Barefoot Investor: Why the great Australian dream is now a financial trap

A run to save $30 on a camping dunny has exposed a ‘dumb and dangerous’ move that will drive house prices even higher, writes Barefoot Investor.

In the holidays, I spent $60 in fuel and tolls driving my thirsty ute across Melbourne …

… to save $30 on a camping dunny.

True story.

That’s right, I literally burned more fuel than I saved … to buy a glorified bucket with a lid. (It’s for a camping trip – hey, we’ve four kids that aren’t strong enough to use a shovel.)

Yet I also scored four uninterrupted hours in the car with my 11-year-old son – a day of good chats and dodgy servo snacks.

Priceless!

As we drove out the farm gate, we passed what used to be golden paddocks where sheep would graze and old blokes would give you a dusty nod from the top of their tractors.

Now?

Sardine tins. Sold at caviar prices.

The northern fringe of Melbourne — where we live — is growing faster than my inbox after a long weekend. But the roads? Still the same goat tracks, just with more SUVs and road rage.

As we hit peak-hour gridlock, my son let out a theatrical sigh.

“Perfect,” I said. “More time to read election billboards.”

The great Australian dream of owning a home is increasingly becoming out of reach, and Barefoot Investor says the policies of the two major political parties will drive prices even higher.

We passed Clive Palmer glaring down at us blowing his own trumpet.

“Is that our version of Donald Trump?” my son asked.

“Sort of. If Trump was raised on talkback radio and meat pies.”

As we snaked our way down the highway we passed billboards of ‘dead-eyes’ Dutton, and ‘tiptoe’ Albo. Seriously, these two have all the charisma of suburban accountants debating depreciation schedules.

“All the billboards mention the cost of living”, remarked my son.

Spot on, mate.

And the biggest cost? The roof over our heads — rent or mortgage. That’s where the squeeze is.

Australian homes are now some of the least affordable on Earth. And to afford them we’ve racked up world-class debt. Back in the mid-2000s, the average house cost four times the average income. Now it’s more than eight.

Australian Prime Minister Anthony Albanese wants to slash deposits to 5 per cent. Picture: Jason Edwards / NewsWire

It’s clear that we’ve priced ordinary Australians out of their own neighbourhoods.

So what are the bold economic plans we’ll be voting for in the election?

Well, Labor wants to slash deposits to 5 per cent. Which is as dumb as it is dangerous. Remember, the US subprime crisis was created by politicians making it easier for broke people to buy homes.

Not to be outdone, Dutton, the so-called economic conservative, is promising to allow first home buyers to raid their super and write off their mortgage interest.

It’s madness.

Opposition Leader Peter Dutton wants to allow first home buyers to raid their super. Picture: Richard Dobson / Newswire

Both policies are like turning up at an auction and handing everyone a suitcase full of cash. It doesn’t make homes cheaper. It just lets buyers bid higher — and history shows they always do.

And the result?

It drives house prices higher. It drives rents higher.

It seems like both sides have designed their housing policies to fit on a highway billboard:

Big font. Feel-good slogan. Eye-roll logic. Paid for with borrowed money.

And in doing so they’ve turned the great Australian dream into a financial trap. (Welcome, postcode povvos!)

After a long day of driving we got the portaloo and made it back home. Yet I couldn’t shake the feeling that our national housing plan was cooked up in the same aisle as the dunny bucket: cheap, flimsy, and bound to leak.

Tread Your Own Path!

Is AI a Giant Con?

Hey Scott,

I read an article by a leading researcher named Ed Zitron who debunks the hype around AI. He points out that, while companies like OpenAI claim their technology is revolutionary, they’re burning billions in losses. Even the mammoth Microsoft has poured in $13 billion and is still not seeing real profitability. Despite all the buzz, AI still struggles with accuracy, and most businesses aren’t making money from it. Zitron argues that AI’s biggest success so far is convincing investors it’s the future — while users are realising it’s often unreliable and expensive. So, is AI really the game-changing gold rush we’ve been told it is, or is it just another overhyped tech bubble waiting to burst? Should we be more sceptical about its long-term potential?

