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Paying rent is a short term view - you are paying your landlord's rent and won't have an asset at the end.
Assuming house prices rise and rent is more than return that could be had by buying other assets such as equities. The reason so many of us have done well out of property ownership is the combination of leverage and price increases.
All interesting, 200k mortgage, but only 10 years left. No loans, no credit cards, couple of pcps for cars £500.
Nowt in savings, pension shite, just focus on getting mortgage paid as quickly as I can.
1. Bangernomics/functional old car
2. Expensive '15/16 reg van, VAG, camper
They all had several thousand pounds worth of bike strapped to them though.There was a distinct lack of middle ground in both car value and bike value.
It makes me wonder which of these two group (in general) have more unsecured/personal debt?
Someone I encountered recently through work has all the trappings... big house in Cheshire, mahoosive merc with the obligatory private plate, Trophy wife (who doesn't work but does shop) kids in a posh fee paying school. etc, etc.....
A colleague who knows him well said he's panicking at the moment as, as well as servicing his ****ing enormous mortgage, car loans etc etc, he personally (not his wife, just him. God knows what she's got also) has over 75 grand of debt on various credit cards 😯
Now to me, thats the tipping point. Is that your problem? Or the banks?
£560k on Mortgage, nothing anywhere else (probably £35k or so in a couple of savings accounts). Fortunately young enough to have it hopefully all covered in time for retirement 😛
75 grand of debt on various credit cards
0% balance transfer out of the question on that amount I'd guess 😯
Frankly this whole thread is rather vulgar IMO 😐 as my mum would say 😉
And people wonder why house-price bubbles
I'm not convinced you can get bubbles in something people actually need.
Now to me, thats the tipping point. Is that your problem? Or the banks?
It's not the bank's, but as a bleeding heart lefty, I'd say there is a societal responsibility somewhere. Actually no that's b******. He deserves to go under, and it will be the most valuable lesson he ever learns.
I've similar examples of people I know, including the couple who live in Dubai who have 200k credit card debts despite the fact that the husband earns a 300k a year tax-free. And the people who bought a house for 80k in the 90s who now have a 25 year 180k mortgage and are living in the same house with negative equity and complain about being 'trapped'. Not to mention the boy-racer I know who is paying for two cars he's now written off after driving like a dick. This is what happens when stupid people are allowed to do things they don't understand.
Frankly this whole thread is rather vulgar IMO
It's the [i]"Not wanting to talk about money because it is rather vulgar"[/i] thing that gets people into trouble in my opinion.
People being open and honest about earnings and debts can be pretty useful. Why dismiss other peoples life experiences as rude?
It may be vulgar, but it's making me feel better!
Someone I encountered recently through work has all the trappings... big house in Cheshire, mahoosive merc with the obligatory private plate, Trophy wife (who doesn't work but does shop) kids in a posh fee paying school. etc, etc.....A colleague who knows him well said he's panicking at the moment as, as well as servicing his ****ing enormous mortgage, car loans etc etc, he personally (not his wife, just him. God knows what she's got also) has over 75 grand of debt on various credit cards
Now to me, thats the tipping point. Is that your problem? Or the banks?
That sort of thing happened A LOT in the 2000s (I worked in finance for posh types for a long time and got to see peoples income and expenditure) and people got away with it by constantly remortgaging and 'releasing equity' to pay off the credit cards etc and starting the cycle all over again.
Nowadays it's not supposed to be possible either 1) the Banks they owe the money to haven't taken a proper view of their income and expenditure and have lent too much - that would be their problem 2) he's lied about his income / expenditure and it's his problem.
Either way, the end result is the same, as complex and brutal as it can be sometimes the laws on personal finance in the UK are fair, if he cannot control his spending there will come a point when he can't borrow another £ and it will all come to a grinding halt - I've seen it happen, people who seem to be very rich, earn very good money and live in very good houses - suddenly hit a wall - they're skint, their cards are maxed, they've got no cash left and they can't fill the 4x4 or buy food - I've had to tell people in a roundabout way they not only can't they have the 911 they want to finance, they are all but bankrupt and their outgoings are higher than their income and when they run out of credit - they can't buy food - the look of shock on their face when they realise that for all the houses/flat they think they own, but they've spent the equity on the next no-lose-gamble property deal, the 0% transfer deals on their credit cards which made it all free and cheap loans they're not actually rich at all, they're completely and utterly broke.
