£10,000 Debt

[ShawCrossShark]

GarryA said:

ShawCrossShark said:

Wouldn't surprise me. I have about £15k on top of my mortgage which I am struggling to pay back.

My wife (soon to be ex-wife) however has managed to escape without any

Did you not think to remortgage for the 15k, pay off debts, then sell the house.

1. Nowhere near enough equity in the house to cover it
2. Wouldn't get a mortgage for the required now based upon my income

Currently have my best mate living in as a lodger. Plan to sell up in the new year and either rent with him or move in with the new lady in my life. Once I am sharing with someone with lower outlay, then I will do everything in my power to get out of debt ASAP and avoid it in future.

Quite happy with my £500 pug if it lasts and will replace with another if it doesn't. Should have stood up to the silly cow with the 100 pairs of shoes and avoided the £7k wedding

We live and learn - at least I intend to once I dig my way out of it

[TTmonkey]

turbobloke said:

The wiki figures you quoted say basically the same thing as mine but yes they differ by date. I said debt was less than 200% GDP, your wiki quote says 126% GDP i.e. in agreement but I thought it was higher than that. Your wiki quote gives the deficit at 15% GDP well OK taking it at that level, do explain how tax evasion at 15% GDP isn't relevant. It clearly is.

Nothing in your post shows how running a shadow economy equivalent to one-third of GDP each year over 30 years can't get a country into trouble or, if it hadn't happened, how the situation wouldn't be vastly different and possibly quite positive.

Merely quoting slightly different figures to mine (which were eurostat data from the news release of April 2011) doesn't change a thing. Over the last thirty year period there has been a major widespread problem with the shadow economy and tax evasion in Greece, which in number terms is of the same gravity as their debt position.

The comment in your post about tax evasion and shadow economy problems being peanuts compared to their deficit and debt was incorrect.

Meanwhile where's the Christine Lagarde comment about shadow economy and tax evasion in Greece not being relevant? Clearly one year of paying more tax won;t solve the issues facing Greece but that wasn't ever claimed, the situation Greece is in can be traced back to the propensity across a significant section of the population over decades to play the system in terms of the shadow economy and tax evasion...which is what we're talking about, not tax avoidance.

Sorry i misread art of your original reply (sorry, got some vision probs). Hence my reply being much like what you've said.

Cant find the CL statement about greek tax evasion since the stuff about her not paying any income tax herself exploded over the internet, but it was something along the lines that she admitted that her original statement about the 'greeks should just pay their taxes' to fix their own economy was not accurate as their problems dwarf the extra revenue gained by that extra tax collection. Admittedly it would reduce their deficit, but they'd still be borrowing more than their GDP, therefore their debt would still be growing....

[BoRED S2upid]

How about possible debt not yet realised. For example how many people are trying to pay off 110% mortgages with their house now worth 80% of what it was when they took out the mortgage. A friend of mine is in this situation.

[TTmonkey]

BoRED S2upid said:

How about possible debt not yet realised. For example how many people are trying to pay off 110% mortgages with their house now worth 80% of what it was when they took out the mortgage. A friend of mine is in this situation.

Its only a paper profit, debt, not realised until the house is sold.


my how times have changed....

[anonymous-user]

DAVEVO9 said:

+1

I have 0 Debt

Great feeling

I have absolutely zero debt.

Nothing, not even a mortgage as my house is paid for.

And let me tell you... I still worry frequently about money!

Are we spending too much on the next holiday?
Am I saving enough?
Can I find ways to earn more?
Isn't petrol expensive these days?
This weeks shopping was £70, is anywhere else cheaper?
etc etc...

I think if I had debt on top of that my head would explode

[turbobloke]

NinjaPower said:

DAVEVO9 said:

+1

I have 0 Debt

Great feeling

I have absolutely zero debt.

Nothing, not even a mortgage as my house is paid for.

And let me tell you... I still worry frequently about money!

Are we spending too much on the next holiday?
Am I saving enough?
Can I find ways to earn more?
Isn't petrol expensive these days?
This weeks shopping was £70, is anywhere else cheaper?
etc etc...

I think if I had debt on top of that my head would explode

You're in a good position and that's great but you must realise the chances are very high that various people exist with some debt who are saving more and spending more too. Debt isn't always bad.

