£10,000 Debt

[GBB]

Big E 118 said:

But if you lease a car which depreciates but you can make more money from the equity you have then freed up you are either making a profit or in a lot of cases, having a great new car that depreciates heavily but actually minimising the costs. i.e. own a Ferrari but with the costs of a Ford.

If you are leasing then depreciation isn't your concern. A lease and a loan are two very different things.

As was said earlier

TopOnePercent said:

if it flys, floats, or ****s: lease it.

[Red 4]

Question is how much debt per capita will there be in 5 or 10 years time ?

I can't see any easy way out of the country's current predicament. In fact I think it will get worse (sorry to sound so pessimistic but I think the odds are in favour of more economic gloom)

Apparently people are trying to get rid of debt and balance the books but how will this be possible with more job losses, inflation, interest rate rises in the medium term and frozen salaries ?

Not to mention the knock on effect of Europe/ the Euro crisis.

[Welshbeef]

Fact is everybody needs stuff and stuff wears out or you eat some types of stuff.
There is nothing wrong with debt per say in fact for the right type of person debt to buy certain things instead of using cash (cash can be invested elsewhere for better return)

Personally at this point in my life I've got it into my head I want to be mortgage free ASAP ie before 36/37 in the forever home. I could blow heaps on other bits but am trying hard not to as jobs come and go but mortgage free it's easy to then pay for the basics.

[Murph7355]

Hugo a Gogo said:

so self employed 'correct reporting' was near half, 63% were in normal official jobs
a lot of scamming going on, yes

half of the cars on the road are speeding, so we'll give everyone a ticket

so why was the government still spending more than they got in and fiddling the books to get in the Euro?

You really need to think through it a bit more.

As others have mentioned, the shadow economy and tax evasion are not the sole preserve of the wealthy. Nor is being self employed. Stavros Popodopoulos in the street is just as likely to be joining in than anyone else (especially when Megastavros offers him cash in hand to wash his Ferrari).

Also, what do you think the govt was spending the money on? How many of those 63% employed in "normal" jobs were in the employ of the govt? And how many of them were on the streets rioting when cuts were being tabled? How many of them were receiving state provided benefits?

To blame "the rich" is very easy. Too easy. The difficult truth is that the man in the street IS to blame.

It's exactly the same in this country too (can't cut Child Benefit, can't make students pay their own fees, can't touch the NHS because if you do, your innocent man in the street will get upset and have you out of power).

[turbobloke]

Murph7355 said:

Hugo a Gogo said:

so self employed 'correct reporting' was near half, 63% were in normal official jobs
a lot of scamming going on, yes

half of the cars on the road are speeding, so we'll give everyone a ticket

so why was the government still spending more than they got in and fiddling the books to get in the Euro?

Stavros Popodopoulos in the street is just as likely to be joining in than anyone else (especially when Megastavros offers him cash in hand to wash his Ferrari).

To blame "the rich" is very easy. Too easy. The difficult truth is that the man in the street IS to blame.

Correct. Researchers found a U-shape profile with both the lowest and highest earners most involved in working the system. Those in the middle weren't saints either.

[GBB]

Red 4 said:

Question is how much debt per capita will there be in 5 or 10 years time ?

I can't see any easy way out of the country's current predicament. In fact I think it will get worse (sorry to sound so pessimistic but I think the odds are in favour of more economic gloom)

Apparently people are trying to get rid of debt and balance the books but how will this be possible with more job losses, inflation, interest rate rises in the medium term and frozen salaries ?

Not to mention the knock on effect of Europe/ the Euro crisis.

Only real solution is inflating away our debts (reducing value of £, thus reducing relative debt), hence the high inflation figures recently haven't troubled the government.

[Red 4]

GBB said:

Only real solution is inflating away our debts (reducing value of £, thus reducing relative debt), hence the high inflation figures recently haven't troubled the government.

I see your point but I don't see how that would work (although I'm sure the government would love it to)

Inflation has risen in the past due to people spending and the usual method adopted to combat it has been to increase interest rates.

The problem now is that people aren't spending and are being much more frugal. The cost of living has risen without consumers fueling the fire. Wages are stagnant. The only thing keeping many afloat are low interest rates.