But as I said at above, the system is fair - if they cannot pay, they don't have to - but they have to admit to a judge that they cannot manage their own finances and they'll take all their assets, sell them and split the proceeds between their creditors - they'll all lose, but if they did their job properly they wouldn't have let things get that far.
When the banks fell, the Government of the day imposed new rules before they allowed the bail outs - in short it was to save us all from ourselves - Banks are required to check whether someone can afford to do, what they want to do - this meant the silly ones couldn't borrow any more than they should and they had a 0% base rate to ease things whilst they got their affairs in order - they've had 8 years to do it now, no doubt when rates finally rise again some people will be cursing their luck and crying off to the Bankruptcy court - but they've only got themselves to blame.
I'm not convinced you can get bubbles in something people actually need.
The hundreds of thousands who were repossessed in the 80s and the millions in the US who were repossessed after 2008 would probably disagree 🙂
Ex wife left me with £26K debt after our business got swallowed up in the divorce... thankfully didn't go bankrupt and worked my ass off to clear it.. 10 years later its a lot simpler £900 on an interest free card but savings can cover it, no mortgage and we paid the car off last year. Being self employed has made me more thoughtful with money and where it comes from.
In a previous job, we would sell electronic kit to customers, when they were refused finance after appearing as a dead cert sale the reasons would make your hair stand on end. The level of debt for some was staggering.
Interesting how your attitude to debt changes over the years. I've recently managed to clear our unsecured debts entirely leaving us with just a mortgage. We gave a great big collective sigh and agreed we'd do our best to never get in (unsecurd) debt again. In my early 20s the then gf and I used to ring up the CC company, increase our spending limit and then go to the offy. We could not care less.
As warren Buffett said when the sea goes out you find out who was swimming naked.
No debt and the Mrs owes me the £80 quid I paid to the lbs for repairs to her bike yesterday
As warren Buffett said when the sea goes out you find out who was swimming naked.
Not being vulgar, I'll not post my debt... But if the sea goes out, I'll not be in my boardies... :P!
Business loan that's 4 years into 25, SE England mortgage, wife and 2 kids, 39 and going grey...
If it all works, I'll be laughing in 20-30 years time!
I was mortgage free at 33. Then last year we moved to larger detached house, so a decent sized mortgage now.
No other debts though. I was quite bad with money in my 20s, racking up several £x000s on loans and CCs. Got my act together and squared them up before I hit 30.
I was mortgage free at 34...although tbf I didnt own a house either.
I was mortgage free at 34...although tbf I didnt own a house either.
🙂
In addition to salary, value of house, etc. please could everyone describe the size of their penis too ?
Because that's what this thread is [i]really[/i] about, isn't it ?
My penis is as big as my debt.
Massive and keeps me awake at night.
^ two post in a row 😆
Age 37, only debt is about £100k mortgage on a £200k house. Paying off over £1k per month which would clear it in 11-12 years. Pension contributions sitting at about £70k, £20k+ in cash savings and about £10k in a s&s ISA.
Last consumer debt was a loan for a car (not the full value, the difference between my savings and the price) 8 years ago. And a bike I bought on 0% finance over 12 months maybe 5 years ago because the money was earning interest while I paid it off.
I've got some savings and a pension....WTF happened to me, man?
Yeah, but how big is your fella? 🙂
Seriously, what a dreadful thread!
Bout the same as my savings
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Actually, just realised something. After being deep in the red overall for most of my life, lately the equity in my house together with my pension pot outstrips my debt by a big margin. So maybe it's not so bad after all! I might be worth something net!
We've decided to kill the mortgage whilst interest rates are low. I'm 39 and have 8 years to go on the mortgage, we only took it out 5 years ago. No credit cards, no store cards etc etc... we would love a new kitchen, a new bike etc, but we've agreed to save for it and if we cant afford it, wait until we can.
I have friends on the other hand who have £300k mortgages, a car on the drip, massive holidays and i know for fact they cannot afford it. No savings, no real pension conributions. A car crash waiting to happen, but there's bloody loads out there like that. It would send me to an early grave personally!
