: Hive ]
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Seems like a lot of money from China works its way into the Australian economy. Pushing up housing prices, farmland prices, and other commodity prices. I don’t know if Australia is still a great place to hide Chinese money if things and relationships deteriorate between the two countries.
yes it does in several ways. Chine also buys most of Australia's raw materials. That ends eventually.
I totally agree with you regarding the future of cryptocurrency. And while it is not taxed, we must hurry to master it.
There will be no avoiding taxes
One of the things I can’t figure out is the drive to utterly destroy the global economy. These idiots at the top prosper when things are doing well. That’s one of the things that keeps me up at night, why the hell are they so stupid? Lol. Boomers!
For sure one of the best things about crypto is it’s interesting! There’s a lot of things going on and I think because a lot of it is development related it makes for an awesome bit of reading. Stocks are horse shit really. Just fake paper with nothing behind it most of the time, and even if there’s a company most don’t care about the company at all but just invest a little bit to do so.
I’m still driving to get more friends and people around me on here! No success so far but going to keep on going. The stickiness of the hive mentality is really appealing. Earning things for doing and having skin in the game long term is attractive. It’s the pitch I guess I sick at lol
It doesn't matter for them, as they convert money to required assets, so no matter what the economy is, they can still earn. Everyone needs a place to live. I don't think most boomers realize what has happened, even though they were part of it.
I am using Credit Card but to that extent that every month I will pay the full amount just to get some points from it. BNPL I'd bad and I will never avail it. I guess savings has reduced last year due to the fact that people lost their jobs and thus they have to being out money from savings or even take a debt.
if careful, using a credit card can be useful in many ways - the trick is, paying it off completely.
I've seen some of my acquaintances invest in crypto. But the sad thing is that in this case their knowledge is much less. So most of the time they are facing losses but not leaving behind. I'm also excited about Hive and Web 3.0. Because Web-3 is becoming very popular. Hopefully this will put digital currency in the lives of users.
I think the tokenization model of the internet is already adopted, now it just needs the economy connected that normal people have access to.
People are more attractive towards crypto currency and other tokens nowadays, but they forgot its high volatile, it may collapse any time 🙄 as we witness 2 years back when BTC reached only 4500$. By the way your article and thoughts are interesting and I also believe we are in a bull run of hive but may be till 25th december.
yes - highly volatile with a very upward trend so far :)
Is $70.000 average salary yearly or monthly? Per capita income is $8.600 and per capita debt is $5.400 in my country. That is almost two-thirds. Is it a holy ratio? 😁
yearly in Australia - there is less and more of course and it is in AUD, which makes it far less in US.
That does look like the golden ratio!
I think when cryptocurrencies were first adopted, they should have added for the future because that's literally where we're headed..
A crypto revolution
We are always headed that way - let's just hope it is better than the past
I feel the same thing. Scary part is the amount of debt around and I have none if you exclude the mortgages on 2 houses. Sounds worse than it is as one is basically paid off. What happened to not buying things you can't afford and not relying on credit as once you fall into that lifestyle we all know how hard it is to climb back out.
The threshold on what is suitable to take debt on is getting lower and lower, with daily basic items moving into credit targets now. With increasing prices and wages that do not follow anywhere close, it is going to mount to be a massive issue with the only solution, a very large correction.
A very large correction or what else as many will be ruined if that is not the case. I cannot think how many are living right now with huge financial stresses that they are not accustomed to doing. Some of us know what this is like and why going there is not an option.
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Yeah - I wonder how many have taken the "screw it" approach since the world seems messed up anyway, forgetting that debt doesn't just disappear.
I have to wonder, were they aware that that's what they were doing? As that never gets covered anywhere, all the investment advice was always buy houses and rent them out for passive incomes.
Also have to wonder, what are we doing now that's pretty much the same thing that we may not realise we're doing or simply don't care about because not our problem and all that matters is our own immediate gainz?
There's probably many blatantly obvious things but nothing's coming to mind right now ^_^;
Do you count as crypto content? As I still haven't gotten any further than you and the handful of others that write stuff like this that I happen to be watching XD
No, I don't think they did, at least the average person.
Exactly. there are things in crypto around this too of course - like the buy and sell mentality, without actually building anything to generate value for users.
I think you read far more crypto content than most people - :)
Honestly, I think the most research I ever did was trying to work out what my head-universe was using.
Turns out they're doing some interesting things with Time, not to be confused with time, and I still don't understand
Applications to current life I'm still clueless about XD
Do you think we're shifting out of the buy/sell mentality yet?
I buy peaks and I am fine 😎 could be better but at least I have motivation to buy dips😉
As long as there is a bigger peak on the horizon :)
I think human greed is boundless :D
If my son ends up getting anything significant from this boomer, it’ll be because of crypto.
I inherited very little from my “greatest generation” parents. Most of what they’d built up after decades of hard work vanished as payments for nursing home care.
I hear you. I think there is a definite gap in the boom generation too. At least my parents didn't leave anything, other than some debt.
I hope I can do better for my own daughter, but if I can, it will be because of work here.
BNPL is a cancer.
I just can't believe the positive spin it receives in the mainstream media seemingly daily.
Just encouraging young, naive people to rack up debt that they'll struggle to repay.
Trapping them in the cycle longer.
But no...
BNPL, credit and mortages = good.
Crypto = bad.
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It is insane how they promote them. And then, give Only Fans as a mainstream viable option for earning a side hustle income.
They say the high level of divorce is contributing to the level of debt in the land of Oz. The man moves out of family home, has to pay mortgage and also rent a place. Gets into debt. Those Super's down there are quite the retirement gift down there though. 250K into a liquidity pool would get you some return.
I think divorce everywhere is a great money spinner, no wonder Tinder gets so much publicity. Ever wondered how much of it is engineered - divide and conquer and all that.
I suspect that many of the people who have been paying their super diligently, in thirty years might find themselves in trouble. Much of the potential of it is being eroded by the massive amounts of debt taken on the future over the last couple years.
Crypto is definitely more interesting than traditional finance :-P so I agree with you that once someone invests anything into crypto, they're probably going to consume a disproportionate amount of crypto content. Good thing we have Hive blogs for that part of it
I reckon it will always be somewhat niche as people will get their "news" from MSM, but in time, it is going to become more popular among the connoisseur crypto enthusiast :)
Australia has a culture of debt, and I fear that it will soon come back to haunt us.
It will haunt for generations.
That is always one thing I have always decide to put in the back of my mind to eradicate debts because it's definitely destroys plans for the future in other to enjoy a peaceful life.
I also. Strongly believe that financial education without crypto education itself if rubbish.
Whenever I hear people speak about finances in gatherings and try to inspire, I see so much ignorance when they do not mention crypto knowledge and blockchain.
It is actually shear ignorance for any millennial at least to not have heard about crypto. Many have this fear I got when I was about changing school..
And yes it looks like a total change of school, a sort of street smartness and a new line of thinking entirely different from the usual.
I strove to know more and sure I still do.
Thanks for your post.
Thank you!
Hey @tarazkp, may we ask you to renew your support to HiveBuzz and vote for its proposal for 2022? That would be much appreciated! Your feedback, if any, is welcome of course. https://peakd.com/me/proposals/199
That debt ratio is pretty much everywhere. A local stat recently published in my country is that the average citizen is spending 75% of their salary financing debt! This is insane! I don't see this getting better, rather worse. Accumulating an asset that appreciates much faster than hyperinflation over the long-term is the only hope. That, or earn more money!