Transcription
BMW, Audi, and Mercedes-Benz are no longer cars that the successful buy or the rich buy. They no longer signify that you've made it in your life. Before, if you were buying these cars, you were a doctor or a dentist or you had signed a big business deal or you'd gotten a big promotion. Often you were in your 40s, 50s, sometimes even 60s before you could touch these cars.
And now it's totally different. You have people in your 20s, people sometimes below 20 who are buying these cars. And you know, the brands played a big role to this. I remember when the Mercedes-Benz E and S-Class, those were the Benzes to have. And the C-Classes were kind of looked down upon. A lot of the Benz crowd said, "Those weren't real Benzes. They were too entry level." And then came the A-class and the CLA class. And then a lot of the Benz class said, "Okay, that's that's the entry level Benz. The C-class is okay." BMW have done that and Audi have done that. So the brands have definitely done that to themselves as well, but certainly it's the broke people out there who have changed their spending habits. And they've done it because finance and interest is so easy. And it's so easy for depreciating assets. And they've done it because they can no longer wait to get success. Work hard in life silently and reach a level and then buy these cars. They want to have their cake and eat it too. They want to get it now. They can't delay that gratification. And our culture allows it. Our culture allows that to happen.
You see, the median house prices in Australia's combined capital cities is 1.1 million Australian dollars. That's around 730K USD. And if you think about the USA, the median house price in USA is around $415,000 USD. A lot of people have trouble affording houses, especially if you live in these big cities. It's very difficult to get a house. So, what do people do in the meantime? Well, they say that house goal is too big for me to get. I'll just get into something that could show everyone I've made. So often people will get these cars and they'll say, "Look, I can't afford a house. It's a million dollars or $700,000 or $500,000, whatever it is, but I can afford a Benz on finance or a BMW or Audi on finance. That's what I'll do." And just in Australia in 2025, one in four car purchases this year, new car purchases were financed. And if you consider BMW, Audi, and Benz, that number goes up drastically. So people are definitely getting those cars under lease or finance arrangements. And you might say, well, they might be business owners, etc. And yes, many people get them under business arrangements, but the majority of people out there are just getting them to flex. And if they can't get them new, they'll get them used and still finance them.
And the issue is that building wealth or having true wealth is a pretty humbling and silent experience. You have mortgages, for example, and you might have a house in Australia or a house in the USA, and it might be worth half a million dollars or a million dollars, let's say. No one out there really knows how much mortgage is on your house. In Australia, the average mortgage is around 30 years. And no one can tell the difference between a house that is fully paid off or a house that still has 30 years to go. And that's where the silence portion comes in, where it's a quiet hustle. You might have your next door neighbor who's got their house fully paid off. It's on cash now. You might be in a position where your house won't be paid off all the way into retirement. But that sort of stuff doesn't sell. You can't go on Instagram and post that. You can't take a photo of your house and say, "Here's my house. It's fully paid off." And it's the same with investment properties. You can't go on TikTok and say, "Here's my investment property, and these are how many investment properties I have. This is my lifestyle." I mean, that doesn't sell. It doesn't sell the way a Lambo sells. It doesn't even sell the way a basic BMW sells. So these BMWs, Audi's, Mercedes, when you buy a used M4 for 20 or $30,000, you can sell it. You can sell that lifestyle to people. And that's what that's what people are trying to achieve. That's what brokies are trying to achieve. They're trying to go out there and tell people a story to say, "Hey, I've made it. I'm successful. I'm something." And they're playing themselves because they're using finance in the wrong way. They're using it to get depreciating assets. That's a wealth killer.
And a lot of people say, "Well, you need car loans to get a good credit score and all that jazz." But if you ever go to borrow money from the bank, if you have a big car loan, it reduces your borrowing capacity. You can buy less assets. It's a very dirty loan. A car loan is not a good loan. It doesn't help you in many ways. A car never goes up or very rarely does a car go up. And the issue is that people aren't being taught this in school or in universities. People aren't learning the basics. I mean, our entire society is built on finance. When I finished my engineering degree, all I ever learned was, okay, I've got my degree. I've got a full-time job. I should go out and finance a car. That's all I'd ever been taught and that's what I did. And to this day, that's a lesson I learned. And to this day, after that, I never financed a car. I was an engineer. I was good with maths and I have a master of business now. And I certainly had good knowledge about finances. And it shows you how society has let down a lot of the young people where we're not teaching them how it should really be.
And nowadays, the manufacturers have cranked up the car prices so much that it's eye wateringly expensive where people, they have no choice but to finance. and you've got all these Audi's, Benzes, and BMWs, and it looks as if everyone's driving them, and you want to fit in and finance these cars. But that's not the way, guys. You have to build your wealth first. And that success, that true success is going to come in a silent way. No one's going to notice it. No one's going to give you kudos. And that's how it's always been. That's how it has to be. So, I hope that helps. I'll catch you next time.