Debt is only truly debt if the value of your assets is less than the money you owe. This is why Farmers always look like they are loaded (well at least while agricultural land is £10k an acre) debt is only relevant to circumstance and assets.
Personal finances in general are complicated. If anyone is genuinely having sleepless nights about their circumstances and debt, then it is[b] they[/b] who should have a voice on this thread, and hopefully would get advice/support on a way out of it.
Not stealth blah-blah-ing about how much you 'have'.
That wouldn't get much traction on here though, would it?
savings, pension, no mortgage, no personal debt. 6 year old bike, and 8 year old car
I've done this wrong haven't I?
I agree this thread may be a vehicle for some to wallet wave but it does serve a bloody useful purpose too.
As P-Jay has said, I have also looked at folks who "had it all" locally. Through work I had to deal with a couple who lived in THE executive development, had the cars, clothes, holdays etc. Turned out it was all funded by nearly £300k of debt, about £100k of which was unsecured. Property market crashed and their goose was cooked.
That was my epiphany and realised it's just smoke, mirrors and debt with a lot of people and don't get sucked into debt yourself trying to keep up. You're not "doing it wrong".
Kids and childcare is a killer. In my early to mid 30's it really felt like I was slogging my guts out just to pay bills but I found it does get easier.
For those that are seriously worried about their debt then speak to someone like [url= http://www.stepchange.org/ ]Stepchange[/url].
They are incredibly helpful and not judgemental. I got into a whole heap of trouble with over £40K of CC debt and £30K of unsecured loans on top of a £190K mortgage.
With the help of Stepchange and a DMP it is all paid back and other than the mortgage which now stands at around £140K on a £250K house I have no outstanding debts.
My Credit Score is probably as bad as it gets but that no longer matters really as we save for everything.
Don't be too proud to ask for help. I wish I'd done it sooner.
loads, but YOLO, no one says on their death bed "i wish id been more frugal"
loads, but YOLO, no one says on their death bed "i wish id been more frugal"
I'm sure some do.
maybe their kids do when they have to get a loan to pay for their funeral
None. Very pessimistic about asset values.
I know what you mean Jammers. I frequently lie awake all night fretting over asset values. It's the cross we all have to bear.
I don't like the idea of any kind of debt. I have a student loan (though I see that more as a tax) and I have been deep into my overdraft in the past. But outside of that I have never owned a credit card, wouldn;t even know how to buy anything on credit, only had one loan and regretted it, and if I want to buy anything I make sure I have the money for it first.
Don't know if that's a good or a bad thing really. I know I could own a lot more stuff. Drive some nice cars, live in a nice house. But at the same time I'm pretty sure I would be more stressed about it all.
Never liked having to pay companies (banks) to service debt so by 29 I was mortgage free, 34 I bought another house but didn't borrow a penny. I have a nice car, a few nice bikes and more importantly a happy life. Was planning to retire at 50 but then had kids (well one child) so will work until their education is over to help and not let her adult life start in debt.
I don't like the idea of any kind of debt.
On the other hand, we love it! 🙄
8 years into a still unresolved debt crisis and this chart is terrifying...
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To be fair we don't know the driver of the increase. I asked a friend of mine who works as a data analyst at the Bank of England and he said it was availability of credit. Looking at the sums being doled out in massive mortgages and especially BTL, and in PCP deals on cars, I suspect that contributes a lot to this chart. Maybe some people are living off credit just to pay bills, I don't know.
I guess there's plenty my mate knows about the state of things but can't tell me, sadly! He doesn't subscribe to the 'economic growth forever' thesis, I know that.
We're going to have to pay it all back one day... or in the case of mortgages, we'll just force the younger generation into a lifetime of crippling debt to keep the whole pyramid going a little longer... I can't quite believe we've got ourselves into such a dire place in such a short space of time.
It's interesting that we've been stuck on emergency low interest rates since 2008 to help keep the debt from overwhelming us but those rates are now playing havoc with banks' ability to make a profit - so we're stuck. Raise rates and a load of bad debts lead to a banking collapse, keep rates as they are and see debt increase still further and banks crash as they're unable to make a profit!
Brooess - on closer inspection I see nothing terrifying on those charts. It shows a drop in people's debt:earnings in recent years, and the alarming spike is just a forecast with a compressed y-axis to make it look sensationalist.
3 years out of date also.