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Reading, Writing And… $%$%$

Reading, Writing And… $%$%$
February 12, 2024 Propertyology Head of Research and REIA Hall of Famer, Simon Pressley

In its current form, the broad national approach towards helping people to realise dreams, financial decision making, homeownership and a comfortable retirement sets people up to fail.

While the intellectual capability of humans is phenomenal, foundational flaws within our national structure and a distinct lack of skill development in basic financial literacy continues to suppress human potential.

Please ponder this…

Across 3-levels of government, the school system has operating costs of $60 billion per year for the primary purpose of teaching young Australians the skills to earn income.

At the other end of spectrum, the consequence of insufficient financial literacy after spending 45-years in the workforce, Australian taxpayers now spend $50 billion per year to fund aged pensions.

There should be absolutely no reason why, with (say) 20-years learning then followed by 45-years earning, we could all be financially independent and comfortably retired by no later than age 65.

But there is absolutely nothing structured within the system for people to develop satisfactory skills regarding using income wisely, including preparing for that time when one hopes to no longer work.

The consequences of the current let-the-adults-figure-it-out system is that only 2 out of 10 Australians achieve financial independence by age 65.

More specifically, there are currently 4.3 million Australians who are already aged 65+ and 77 percent are not financially independent.

As difficult as it might be for some people to accept, this is compelling proof that the system produces financial failures.

But it does not need to be that way.

If the nation invested resources into a system with structured financial literacy and that reduced the enormous age pension expense by just $2 billion per year, an extra world class hospital or major highway gets built (every year).

Imagine that!

The ultimate form of government neglect and recklessness is a system which fails to educate people – before they enter the workforce – about the consequences of failing to use their 45-years wisely.

How many young adults realise that, on its own, superannuation is not a sound retirement strategy and that an aged pension is worth a miserable $28,000 per year, or $42,000 per couple (aka ‘reverse unemployment benefits’)?


I’m advocating for a much better system. A system which:

  • incorporates financial literacy into the national education curriculum,
  • encourages financial goal setting,
  • actively creates early awareness about retirement planning, and
  • progressively reduces the dependence on taxpayer-funded aged pensions.

A good chunk of the current 600,000 teenagers completing year 11 and 12 are already driving a car and working part-time somewhere.

The system quite rightly requires a driver to take lessons, acquire supervision and pass tests prior to being granted an open license.

But the system fails to teach young people the very basics of income tax, managing a budget, and the importance of religiously setting aside (say) 25 percent of their salary for the future.


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Within 1 and 2-years’ time, these stereotypical adolescents will be earning an entry-level salary of circa $60,000. By then they’ll be 18 and 19-years of age and probably have a car loan plus a credit card.

The system fails to educate people to understand that it will actually cost them $40,000 (including $10,000 interest expense) if they obtain a $30,000 loan for an asset which will be worth only 10 percent of the purchase price 6-years later.


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They aren’t taught basic stuff such as good debt versus bad debt, the danger of credit cards and the importance of protecting one’s credit rating.

Welcome to the big, bad world!

A year or 2 after that, they’ll be 20 and 21 years of age with a few years’ experience in the workforce. And will probably be in a serious relationship with a household income of circa $130,000.

The education system incorporates chemistry, physics, creative arts, second languages and countless other topics, but it does not teach essential skills such as decision making, managing a household budget, minimising discretionary expenses and saving a deposit for a home.

So, a lot of people spend every cent that they earn. The more they earn the more they spend on the nicer car, the nicer holiday, the extra night out and renting the nicer home.


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Everyone has a reasonable level of general intelligence and a sound work ethic. But very few have acceptable financial intelligence.

The system does not educate people on basic homeownership resources such as 5 and 10 percent deposits, the pros and cons of mortgage insurance, fixed versus variable interest rates and the wonderful value of offset accounts.

By the time people have had 10-years in the workforce full-time, a significant critical mass of households still has very little savings.

No one should be proud of a system which produces that.

As recently as 2021, 1.4 million Australian households were people aged 35-54 who are yet to acquire homeownership.


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These people have been in the workforce for between 17 and 36 years and are yet to save a deposit and get that first foot on the property ladder.

Just imagine how much better that would be if, prior to entering the workforce, the system taught young adolescents basic financial discipline.

A 17-year old who began by saving just $50 per week for 2-years, then $200 per week for the following 6-years will have a $90,000 deposit for a property by age 25 (assuming 4 percent interest).

If the system helped people to understand ‘financial purpose and consequence’, we’d suddenly have millions of Australians in their mid-20’s with an adequate deposit saved for a property.

Many adults hang on to an ill-informed opinion passed down from the age of the dinosaurs that ‘rent money is dead money’.

A good system would educate young adults on the benefits and shortcomings of RentVesting, along with the wide variation in home prices across this large country.


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A person with basic financial literacy understands reasonably simple things like the power of compounding, the Rule of 72, the asset base required to fund a particular retirement lifestyle, the power of leverage, % value growth rates versus $ value growth and superannuation limitations.

In my professional experience – talking with people each day from all walks of life – I know for a fact that many accountants, financial planners, bank staff and economists would fail a financial literacy test.

They came out of the same system.

Surely 27 million Australians can at least agree that we are capable of much better than this.

A country worthy of the Lucky Country tag presides over a system that sets people up for success, not failure.


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