Are landlords the bad guys?

In my first post in this series on the economic fallout of covid-19, I asked whether banks are the heroes of our current economy. The answer was a resounding no. But now, as thousands across Australia are losing income, either from reduced hours, a decrease in business, or even a complete loss of employment, many are now struggling to afford the basics. Including rent. As a result, many have turned their attention to landlords.

The Prime Minister has announced a six-month moratorium on commercial and residential evictions, with renters encouraged to contact their landlords or real estate agents if they’re facing financial hardship as a result of the coronavirus shutdown.

But (surprise!) it seems that simply expecting tenants and landlords to work it out themselves isn’t working.

Stuck in the middle with you

In recent days, I’ve seen numerous renters on Reddit posting about their landlords’ refusal to play ball. Some are reportedly demanding rents be paid in full even when tenants have suffered significant financial losses.

On the other hand, in spite of the eviction moratorium designed to protect tenants (which may differ in its application from state to state), and the drastic increases in financial help now available in the form of the recently doubled JobSeeker payments, and the newly introduced JobKeeper income support, thousands of renters have pledged to undertake a ‘rent strike’.

Caught in the middle of it all are real estate agents, who, the Sydney Morning Herald reports are being “abused by people who are in desperate situations”.

The situation is indeed desperate. But are landlords really the bad guys here?

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What happens next?

It’s Easter, 2020 as I write this, and most of us are home. Close to two million people have been infected with Covid-19, and more than 100,000 have tragically passed away. It’s hard to see when things will go back to ‘normal’. It looks like Australia’s borders will be closed until at least the end of the year. Every media source I look at talks about how hard these things are to predict.

Yet many of us are asking ‘What happens next?’

While none of us can say how long this pandemic will last, or what the world will look like when it is over, we can take a look at what happens, on an individual level, if homeowners take up the banks’ offer we explored in the previous post.

There, we looked at three different scenarios: 1) paying principal and interest (P&I) like usual, 2) paying interest only and 3) the so-called ‘pause’. And we saw how ‘pausing’ your home loan can actually end up a lot more like pressing ‘rewind’.

But how substantial of a ‘rewind’ is $6,246, like we saw in the previous post? It doesn’t sound like a huge amount, in the scheme of things – not when we’re talking about sums of close to half a million dollars (based on a mortgage of $400,000). But the long-term impact can be enormous.

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Should I take a holiday from my loan payments?

Or: Are the banks really heroes?

Treasurer, Josh Frydenberg, has recently praised the ‘big four’ banks for ‘stepping up to the plate and playing their part in Team Australia’.

It’s a confusing turn of phrase. A baseball metaphor for a country more usually identified with football or cricket (or our Prime Minister’s beloved rugby). Mixed with a reference to the metaphorical ‘team’ our former Prime Minister, ‘Captain Abbot’, was so fond of.

But what moved Frydenberg to wax lyrical about the banks in the first place?

Their offer to defer loan repayments for six months for small business impacted by coronavirus. It’s an offer that has also been extended to home owners. However, as the ABC has pointed out, the ‘pause’ being offered is not exactly a holiday.

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How can I make my own face mask? (And why should I?)

Please note: I am not a medical doctor. You should refer to the medical studies presented below for expert medical advice.
[If you’re here for the mask pattern and instructions, skip to “How can source a cheap mask without reducing the supply for medical professionals?” – but don’t forget to read up on how to fit and discard/sterilize your mask properly.]

Why wear a mask?

1. Most importantly, to help others. Coronavirus is spread by droplets, for example, in your coughs or sneezes. Masks provide a physical barrier to help prevent others from becoming infected. They can help trap large particles, like bodily fluids (saliva etc.) which may contain viruses.

2. To a lesser extent, to help yourself. David Hui is a respiratory medicine expert at the Chinese University of Hong Kong who studied SARS extensively. He says “If you are standing in front of someone who is sick, the mask will give some protection”. “The mask provides a barrier from respiratory droplets, which is predominantly how the virus spreads.”

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How can I prepare with just $30?

In recent days, like probably everyone on the planet, I’ve been following the news relating to the novel coronavirus, Covid-19, closely. Government officials and news sources have suggested households prepare for the possibility of quarantine. (Too) many people have gotten the message when it comes to toilet paper. Yet, judging by the comments on Reddit, and people interviewed by the ABC, many Australians are worried they cannot afford to simply buy an extra two weeks’ groceries, and there has been little guidance from official sources.

The average Australian household spends over $250 per week at the supermarket, and families spend closer to $350. So, if preparing for 14 days at home means finding an extra $500-700, it’s no wonder people are concerned. Especially given reports that one in seven Australians are living week-to-week, and have no savings for an emergency of this sort, and one in three are just two pay packets away from serious financial distress.

The good news is, you don’t need to have hundreds of dollars lying around to make some sensible preparations. Nor do you need to panic buy and empty the supermarkets, leaving nothing for everyone else.

After compiling suggested items on Reddit preppers’ lists, and paging through a huge stack of budget cookbooks, I’ve prepared a ‘starter’ list of items you can get right now, for less than $30 AUD. (Prices correct as at 10/3/20)

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Did a child make your child’s clothes?

Last time on Enrichmentality, we examined the equation ethical = expensive, and found that, in most cases, we can’t trust this assumption. Sometimes, clothing is cheap and nasty. But it can be expensive and nasty, too. In fact, some of the most expensive brands had the very worst environmental and social records according to the Ethical Fashion Report. But I came across something important when I was analysing the data included in the report. And that was the fact that most of the brands surveyed that sold exclusively or primarily children’s clothing scored abysmally.

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Does ethical fashion = expensive?

Cheap fashion, we are told, is to blame for the appalling standards of workers in factories, and for environmental devastation. This is a story we are told over and over again – with the implication that we should be paying more for our clothes, and perhaps if we were all prepared to pay just a bit more, this problem would simply go away.

I decided to put this theory to the test: Are cheaper clothes necessarily less ethical? And are more ethical clothes necessarily more expensive?

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Why does garbage get published?

Corporations may not have a legal obligation to maximise shareholder profits. But the belief that they must do everything (within the law) to make money is certainly widespread. Of the ‘Big Five’ publishers, four are public companies. Regardless of their legal obligations, they must keep their shareholders happy. And shareholders are usually made happy through a) increased share price, b) fat dividends or c) a combination of the above.

Smart investors, of course, are those who are in it for the long-term. Who want any increase in share price to be one which reflects an increase in the value of the underlying company. Who want any increase in dividends to reflect an increase in the company’s profits.

‘Surely, increased share prices are good?’ I hear you say. Or, ‘Who wouldn’t want to receive a nice big dividend?’

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