Changing gear, making changes its time08.05.2022
It’s been a fantastic week where I have almost finished a book called “Still Life” by Sarah Winman.
In this book, our “English” characters live most of their life in Florence between the 1950s and 1970s. This is a book for a soul in need of joy.
I have found myself looking up many of the Florentine dishes discussed in the book and can’t believe how simple they are and how economical they will be to make, be it a bit of skill must be applied to completing these dishes.
They are eaten at home, in a couple of cafes or served to guests in a pension the characters run. Add the skill to this food, and you are eating heavenly food for not much outlay. I plan to cook many of these dishes, and thus, I have begun one of my journeys to deal with rising interest rates that will affect the property I am involved in.
In 1990 some 32 years ago, the reserve bank cash rate was a whopping 17plus %. The average price of a house was $79k, and the medium rental was $447.00. I remember paying an eye-watering 18% on a mortgage in the early 1990s before personal disaster struck.
Since then, rates have been dropping to nearly “nothing”, house prices have gone stupid, and the world we live in has changed no end.
And now we may be at a point where everything changes again.
Although house prices rose 27.5% through the year 2021 (In the December quarter of 2021, residential property prices rose 4.7%. The most robust quarterly price growth was recorded in Brisbane (+9.6%), followed by Adelaide (+6.8%), Hobart (+6.5%), and Canberra (+6.4%). We are guessing that this may all change.
Car prices have also gone nuts since the pandemic.
The price of new cars has gone up as much as 25% since before the pandemic, according to an ABC article that quotes the website pricemycar.com.au.
A detailed analysis of 1100 models by goauto.com.au meanwhile calculates that as of March 2022, the average price of a new car has been up 7.6% since pre-pandemic times.
Some models such as the Toyota Yaris have gone up by as much as 37% ($7290 extra). There is no escaping crazy prices – Land Rover: 9.01%, Audi: 8.59%, BMW: 8.42%, Jaguar: 5.33%, Lexus: 3.36%, Volkswagen: 9.83%, Hyundai: 9.06%, Jeep: 8.91%, Nissan: 8.59%, Toyota: 7.70%, Fiat: 7.21%, Mitsubishi: 6.80%, Renault: 6.60%, Subaru: 6.00%, Citroen: 5.93%, Mazda: 5.30%, Ford: 2.73%.
You get the picture; the current inflation rate is most way above what we are being told.
Waiting times for new cars (due to supply constraints) have caused used car prices to rise as much as 50%. That old commodore is now valued at an eye-watering price. Car valuation expert Redbook.com.au estimates a 25 to 35% increase in recent years.
Let’s not even talk about food and energy prices over the coming year.
But if you are long in the tooth like me, you will remember that this happens. Recessions are a fact of life.
They occur because things go stupid, the process goes too high or too low, and money becomes too available, but it happens. And then other influences affect us or create radical change. Some of us can remember the Asian meld down about 1998. Now we have the war (another one) in Ukraine, which will affect the energy prices because it’s close to Europe and will have a massive effect on energy prices. (Good thoughts – it may speed up the world’s move to the energy that is renewable – it’s a push comes to shove, and Europeans need or want to move away from Russian point,
But that is not what this blog is about.
Our character in Still Life trades the 1950 English can of spam and awful post-war food for something greater. They adapted and learnt to love the tripe sandwiches. The tripe seller sold the tortellini in beef broth and the mouth-watering list (OK, I love tripe and offal).
My message is that with lifestyle changes, thinking about what you enjoy and, more importantly, need (with a few wants thrown in), these changes in the economy can be worked through. But you need to put your head up and think and plan.
Stay in tune with what your products and services can earn and charge appropriately in your business. Don’t give fixed prices on anything you have no control over, such as building materials—this means, of course, you need to learn to write a different quote.
Watch every price, and quote you receive, and count the pieces of string in your business (they may work a lot now). Stay tuned to your market and know where trust and emotion come into play.
We suggest buying a few cookbooks to save a fortune in your personal life.
Uber eats became a thing in 2015. It seems that it’s been part of many lives. There are other ways to have a food delivery, and of course, you could just prepare your own meals (cook a bit extra for your lunch box), which will save a fortune.
The average family will cover the first round of interest rate rises we have just had by cancelling just one takeaway per month, but we know the rates will rise and rise, so make the changes now.
The market size of the Online Shopping industry in Australia has grown 19.6% per year on average between 2017 and 2022. Maybe it’s time to stop buying landfills – there are habits and changes that you can be made to save you a fortune. (OK, So I’m being preachy, don’t care. It’s my blog).
So, here’s the thing, we probably will have a recession, and if we are told that we aren’t in recession, someone is lying. But to beat it, you and your business can make changes to ride it out, still find opportunity, and thrive.
For many of us who are long in the tooth, we go again; it’s been a while, but we have seen it; for many, it’s a “what the….”
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