[anonymous-user]

turbobloke said:

NinjaPower said:

DAVEVO9 said:

+1

I have 0 Debt

Great feeling

I have absolutely zero debt.

Nothing, not even a mortgage as my house is paid for.

And let me tell you... I still worry frequently about money!

Are we spending too much on the next holiday?
Am I saving enough?
Can I find ways to earn more?
Isn't petrol expensive these days?
This weeks shopping was £70, is anywhere else cheaper?
etc etc...

I think if I had debt on top of that my head would explode

You're in a good position and that's great but you must realise the chances are very high that various people exist with some debt who are saving more and spending more too. Debt isn't always bad.

Oh I quite agree, and I also agree with an earlier poster who said there was nothing wrong with debt as long as its well serviced.

I was just meaning that I'm not the sort of person that could sleep at night knowing I owed £10k on a credit card or something.

[turbobloke]

NinjaPower said:

turbobloke said:

NinjaPower said:

DAVEVO9 said:

+1

I have 0 Debt

Great feeling

I have absolutely zero debt.

Nothing, not even a mortgage as my house is paid for.

And let me tell you... I still worry frequently about money!

Are we spending too much on the next holiday?
Am I saving enough?
Can I find ways to earn more?
Isn't petrol expensive these days?
This weeks shopping was £70, is anywhere else cheaper?
etc etc...

I think if I had debt on top of that my head would explode

You're in a good position and that's great but you must realise the chances are very high that various people exist with some debt who are saving more and spending more too. Debt isn't always bad.

Oh I quite agree, and I also agree with an earlier poster who said there was nothing wrong with debt as long as its well serviced.

I was just meaning that I'm not the sort of person that could sleep at night knowing I owed £10k on a credit card or something.

Fair enough.

Even so...

I've no idea of your personal status at the mo and have no wish to enquire, nor any intention to suggest anything but blissful wealth health and happiness in days to come but if - say - your future involved being just out of a costly divorce, a £10k debt may well be the least of your worries in terms of sleeping at night. Sometimes st happens and sleep is still needed, even with such a tiny debt at the back of your mind

[gck303]

Twincam16 said:

TTmonkey said:

Do you own everything you have without any associated debt?

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.

Thing is, that describes me. I wouldn't dream of getting into debt to afford anything other than a house, simply because that's what I was brought up with, it makes sense to me and in my family it's normal. It's not like we're massively wealthy or anything, we just only buy stuff we can literally put our hands in our pockets and pay for there and then.

To be frank I'm amazed most people in this country are allowed loans for anything other than property. How on earth someone on a £24k average salary can justify almost as much on a car that'll be worthless in ten years really is beyond me.

You are absolutely spot on. Buying a car on credit is totally insane.

It is possible to buy a totally serviceable car for 1,500. If something goes wrong? Go and get a Haynes manual, screwdriver and go to a breakers yard.

My car cost 10% of my gross income. I think everyone can do that...

[Big E 118]

gck303 said:

You are absolutely spot on. Buying a car on credit is totally insane.

It is possible to buy a totally serviceable car for 1,500. If something goes wrong? Go and get a Haynes manual, screwdriver and go to a breakers yard.

My car cost 10% of my gross income. I think everyone can do that...

Wow you tied up 10% of your gross income in a depreciating asset, that's totally insane

It's entirely your choice if you want to buy a £1,500.00 quid car cash but it's absurd to state that "Buying a car on credit is totally insane".

Roman Abramovich took on nearly £300m of Chelsea's debt. He is worth (dependent on sources) somewhere between £15 and £20 billion. Why didn't he just pay the £300m in cash rather than taking on a debt? Do you think that he's insane because he has debt?

Not too many years ago Apple were over $600 million in debt, now they huge cash reserves. Where did that come from? They took out debt to invest in development and purchasing technologies for iPhone/iPad and made a fortune out of it. Was Steve Jobs insane? Do you think they now buy companies for cash or do they still borrow money for large acquisitions?

Other traditional heavy borrowers include Larry Ellison and Bill Gates.

You can use credit lines in personal finances as well to great effect. Most people with a decent accountant will tell you that.

