Discussion
Ari said:
Do you ever worry about what would happen if you lost your job?
My thoughts as well but you can insure against that stuff I guess if you're in employment.I started work in the 90's and lived through more redundancy rounds in 2 years than most see in a life time. 1st round it's the dead wood, 2nd round the "can live withouts", 3rd round was good guys but ones in jobs where others could take up the slack by working more hours, rounds 4-6 were pot luck.
I was lucky (and cheap) and lived through them all. Been made redundant twice in the good times though from being wrong place/wrong time (was top performer in peer group on both occasions) and not willing to take the alternative employment offered so I know it can happen to anyone.
If your lifestyle is geared around your full earnings then you're running a risk.
Different people have different attitudes I guess. Personally, I have a mortgage I want to if not get rid of, at least reduce considerably whilst personal circumstances permit. Only other debt is £1300 sat on a zero balance card. That can be cleared whenever I want, but why not park it for a year and at least feel like I'm winning? My view on being debt free is increasingly one of the flexibility it offers. Given the economic situation at the moment, in my mind, having lower levels of debt means I have more options open should my circumstances take a dive or indeed should I decide I want a change of direction. I just don't want to be going to work for the next 20 years to pay off a mortgage when I could be doing other stuff. I have no idea what that other stuff might be, but clearing the debt at least means I'm able to pursue it as and when it presents itself.
In recent years living costs have outpaced salaries, theres even further downward pressure on wages now and I'm not surprised by this figure of £10,000. Frankly I thought it'd be more.
Being in debt isnt a problem so long as you can pay it off, but when millions start losing their jobs it all unravels.
Being in debt isnt a problem so long as you can pay it off, but when millions start losing their jobs it all unravels.
TTmonkey said:
BoRED S2upid said:
So I read today that on average us brits are carrying £10k of personal debt not including mortgages. Some people must have tens of thousands for it to average out at £10k each or these figures are complete b
ks.
Do you own everything you have without any associated debt? ks. No car loans?
No credit cards?
No sttore cards?
No personal loans?
It all adds up rather fast. If you owe nothing, lucky you. I'd say you were the exception to the rule. Even on PH.
My bucket, , , , ,
No mortgage
No car loans
No credit cards
No store cards
No personal loans
AND NO FREAKING JOB !!!
vette
TTmonkey said:
Puggit said:
Smug git here.
No debts apart from mortgages on our 2 houses (one in UK, one in France). If it all goes horribly wrong we can sell one house and live mortgage free in the other. :cheers:
You seem pretty sure of yourself....No debts apart from mortgages on our 2 houses (one in UK, one in France). If it all goes horribly wrong we can sell one house and live mortgage free in the other. :cheers:
unfortuantly, bad stuff sometimes happens in an uncontrolled fashion, and usually all at once.
For example - in the next couple of months, we could see the colapse of the Euro. This could lead to widespread finacial disruption in the banks. You might find your house in france is now unsellable, as the banks wont lend and then the values plunge. So your stuck with a mortgage on an unsellable house.
then you lose your job due to the finacial termoil.... and the UK economy follows the Euro. Then your stuck with two houses you cant sell because no one can raise a mortgage.
Whats the back out plan for this situation? How do you liquidate your depreciating assets when no one can borrow money?
Cant happen? I think we're closer to this situation than we've ever been, even in the blackest days over the last 5 years. At least with one home, you can sit it out, and the government will probably help you out to keep a roof over your head. But they ain't going to help you with a holiday home you cant sell.... If the greeks decide they wont continue with the pain being inflicted upon them, it could easily all unravel....
At least your property isn't in Spain. My mums retirement dream has turned into a living nightmare, Cant sell. She and my dad have lost everything they saved hard for all their lives, and their remaining equity is impossible to realease becasue no one can borrow and massive over supply.
Hi TT,
Sure is a sad situation for many older folk.
They could have been really enjoying sitting in the warm Spanish sun, adn a trip down to the beach whenever they felt.
But the economics just got turned on their head.
I remember the apartment prices in Spain were not excessively priced, and thousands upon thousands of Brits, and others bought what they saw then as a "bolt hole" some where to winter in the cold UK winters.
I would think though, that they should be able to sell at the price what they bought for, so just losing the interest, may be not, may be I am dreaming.
I did see a lot of empty, and part built shells of apartment blocks last time i was out there.
vette
A close friend bought houses in the European mainland as a pension fund. They provide a regular(ish) income from rents and hoiday lets. The idea was to sell the houses progressively as and when funds were needed. I nearly, so very nearly, went in with him.
He owes nothing on the houses, apart from rates and equivalent, so one might have thought he had it easy. But he's got problems. Mortgages are not available so no one buys, even at what he feels is a rock bottom price. Not the great investment plan he thought it would be.
