Monday, April 03, 2006

Death or Debts?

In the Age newspaper today there was an article about inheritance. Cheerfully they're warning us that if we’re counting on landing a large inheritance to pay off the mortgage and fund the world trip then we have not bought ourselves a ticket to Reality Land.

Researchers have found that the odds of someone landing a large bequest are small, with only one in every 100 inheritances big enough to buy an average house in Sydney.
(That high? I thought only one in every 10,000 people could afford to buy a house in Sydney). The University of Canberra's National Centre for Social and Economic Modelling has found that more than half of all bequests in Australia are less than $20,000 and just 18 per cent worth more than $100,000.

Their study also found that people on higher incomes have a better chance of inheriting. "Those with the least need have the greatest chance of inheriting a significant amount," they say. Only 1.4 per cent of adults receive an inheritance in any given year. The boffins are at pains to stress that even though the average inheritance is currently $64,000, that figure is artificially inflated by a small number of very large inheritances that went to those who were already wealthy. (Typical isn’t it? Smug rich bastards just get richer when Grandma carks it, and they’ll be the ones who end up emulating Kerry Packer’s ‘achievement’ of only paying $100 per year in personal income tax and calling everyone not a billionaire a bludger....)

Sorry, off my soapbox and back to the subject at hand. With the typical inheritance beneficiary aged under 50, and the majority of bequests less than $20,000, the study concludes most inheritances will probably be consumed well before retirement. Therefore most baby boomers, Generation X-ers and Y-ers will not be able to depend on that increasingly mythical 'big inheritance' to see them into debtless retirement.
If anything, all they’ll be able to do is buy a brand new Hyundai Getz and spend a week at Surfers Paradise.

Well, well, well…. The above article would be the paper evidence to flash under your folks noses, wouldn’t it? That’s right, those selfish early baby boomers (born in the forties) who all took packages at 55 and immediately splashed out on a new 4WD and matching caravan. Open your eyes: the roads are full of them – beaming Bruces and permed Pams in their gleaming road trains: hogging the highway as they tootle leisurely along at 80km p/hour on their merry way up to Queensland to avoid the chills of a southern winter. Whilst we are roughing it in our tents at the non-powered sites, the Bruces and Pams only leave the comfort of their 5-star mobile homes to squelch across the gravel in their rockports to use the ablutions or go buy some steak for their min-webers.

Not that I blame them – my mockery is just an obvious sign of jealousy. My parents are part of this generation – the SKIPs – Spending the Kids’ Inheritance Pronto. Dad was a highschool teacher (and a market gardener in his spare time; also a cricket coach, cricket player, tennis player, golfer, marathon runner, champion basketballer and art-class devotee), who decided that thirty years of teaching sullen teenagers the mysteries of chemistry and biology was long enough. Mum was a clerical assistant (after fifteen years full time mothering of three children; also reading newspapers to the blind, helping in the school canteen, Meals on Wheels, listening to children read, being the wardrobe mistress and costume designer for the local dramatic society, playing tennis, umpiring netball) who stuck at her job until she was 63 before receiving her Seniors’ Card in the post. She was the lowest paid in her office but could run rings around her supposed superiors - they were just 20 years younger when they entered the workforce.

My parents deserve to be SKIPs and I think I can confidently say that my two brothers would heartily agree with me. They managed to raise us on one piss-poor teachers' income when we were young and we always went away somewhere every single school holidays. We had our very own cricket pitch in the back yard - complete with nets - and somehow managed to survive on the tragic Australian dollar conversion rate when Dad transferred to Aberdeen Scotland for a year. (Although I never want to see another digestive biscuit or turnip-loaded anything ever again). Later they put all three of us through university with the staggering expenses that it entailed, especially the accommodation costs for three country bumpkins experiencing pub crawls, toga parties and skullduggery for the first time. At term holidays, their street was full of gas-converted early 1970s volvos that Dad had found for us: safe and cheap.

When we were finally off their hands, they must have sighed with relief, kicked up their heels with joy and whilst rubbing their twanged back muscles then looked around their house with dismay. Picture the scene: "Oh this is juuuust Great – we’ve got a house built in the 1960s that we’ve decorated in a late 1970s style in time for the 1990s. Our volvo is approaching 30 and the toyota has a beehive flourishing amongst the rust-encrusted back fender. The caravan is a bright-orange 1976 leaky nightmare and we’ve only been overseas once: 20 years ago. We've both shopped exclusively at Target - (Mum to Dad) - and you've essentially bought the same brown shirt, jumper and trousers since 1973 and I've either sewn my own or rustled through the sales racks."

