And "she" had 16 mates.
I was back in Ouyen, the tiny Mallee town 450 kilometres northwest of Melbourne where I was born.
Things sure had changed since I'd last dropped in for a frothy.
Actually I'd been asked to be a guest judge of "Miss" Ouyen 2011 - a fundraiser for the local hospital, and part of the annual Farmers Festival, which culminates in the community coming together for the Ouyen Show.
Practically the entire town turned out for the show, and what struck me was the genuine respect within the community for older people.
All day, white-haired nannas worked the crowd dispensing kisses, hugs, smiles and supportive words to people whose families they'd known for generations.
I left Ouyen years ago for the bright lights of the big city. During the day, I got chatting to a woman who'd done the opposite, moving from Brisbane with her family.
Over a vanilla slice she told me that a couple of months after she and her kids arrived, her father came to visit and took his grandkids to the shops - only to be stopped numerous times by protective locals checking the children weren't in "stranger danger" from a man they'd never seen before.
Some people spend their whole lives trying to find this sort of community.
So what can us city slickers learn from Ouyen? Simply that big homes, big jobs and big debts create lots of work and plenty of stress, but don't add much to our happiness.
And I'm not just being overly sentimental after too many beers at the Ouyen pub.
Deakin University's landmark Wellbeing Index research has found that our happiness is more leveraged to our relationships and community bonds than our bank balances.
Ouyen isn't a high-income area - not many farming towns are.
Yet its real wealth comes from the community, a shared sense of caring and belonging that many of us chase, but rarely find.
Home loan deals
EARLIER in the week I wrote about the rate cut and explained why I was keeping my home loan variable despite the fact that the banks are offering lower fixed rates.
One reason is that having the security of locking in your rate comes at a cost: (usually) fixed repayments, and a hefty break fee if you want to walk.
Banks behave in their best interests. (Case in point: this week the NAB "broke up" with the Reserve Bank when it gently gave them the finger on rates.)
A smarter strategy may be to wait and watch what happens with the unfolding debt crisis.
We could see official interest rates come down, and cautious consumers continue to slow their borrowing (building approvals dropped 13.9 per cent in September), causing banks to scramble for our business next year.
That's when I'll be looking to lock in my rate.
Until then I'm enjoying being able to make extra repayments: the quarter percentage point cut this week translates into an (average) $50-a-month cut, or $41,000 saved in interest over the life of a loan.
This highlights not only the compounding benefits of making extra repayments, but also the benefits of regularly tarting yourself around to the banks to get yourself a better deal.
Predicting the unpredictable
CONVENTIONAL economic wisdom says that when interest rates are lowered, people are encouraged to borrow and spend more. Then again, conventional economic wisdom hasn't been working that well of late.
Around the world, governments have dropped interest rates to (basically) zero and printed money in an attempt to fire up their economies.
At best it's been a failure, at worst it's pushed places like America closer to defaulting on their debts.
What gives?
Consumer spending drives around 60 per cent of our economy. So if consumers and businesses become worried about the economy, they spend and invest less - regardless of what economic models suggest they should do - and it becomes a self-fulfilling prophecy.
Yale professor Robert Schiller is one of the world's leading lights on the study of so-called "behavioural finance".
And he's used it to accurately predict both the top of the dot-com boom and the peak of the housing market in the US.
Prof Schiller's research explains why bad news in the media (like out-of-control government debt) becomes a discussion point at the pub and how it has real long-term effects that can't be measured by conventional economic models.
And all around the world, debt is a four-letter word.
While politicians in Australia continually assure us we're much better off than anywhere else, let's be honest: we don't exactly have a lot of faith in any of them.
Our collective conversation increasingly seems to be that we've got some of the highest levels of household debt in the world, severe housing unaffordability, and rising costs of living.
In the US, housing prices have fallen for five years straight, despite the fact that you can get a 30-year fixed housing loan for less than 4 per cent.
In short, when people see property prices falling they hold off buying, regardless of how cheap the debt is (the buying is left to overseas "bargain hunters").
As I said last week, the period of de-leveraging from our debts will be painful for people who haven't seen that the cycle has changed.
Or as the famous investment contrarian Warren Buffett says: "You can't buy stocks when everyone else is and expect to get rich."
Tread your own path!
Contact Scott Pape at barefootinvestor.com or barefootinvestor@heraldsun.com.au
Source www.heraldsun.com.au/
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