Holiday lets are not quite as strong as they were although long term rents provide enough to live on. However, as the Euro drops against the £ so does his income. His plans for his own home have been put on hold. As he says, things are alright at the moment, there being a lot who are worse off than him, but his comfortble retirement is not quite so comfortable.
But, as he says, those who invested in pensions have also had their returns slashed so he doesn't know whether his choice was right or not.
There is no real safety. It's always a risk.
On a personal note, I've got debts, although a bit below the national average, but I've got more than enough savings to cover them. Where would I show on this scale? As someone in debt or in the black?
He owes nothing on the houses, apart from rates and equivalent, so one might have thought he had it easy. But he's got problems. Mortgages are not available so no one buys, even at what he feels is a rock bottom price. Not the great investment plan he thought it would be.
Holiday lets are not quite as strong as they were although long term rents provide enough to live on. However, as the Euro drops against the £ so does his income. His plans for his own home have been put on hold. As he says, things are alright at the moment, there being a lot who are worse off than him, but his comfortble retirement is not quite so comfortable.
But, as he says, those who invested in pensions have also had their returns slashed so he doesn't know whether his choice was right or not.
There is no real safety. It's always a risk.
On a personal note, I've got debts, although a bit below the national average, but I've got more than enough savings to cover them. Where would I show on this scale? As someone in debt or in the black?
Murph7355 said:
TTmonkey said:
.... If the greeks decide they wont continue with the pain being inflicted upon them, it could easily all unravel....
You of course mean the pain the Greek's inflicted upon themselves...Hugo a Gogo said:
Murph7355 said:
TTmonkey said:
.... If the greeks decide they wont continue with the pain being inflicted upon them, it could easily all unravel....
You of course mean the pain the Greek's inflicted upon themselves...Hugo a Gogo said:
you can't seriously believe that the man on the Greek street, Stavros Averageopolous, is to blame? yet they are the ones suffering for it
They did vote for their leaders (or at least the majority did). Same as we did for ours.I don't know what the latin for "Voter beware" is but there should be an equivalent to "caveat emptor".
Just as few people believe Estate Agents and Used car salesman are telling the whole truth surely we knew that our politicians would also not deliver on their promises.
"The public gets what the public wants" as Paul Weller once sang.
uk_vette said:
TTmonkey said:
Puggit said:
Smug git here.
No debts apart from mortgages on our 2 houses (one in UK, one in France). If it all goes horribly wrong we can sell one house and live mortgage free in the other. :cheers:
You seem pretty sure of yourself....No debts apart from mortgages on our 2 houses (one in UK, one in France). If it all goes horribly wrong we can sell one house and live mortgage free in the other. :cheers:
unfortuantly, bad stuff sometimes happens in an uncontrolled fashion, and usually all at once.
For example - in the next couple of months, we could see the colapse of the Euro. This could lead to widespread finacial disruption in the banks. You might find your house in france is now unsellable, as the banks wont lend and then the values plunge. So your stuck with a mortgage on an unsellable house.
then you lose your job due to the finacial termoil.... and the UK economy follows the Euro. Then your stuck with two houses you cant sell because no one can raise a mortgage.
Whats the back out plan for this situation? How do you liquidate your depreciating assets when no one can borrow money?
Cant happen? I think we're closer to this situation than we've ever been, even in the blackest days over the last 5 years. At least with one home, you can sit it out, and the government will probably help you out to keep a roof over your head. But they ain't going to help you with a holiday home you cant sell.... If the greeks decide they wont continue with the pain being inflicted upon them, it could easily all unravel....
At least your property isn't in Spain. My mums retirement dream has turned into a living nightmare, Cant sell. She and my dad have lost everything they saved hard for all their lives, and their remaining equity is impossible to realease becasue no one can borrow and massive over supply.
Hi TT,
Sure is a sad situation for many older folk.
They could have been really enjoying sitting in the warm Spanish sun, adn a trip down to the beach whenever they felt.
But the economics just got turned on their head.
I remember the apartment prices in Spain were not excessively priced, and thousands upon thousands of Brits, and others bought what they saw then as a "bolt hole" some where to winter in the cold UK winters.
I would think though, that they should be able to sell at the price what they bought for, so just losing the interest, may be not, may be I am dreaming.
I did see a lot of empty, and part built shells of apartment blocks last time i was out there.
vette
You want a Mortgage on that house? The one owned by the brit that wants to leave the country? No, you can't have it. Spanish banks will only loan money on their own repo'd housing stock, thus controlling the market....
And Brit banks wont loan money on Spanish property.
So its only cash buyers. And they know they've got you over a barrel, and they can be very very picky.
Its devestating. Far worse than people realise.
fido said:
I'm guessing the avarage Brit also has a couple of grand in savings as well. 
is early so dont know if that was a joke but if that were true the UK would be a very rosey place indeed
unlike the real situation we are in currently
2k per person savings
62mm x 2000£ = +124000000000 £ in savings
we can only wish !!!!
