Our local area in Sydney’s upper North Shore has a very large elderly demographic. I’m talking a disproportionate number of people over eighty. I’ve been known to refer to the suburb as Club-Med for the dead. Almost on a daily basis I encounter strange behaviour from this demographic.
For instance, I’d be driving along doing the speed limit and an elderly man would just step off the kerb onto oncoming traffic. On more than one occasion my car’s automatic emergency braking system has been activated and a good thing too.
Far from being alarmed, the elderly person continues to make their way, very slowly mind you, across the six-lanes of Mona Vale Road determined to get to the other side regardless of the chaos occurring to their left and right.
On other occasions, in the local shopping centre, they will double park, park in the parents’ spots (not that I blame them) or just park in the most inappropriate of places – usually as close to an entrance as possible. I have seen them triple park for 15 minutes and cause a bottleneck which took a further 20 minutes to untangle.
When I asked my 90-year old neighbours about this strange behaviour they laughed out loud and said “when you get to our age there are two facts that overwhelm us. Impatience and our impending death.” Both, apparently, are intertwined. They continued …”you stop caring about dying and you become so impatient with achieving your daily routine you pursue them with extraordinary impatience and concentration.” And …”that level of concentration is just exhausting and we just can’t be bothered observing the niceties or the mundane anymore. Now, pour me another glass of that shiraz young man.”
This got me thinking about human behaviour in general (not the shiraz…what she said). We get to a point where we just don’t care anymore about certain things in life because we become impatient and think we’re running out of time to achieve unachievable milestones that we may have set for ourselves.
Over the last three years we’ve observed this mentality creeping into much younger people’s attitudes toward their finances. They just stop caring about debt and the repayment of it.
In certain circumstances there comes a breaking point for them where they just let go and miss repayments, go nuts on their credit cards, lease a car or two, go on a very expensive holiday, prepay their kids’ school fees and before they know it, the bank’s foreclosing on their house.
Of course, by the time we see them they’re at the final stages of the process and are seeking to refinance away from said bank to a private funder and are willing to take on double digit interest rates to do so.
Of course, we wouldn’t do that to either them or our long-standing funders.
Instead, we sit down with our clients and their bank statements and try to figure out what’s going on.
The extraordinary part of this story is that most people in this position either don’t understand the gravity of their circumstances or they’re in denial.
It’s not until you list all of their expenses and compare them to their income(s) that the reality of their precarious financial position dawns on them. I mentioned the holidays, cars, mortgage, credit cards and school fees…but sometimes these pale into insignificance with some daily expenses.
When you pay for everything from nannies, dining out for every meal and accompanying taxis to and from, gardeners, your gutters cleaned, your house washed (outside), having your shoes shined, your ironing done, your house cleaned (inside), your children’s private tutoring, your cars washed on a weekly basis and detailed every few months, your home security monitored, your Foxtel subscriptions, your numerous iPhone X plans, weekly psychiatric sessions for everyone (whether or not they have mental health issues), gym memberships, catering for dinner parties…something’s got to give.
Some people see the error of their ways and are willing to make adjustments to their lives. Others say the shock to their lifestyles would be too much. We suggest a visit to a financial planner (because they’re already in therapy), as we’re just not allowed to give specific advice. Some take us up on the offer others are suspicious and want to know what kick-backs we’re getting – such is the mis-trust generated since the royal commission was first thought of.
Sometimes, we see these clients again after a period of time. Completely rehabilitated. However, mostly, they disappear. We assume at some stage they have declared bankruptcy and started again.
Most of the people who have overstretched their debt position have passed the point of no return. They’ve stopped caring about the consequences of their actions. They believe a financial death (bankruptcy) will put them out of their misery. Kinda like the old bloke walking slowly across a six lane road. He’s so focused on getting to his destination he no longer cares about the consequences.