Daniel

Amen, brother!

AI is so overhyped it’s making the crypto bros blush.

Still, that’s just how the tech world works — every few years, it falls madly in love with the Next Big Thing, only to ghost it when a shinier obsession comes along.

Remember when 5G was going to change everything? Medicine, smart cities, your morning coffee — nothing was safe from the revolution. At Apple’s 2020 iPhone 12 launch, they dropped the word ‘5G’ sixty times in one presentation!

And now?

No one gives a G.

The people making serious money in AI right now are companies like Nvidia (selling computer chips), cloud computing giants, and consultants convincing companies they ‘need’ AI even if it doesn’t do much for them.

Now, don’t get me wrong — AI is a fundamental technological shift.

Yet here’s the reality:

ChatGPT has been around for less than two years. That’s toddler-aged technology. Impressive at times, sure, but it’s still eating glue and struggling with basic tasks.

The real breakthroughs?

They’re probably 20 years away — when AI grows up, stops making stuff up and actually gets context, and businesses figure out how to turn it into real profit.

Yet that won’t stop Wall Street from pumping the bubble today.

Exhibit A: At the recent iPhone 16 launch, Apple couldn’t stop saying ‘Apple Intelligence’ — about as often as they dropped ‘5G’ four years ago. Just don’t ask Siri to set two timers at once. She’ll short-circuit like a 2001 Dell running 37 Chrome tabs.

Romantic Comedy Gone Wrong

Dear Scott,

A financial advisory group keeps hounding me with promises of paying off my mortgage faster, using my tax, and retiring early. I’ve hung up on them multiple times, but I finally caved and booked a meeting. Is there any merit in what they’re selling, or is this just another costly sales pitch in disguise?

Sally

Sally,

Pull your bloody head in.

This ain’t a romantic comedy: ‘girl plays hard to get at the start, but eventually gives in, and they live happily ever after’. No, this is more like a horror movie. The guy on the other end of the line is a salesman, and he absolutely has a plan to pay off the mortgage quicker … but it’s his mortgage, not yours. That’s because he’s selling a complex, fee-heavy investment scheme that will make him a lot of money.

Do you want the fastest, safest way to pay off your mortgage?

Make extra repayments.

I know, not sexy. No one’s cold-calling to sell you that advice (except maybe a guy with no shoes). But you know what else isn’t sexy? Getting fleeced by a ‘wealth-building strategy’ that drains your actual wealth.

So please cancel the meeting. You don’t need a sales pitch — you need a plan. So go to the library and get a copy of my book, and the next time he calls, ask him to send you a photo of his bare feet.

I’m Teaching My Kids to Gamble

Hi Scott,

Have you ever been to one of those arcades for kids where you tap your card, play giant-sized games and then get points in exchange for a very ordinary plastic prize at the end? They are outrageously popular. But, with the loud music, flashing lights and constant ‘ka-ching’ noise, I feel like they are just glamorised pokie machines for kids. I’m not going to lie, though, we’ve been and it’s fun!

Jessica

Hi Jessica,

I have four children so, yes, I have been to Crimezone many times.

Years ago their arcades were a drawcard, but in this era of Fortnite and World of Warcraft they’re the gaming equivalent of a flip phone.

Now you’re spot on — it’s basically a casino for kids now.

But, instead of stumbling out broke with a hangover, parents walk out broke with a plastic whistle and a kid bouncing off the walls on a sugar high. That’s because the games look and sound — and have terrible odds — just like the pokie machines.

And in that way they are not only teaching kids how to gamble — just like a casino, they’re coating it in a veneer of fun. But losing money isn’t fun. And that’s why the last time we went we bypassed slap trap alley and instead played ten-pin bowling, with the guard rails up!

(Timezone executives: please send your correspondence to [e-mail])

DISCLAIMER: Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.

Originally published as Barefoot Investor: Why the great Australian dream is now a financial trap