[GBB]

Big E 118 said:

Wow you tied up 10% of your gross income in a depreciating asset, that's totally insane

It's entirely your choice if you want to buy a £1,500.00 quid car cash but it's absurd to state that "Buying a car on credit is totally insane".

Roman Abramovich took on nearly £300m of Chelsea's debt. He is worth (dependent on sources) somewhere between £15 and £20 billion. Why didn't he just pay the £300m in cash rather than taking on a debt? Do you think that he's insane because he has debt?

Not too many years ago Apple were over $600 million in debt, now they huge cash reserves. Where did that come from? They took out debt to invest in development and purchasing technologies for iPhone/iPad and made a fortune out of it. Was Steve Jobs insane? Do you think they now buy companies for cash or do they still borrow money for large acquisitions?

Other traditional heavy borrowers include Larry Ellison and Bill Gates.

You can use credit lines in personal finances as well to great effect. Most people with a decent accountant will tell you that.

Very true but it doesn't always work. Lots of perfectly profitable companies have been sunk by the cost of servicing their debts, indeed I believe Greece and Spain have that problem right now. Spain was actually the poster boy of the EU with low debt as % of GDP and balanced spending compared to others. Then the property bubble burst.......

Taking on debt is a gamble and some you win and some you lose.

Upside of corporate debt is liquidation with no/low personal implications, downside of personal debt is bankruptcy.

So....start a limited company and purchase everything through that

[anonymous-user]

turbobloke said:

Fair enough.

Even so...

I've no idea of your personal status at the mo and have no wish to enquire, nor any intention to suggest anything but blissful wealth health and happiness in days to come but if - say - your future involved being just out of a costly divorce, a £10k debt may well be the least of your worries in terms of sleeping at night. Sometimes st happens and sleep is still needed, even with such a tiny debt at the back of your mind

My circumstances are '31 years old and unmarried' but with a girlfriend of several years.

The Times once published a magazine article a few years ago that basically said: Any gentlemen who is independently and reasonably 'well off' gets married is frankly, quite mental.

The article said you might as well just find some random girl, give them your car and half your house, plus a load of cash, thus cutting out the 'middleman' that is marriage.

I think that is a massively depressing and pessimistic view, but it it's the sort of thing that makes you think.

I would like to state that I am in no way shape of form 'loaded' unlike a lot of people on here, and do not live a particularly extravagant lifestyle, but I still wouldn't like to lose any of it!

[Big E 118]

GBB said:

Very true but it doesn't always work. Lots of perfectly profitable companies have been sunk by the cost of servicing their debts, indeed I believe Greece and Spain have that problem right now. Spain was actually the poster boy of the EU with low debt as % of GDP and balanced spending compared to others. Then the property bubble burst.......

Taking on debt is a gamble and some you win and some you lose.

Upside of corporate debt is liquidation with no/low personal implications, downside of personal debt is bankruptcy.

So....start a limited company and purchase everything through that

Completely agree, it's the same on a personal debt level there are people that borrow sensibly and people that are complete idiots. I'm only saying you can use sensible borrowing to better your finances, not borrowing because your neighbours have a better car than you.

[housen]

NinjaPower said:

turbobloke said:

Fair enough.

Even so...

I've no idea of your personal status at the mo and have no wish to enquire, nor any intention to suggest anything but blissful wealth health and happiness in days to come but if - say - your future involved being just out of a costly divorce, a £10k debt may well be the least of your worries in terms of sleeping at night. Sometimes st happens and sleep is still needed, even with such a tiny debt at the back of your mind

My circumstances are '31 years old and unmarried' but with a girlfriend of several years.

The Times once published a magazine article a few years ago that basically said: Any gentlemen who is independently and reasonably 'well off' gets married is frankly, quite mental.

The article said you might as well just find some random girl, give them your car and half your house, plus a load of cash, thus cutting out the 'middleman' that is marriage.

I think that is a massively depressing and pessimistic view, but it it's the sort of thing that makes you think.

I would like to state that I am in no way shape of form 'loaded' unlike a lot of people on here, and do not live a particularly extravagant lifestyle, but I still wouldn't like to lose any of it!

agreed same as you 31 etc ...defo dont wanna get married unless i really know ...most people i know who have lost their small fortunes have been to marriage ...buyer beware

[Derek Smith]

ShawCrossShark said:

We live and learn

Evidence suggests that we live and go on to make the same mistakes time and again.