Edited by housen on Thursday 31st May 08:34
In my case the changed economic climate has changed my attitude to personal debt.
In 2007 excluding mortgage I had about £20k of debt that was easily serviced, I have steadily been reducing that and am now debt free (excluding mortgage).
The depressing thing is that I have less disposable income now, older cars and less interesting holidays. TBH it feels pretty depressing.
In 2007 excluding mortgage I had about £20k of debt that was easily serviced, I have steadily been reducing that and am now debt free (excluding mortgage).
The depressing thing is that I have less disposable income now, older cars and less interesting holidays. TBH it feels pretty depressing.
Hugo a Gogo said:
Murph7355 said:
TTmonkey said:
.... If the greeks decide they wont continue with the pain being inflicted upon them, it could easily all unravel....
You of course mean the pain the Greek's inflicted upon themselves..."The shadow economy and tax evasion are both widespread in Greece."
Headlines from that source and others cited in it include placing the shadow economy at 30% to 37% of GDP, tax evasion at 15% of GDP, self-employed under-reporting of income at 53% of filed returns, aggregate rate of income under-reporting for the purpose of tax evasion at 10% resulting in a 26% shortfall in tax receipts.
The Inspectorate Service of the Social Insurance Foundation IKA estimated that 27% of all workers were/are in 'informal' unregistered jobs.
Plenty of Stavros Averageopouloses worked the system.
blueg33 said:
In my case the changed economic climate has changed my attitude to personal debt.
In 2007 excluding mortgage I had about £20k of debt that was easily serviced, I have steadily been reducing that and am now debt free (excluding mortgage).
The depressing thing is that I have less disposable income now, older cars and less interesting holidays. TBH it feels pretty depressing.
But you were living beyond your means using debt (albeit it serviceable) to buy things you couldn't afford to buy outright. In 2007 excluding mortgage I had about £20k of debt that was easily serviced, I have steadily been reducing that and am now debt free (excluding mortgage).
The depressing thing is that I have less disposable income now, older cars and less interesting holidays. TBH it feels pretty depressing.
If you only spend what you can afford, in theory as your income rises you can spend more and be "richer" (in terms of the lifestyle you can afford) as you get older thus avoiding the "loss" you've experienced.
anyone can borrow money and live like a king for a short period, but unless you can increase your income at a rapid pace you will have to face the climb down.
You could consider it the consumer society equivalent to a drug habit. (cue "Just say no" by Zammo playing in the background)
GBB said:
But you were living beyond your means using debt (albeit it serviceable) to buy things you couldn't afford to buy outright.
If you only spend what you can afford, in theory as your income rises you can spend more and be "richer" (in terms of the lifestyle you can afford) as you get older thus avoiding the "loss" you've experienced.
anyone can borrow money and live like a king for a short period, but unless you can increase your income at a rapid pace you will have to face the climb down.
You could consider it the consumer society equivalent to a drug habit. (cue "Just say no" by Zammo playing in the background)
The point is that the debt was serviceable and I had cash to spare, so was I living beyond my means? If you only spend what you can afford, in theory as your income rises you can spend more and be "richer" (in terms of the lifestyle you can afford) as you get older thus avoiding the "loss" you've experienced.
anyone can borrow money and live like a king for a short period, but unless you can increase your income at a rapid pace you will have to face the climb down.
You could consider it the consumer society equivalent to a drug habit. (cue "Just say no" by Zammo playing in the background)
The thing for me is that my industry has been hit hardest by the recession so my income has stopped growing at the rate it was. Thats why I decided to pay off the loans. The fact I could pay them off demonstrates that I was not beyond my means.
But, I admit I made a mistake, in business I use debt to enable growth, I made the mistake of thinking that because debt was good in business it was good at home. But in reality, maybe mortgage is the only good personal debt as generally the asset it pays for grows in value whereas debt for a holiday is not. But yet again, feeling good is important, it helps with confidence and confidence in business increases success. It is not simple.
If you have surplus cash, why not use debt to spread payments over time? If the debt is serviceable then you can afford the item.
If no one financed a new car there would be no second hand cars for people to buy without a loan.
Edited by blueg33 on Thursday 31st May 09:08
TTmonkey said:
The biggest problem (well apart from the economic gloom and rampant unemployment) in Spain is the fact that the banks have massive amounts of repo'd houses on their books....
You want a Mortgage on that house? The one owned by the brit that wants to leave the country? No, you can't have it. Spanish banks will only loan money on their own repo'd housing stock, thus controlling the market....
And Brit banks wont loan money on Spanish property.
Thanks for that. I was a bit confused. I now see the problem. Obvious once it is explained.You want a Mortgage on that house? The one owned by the brit that wants to leave the country? No, you can't have it. Spanish banks will only loan money on their own repo'd housing stock, thus controlling the market....
And Brit banks wont loan money on Spanish property.
Ta.
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