So, for the first time in their lives, they started to live, really live. You know – buy a chocolate mudcake instead of the dried-out ‘butter cake’ from Balfours. The strong green canvas ‘designer’ chairs instead of the slatted plastic shockers from K-Mart. Most surprisingly to me was that they even started to go to the cinema – virtually unheard of before. The last time my olds went to see a movie not playing on TV was when they had just paid off the house - Mrs Mableson offered to babysit us and their idea of letting their hair down was to see 'Picnic at Hanging Rock'. In 1974. I worried about what Mum would make of the language, nudity and violence that would assail her delicate sensibilities. Obviously not much because she now goes every week and has been hassling me to see ‘Miss Henderson Presents’ because it has “tasteful full-frontal male nudity…”

And yet….. there’s a part of me that thinks: Oh Bugger. Sadly for Mum, both her parents had died when she was only 38 years old – exactly my age right now. Her share of the inheritance was enough to buy a brand new toyota landcruiser, a 23 foot long caravan and various other bits and pieces. It’s difficult to stop myself mentally calculating what that would cost me now: $85K easy for the ‘cruiser and at least $50K for the ‘van. Whoah, what we could do with $135,000 right now – pay off the mortgage!

Isn’t that absolutely pathetic of me? I’m exactly like the over-anxious losers that the Uni of Canberra’s research so clearly shows are NOT going to get anything like that and shouldn’t be expecting, well, anything of note moneywise.

The nice MillyMoo beams and says: “Go for it Mum and Dad! Travel, enjoy yourselves, entertain, buy heaps of stuff – you’ve earned so you should spend it! You did it hard to raise us, so now you should be spending hard!” The evil MillyMoo curls her cruel, thin lips and snidely mutters: “Yeah great, good onyers. It’s all right for you guys to be able to buy what you liked at our age but don’t worry, we’ll get by, we’ll somehow muddle our way through…..”

I want my marvellous, kind, funny, generous and creative Mum to live to 100. I want my perceptive, intelligent, funny and broad-minded Dad to live to 99. (That’s just so he’s in rigor mortis the same time as Mum). Therefore, I’m realising, only whilst I’m sitting here typing this, that I don’t want $135,000 to come my way this year.

.......Well, I do, but it’ll have to be via a lotto win. Or a scratchie ticket. Maybe a gold nugget, mysteriously buried in our geranium patch, dug up when I do my annual (and much-resented) weeding. A $2M overdraft from penguin books, simply on the strength of my dazzling personality, intellect and typed up chook scratchings...... I think I'm worse than pathetic!

1 comment:

Anonymous said...

There's not much point in having a go at other generations - they make their choices and determine as best they can their morality and ethics.

The Western Baby Boomers generation is probably the most fortunate generation in the history of the world - there were very few wars, health was very good and rapidly improving, economies were growing, jobs were plenty and they benefitted from a thrifty and giving previous generation who believed in (and voted for) a heavy emphasis on socialism as a result of seeing the tough years during the depression (hence free education, good health systems, government ownership of assets, etc). On top of this, when their parents die/died they likely had/have a nice little inheritance derived from the cautious and "save it for a rainy day" attitude of the previous generation. Lucky them!

Is our lot in life easier or tougher? Hard to say. Materially it looks as if we're better off; but I'm not so sure - we have more of the trappings of the modern life - sound systems, tvs, computers etc - but I reckon that's mostly because they're cheaper to buy (in relative terms); but the big ticket item that really determines the relative wealth of the average punter, the mortgage, is still just as difficult to attain. I reckon if you contrasted the size of the mortgage or the cost of the average house against the average household income (even in the age of double income households) it wouldn't be much different to what it was 30 years ago - especially after the recent real estate investment splurges. Time-wise, i.e. having the time to spend with family and leisure pursuits is where we are much worse off - and it will only get worse as globalisation continues and the Chinese and the Indian populations work harder and sacrifice more to try to reach our standards of living (and why shouldn't they!).

But, then again, that might all be rubbish...