Micawber was right: "Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

The amount of money you earn is largely immaterial. It is whether you have any left over at the end of the month. Even sixpence.

I went from being poor, in the sense that we had to 'give up' some of the minor luxuries each month, like a meal out, to having a little (a bit more than sixpence) over even after we indulged ourselves. It was when the kids finally left home. They used to pay a bit towards their upkeep but it's not until they are no longer raiding the fridge every night that you realise just how much they cost. My youngest brought home half a dozen of his rugby team one Saturday before going out clubbing. They emptied the fridge of the Friday shop. No eggs, bacon, sausages, bread and such remained. When I mentioned his locust-like habits he said that they used a bit of sense and 'spread it around the various parents.'

That was a relief.

It is also a relief not to have to count every pound.

We are downsizing and the expectation is that heating (three rooms less and room size of those remaining about 75% of what we are leaving) and rates will make a big difference as well. But the trick is to live within your means.

[GBB]

Big E 118 said:

Completely agree, it's the same on a personal debt level there are people that borrow sensibly and people that are complete idiots. I'm only saying you can use sensible borrowing to better your finances, not borrowing because your neighbours have a better car than you.

Totally. As i posted earlier buy assets not liabilities, borrowing money for a greater return is sound financial activity, borrowing to buy a shiny new car worth 50% less or more in 3 yrs isn't so sound.

Step 1 I reckon is to stop trying to keep up with neighbours/friends, let them be chumps.

[gck303]

With these feet said:

Searched the ads for a "reliable" marque (I worked for Honda so preferred choice)
Saw a 98 5 door with 24k genuine miles fsh etc. £1250 (more than its probably worth but hey?)
Few tiny dings but immaculate inside. Needed £100 worth of brakes as seized caliper/ wheel cyl's but went through a test with no advisories. £1350 for a low mileage car (40 - 45 mpg, with working A/C I add!).
I had previously paid off a personal loan on the Accord which was £175 a month - so £2100 a year. Ok so not in the same league but costwise worthwhile. 2nd class driving is always better than 1st class walking!
New cars will be considerably more to buy than this, and unless you buy a complete pup, bangernomics is very difficult to argue with.

Totally agree.

If you borrow 20k to finance the loan on a new car, then you have to pay around 2,000 just in interest.

The idea that a brand new car is less expensive than an older one is ludicrous.

In fact, no different really to the idea you need a full set of service stamps to 'maintain the history and value'. Seriously, is a single stamp going to add 300# to the value of a car that is only work 4,000? Think not.

[anonymous-user]

The only trick to getting wealthy is this:
invest 10% of your money each month; and if it flys, floats, or fks: lease it.

[gck303]

Big E 118 said:

Wow you tied up 10% of your gross income in a depreciating asset, that's totally insane


Not too many years ago Apple were over $600 million in debt, now they huge cash reserves. Where did that come from? They took out debt to invest in development and purchasing technologies for iPhone/iPad and made a fortune out of it. Was Steve Jobs insane? Do you think they now buy companies for cash or do they still borrow money for large acquisitions?

You are totally missing the point. These borrowed to finance something that generates wealth.

A car is the exact opposite. It does not produce wealth, infact it is the opposite it consumes wealth. It uses fuel and costs money to maintain.

If you use it to provide an income, such as a taxi or limo, then that is an income producing asset. And very much not the subject of this discussion.

[Big E 118]

gck303 said:

Big E 118 said:

Wow you tied up 10% of your gross income in a depreciating asset, that's totally insane


Not too many years ago Apple were over $600 million in debt, now they huge cash reserves. Where did that come from? They took out debt to invest in development and purchasing technologies for iPhone/iPad and made a fortune out of it. Was Steve Jobs insane? Do you think they now buy companies for cash or do they still borrow money for large acquisitions?

You are totally missing the point. These borrowed to finance something that generates wealth.

A car is the exact opposite. It does not produce wealth, infact it is the opposite it consumes wealth. It uses fuel and costs money to maintain.

If you use it to provide an income, such as a taxi or limo, then that is an income producing asset. And very much not the subject of this discussion.

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.