Cars now cheaper
I'm aware I spend way too much time blogging about property (since that's my business) and what companies and share prices are up to (since that's what I'm interested in), but what about personal finance?
Well, today, some good news!
New cars are at their most affordable level in 38 years according to Commsec's Car Affordability Index.
The reasons for this include competition between car manufacturers and strongly rising wages in Australia.
Of course, buying a new car still doesn't necessarily make for a smart move, since a new vehicle is still likely to depreciate in value sharply and entail holding costs. Buying a new car is essentially a guaranteed way to lose money, albeit an enjoyable one.
In fact, as a city dweller, I've decided that I don't even need to own a car at all in Sydney these days (I still have one in England).
When you throw in the annual costs of insurance, registration and rising fuel costs, for me at least, I reckon it's easier just to use GoGet or a similar company when I need to drive somewhere.
I don't even like driving in Sydney any more anyway, it's mainly a miserable or stressful experience which is why I live within a short walking distance of the CBD!
Cost of living pressures?
There's an interesting question to be asked in Australia about the cost of living. On the face of it, wages have grown very strongly, and of late inflation has remained relatively benign.
Therefore, on the one hand, as Adam Creighton recently highlighted in Charter magazine, over three decades incomes have outstripped price growth across all income groups in Australia.
Since 2003, he notes, the poorest fifth of houses holds are $42 better off and the richest fifth $576.
Fisher's 'Money Illusion' dictates that we instinctively focus on nominal price increases rather than real price movements after accounting for inflation.
On the other hand, however, cost of living indices which cover rent, food, restaurants, transport, electricity and other utilities have tended to show that Australia has some of the world's most expensive cities in which to live.
Some goods are cheaper
It's never quite as simple as comparing wages growth to CPI or inflation indices, since spending patterns shift over time.
As noted above, new cars are at their most affordable level in 38 years, and many electronic goods have become significantly cheaper over the years.
I can remember in the 1990s as a student clubbing together with my three housemates to pay $1000 for a very ordinary television (with VCR), that would probably cost a third of that amount today, even a decade and a half later.
Electronics companies understand this, of course, and the successful businesses now focus on trying to sign customers up for products which generate them monthly cashflow and are likely to require replacing regularly, such as for i-Phones or i-Pads.
But what we save in one area, we tend to spend in another.
Take overseas travel.
In the words of the Australian Bureau of Statistics, the number of Australian residents travelling overseas for trips "has grown at an unprecedented rate over recent years".
In the 2010 financial year, 6.8 million overseas trips were made by Australians, up from 2.1 million two decades earlier.
In per capita terms, this was the equivalent to 31 trips overseas for every 100 Australian residents in 2009-10, up from 12 trips per 100 residents in 1989-90.
With the stronger Australian dollar, the numbers may increase yet further.
As I noted last week, much of the recent boom in retail trade has been a tremendous increase in the cafes, restaurants and takeaways sector.
The cost of bringing up a child has soared.
The average wedding now costs a preposterous $36,700, or up to $48,296 depending on your source, a hefty bill indeed and hardly the ideal way to start out married life.
So it's great news that Australian wages have soared, and great that new cars are as cheap as they have been in four decades.
I still wouldn't buy a new car though and I most certainly wouldn't pay fifty grand for a wedding day!
The key to financial success must always be controlling the expenditure items and investing in assets.