Surely, given the bleak outlook, more and more people will increse their debts just to survive (in the short term at least).



Assuming, of course, that the banks will give them credit.

[GBB]

Red 4 said:

I see your point but I don't see how that would work (although I'm sure the government would love it to)

Inflation has risen in the past due to people spending and the usual method adopted to combat it has been to increase interest rates.

The problem now is that people aren't spending and are being much more frugal. The cost of living has risen without consumers fueling the fire. Wages are stagnant. The only thing keeping many afloat are low interest rates.

Surely, given the bleak outlook, more and more people will increse their debts just to survive (in the short term at least).



Assuming, of course, that the banks will give them credit.

Interest rates can be used to curb inflation if it caused by increased consumer spending but that isn't the case here. We've seen reasonable levels of inflation over the last 24 months caused by a devaluing currency and increased raw materials costs only, as right now wages aren't rising in line with inflation and house prices are static so in reality this inflation isn't be a problem for the government.

How to solve the "pensions problem" - halve the real value of the pensions via inflation.

[Red 4]

GBB said:

Interest rates can be used to curb inflation if it caused by increased consumer spending but that isn't the case here. We've seen reasonable levels of inflation over the last 24 months caused by a devaluing currency and increased raw materials costs only, as right now wages aren't rising in line with inflation and house prices are static so in reality this inflation isn't be a problem for the government.

How to solve the "pensions problem" - halve the real value of the pensions via inflation.

Yep, gotcha. But I think that's quite a simplistic view.

The economy is faltering and unless inflation is addressed it will cause huge problems.

Quite simply people will not spend because they will not have the cash and everything will go on mortgage/ rent, food, bills, fuel, etc. etc.

Nobody spending money = no economy

The pound is actually quite strong at the moment which hurts our exports (which are few and far between anyway) Factor in a Euro crash and our exports will be hit further.

Add to that a banking implosion which is certain if the Euro fails and you open a real can of worms.

Edited by Red 4 on Friday 1st June 00:21

[GBB]

Red 4 said:

Yep, gotcha. But I think that's quite a simplistic view.

The economy is faltering and unless inflation is addressed it will cause huge problems.

Quite simply people will not spend because they will not have the cash and everything will go on mortgage/ rent, food, bills, fuel, etc. etc.

Nobody spending money = no economy

The pound is actually quite strong at the moment which hurts our exports (which are few and far between anyway) Factor in a Euro crash and our exports will be hit further.

Add to that a banking implosion which is certain if the Euro fails and you open a real can of worms.

Edited by Red 4 on Friday 1st June 00:21

It's a real pack of cards and frankly I think it's going to get a lot, lot worse. I laugh when you see all the politicians talking on the TV becuase that's all it is, talk. No one has taken any real action that will change things, to do so requires ba**s and none of our lot our strong enough to stand up to an electorate who think that nothing is wrong and with a few tweaks the goods times will roll again.

To borrow from a well-known comedian "Look at China, that's you that is" - look at how the average person lives over there and that's what we are moving towards - a much, much smaller welfare state and lower wages (comparitive to the ROW) we simply cannot afford what we have right now, we either cut or the markets will eventually cut off funding.

Spending on mortgage/ rent, food, bills, fuel, etc. etc will be the economy and it will be smaller. Our hope is to regrow UK manufacturing and also bring in external investment (companies basing themselves here), I actually think both of these are feasible in the long term.

[cymtriks]

Ten thousand is just an average.

As some households have no debt the figure for households with debt is circa twenty thousand.

That is a truly shocking figure given that its nearly a years income in many homes.

Over the last twenty five years:
I've never used a credit card.
I've had four bank loans, two of which were over twenty years ago, all paid off.

One of those loans was taken out to stop the wife from moaning about the speed of furnishing our first home, the other three were for cars.
It would have been hard not to get by without those loans it would certainly have been possible. I can honestly say that I've never missed having a credit card.

Some people, in fact an awful lot of people, are just Muppets with money.

[turbobloke]

GBB said:

You need a different wife!

That process can be considerably more expensive than a credit card, or indeed keeping the wife!