Sydneysider Daniel Child has been saving for a security deposit with his wife for the past five years, but he wonders if they should stop working crazy hours and put their money somewhere else.
The couple, who have an 18-month-old daughter and another baby due in September, hoped to buy over the next two years to give their children a home forever.
The 37-year-old works in the legal team of a data analytics firm, while his wife specializes in apprenticeship and recruiting – and both are “frustrated” by soaring prices houses in Sydney.
“My wife and I both feel like we have fairly decent wages and that we’ve been in the workforce, me for 13 or 14 years and my wife about 10 years old, and we’re getting to this point in our life. life where we would have expected to be able to afford a place we want to live, ”he told news.com.au.
“We recognize that a lot of people rent, but since they have children, having a home becomes more important.
“We want to have the space so that they can play in the garden and settle down in a way that is convenient for them and it has become more evident how precious this is over the past 18 months. Certainly, it is a frustration that it is not easy to step up on the scale.
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Stock market investment doubles in two years
Two years ago, Mr. Child invested $ 10,000 in the stock market and his money has already doubled to $ 20,000 through the Goodments by Dough platform.
He said given the current financial climate, it makes a lot more sense with low interest rates and the fact that savings accounts don’t give “good returns.”
“I think my savings account is currently 0.5% per year, so I see interest like last month was $ 15, so that’s an absolutely huge difference,” he said. declared.
This prompted Mr. Child to consider giving up his real estate dream to grow his wealth elsewhere.
“The barriers to buying a property have certainly made us think about other options and other ways of approaching things, rather than traditionally going from renting to buying,” he said. -he declares. “We think of other places we would like to live or other ways to spend more time with the family instead of working all those hours and still not being able to afford a property.
“We’re not absolutely convinced that we need to get a property and that got us thinking about other ways to approach things like investing and where to put our savings as part of that.”
Mr Child likes the emphasis on ethical choices in the Goodments app, but cautioned that investing always comes with risk.
“You need to be aware that things may be out of your control and you may lose a large amount of money or all of your money, which would not happen with a savings account,” he said. . “But if you have a longer view of what your money is doing, the younger generations in particular, if we are talking about cities like Sydney and Melbourne where access to the housing market is difficult and where you traditionally invest in the housing market. brick. and mortars to increase their wealth, they should explore investing – but be well informed of the drawbacks and potential benefits. “
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Young investors are leaving the real estate market
According to the latest ASX study of Australian investors, just like Mr Child, nearly a quarter of all investors started investing in the past two years, but many were aged 25 or under. Women now make up nearly half of all new investors, according to the study.
Dough founder and CEO Andy Taylor said Millennials and Gen Z are gravitating in record numbers to the stock market to help them grow their savings and build wealth.
“Young people realize that buying property is no longer an option, so they turn to stocks to make their money work harder and secure their plan for the future,” he said.
CoreLogic data comparing national housing values and average incomes found that working poor can only afford 17.6% of the available housing stock in Australia – or just 3% in Sydney and 4% in Melbourne.
Teen goes public early
On the Gen Z side, there’s teenage NSW Aaron Marcellino. The 17-year-old is only in grade 12, but under his father’s guidance, Dave is already trying to move up the stock market and aims to use stocks to help him buy a property in his early 20s.
He has invested $ 2000 in the stock market so far.
“I think that’s something everyone should think about and it’s a good time to start around 16 or 17 when you get your first job, so you can invest some money to have some sort of job. ‘future,’ he said.
The savvy teenager invested some of the money in a simple long-term dividend, while the rest was to buy shares in National Australia Bank.
“I’ll probably keep the bank investment, but the other I’m trying to make more money for a property,” he said. “It would be nice to have another investment and it would make even more money moving forward.”
While he thinks everyone his age should start investing, he admits he’s never had a serious conversation with his friends on the subject.
But he is already thinking of preparing for retirement by “playing” the long-term investment game.