Financed lifestyles
Discussion
djc206 said:
Badda said:
BobSaunders said:
Mortgage and only a car PCP loan. Everything else is paid in cash (via a credit card for protection).
So everything is borrowed. Ok. He said he had zero debt other than mortgage, car loan and credit card...
DonkeyApple said:
Here’s the thing about debt. The right amount of debt facilitates wealth creation. The wrong amount drives poverty and amplifies the wealth divide and leads to all the social ills that have blighted all human societies that have failed to regulate and balance debt correctly.
We had regulation in place to prevent the asset inflation and excess spending that destroys a society and this has been systematically removed to specifically create asset inflation and excess spending so everyone feels wealthier but in reality most are getting poorer as the expanding wealth divide moves them further and further away from each successive step up.
That’s the big macro economic stuff out the way. Basically, debt is good if accessed in the right way but phenomenally toxic and lethal if not and destroys lives and societies.
Down at our level, if you already live at the bottom end of society then spend and borrow away. There is no massive downside. When you’ve borrowed too much you just default and you are already living the level of lifestyle that you will end up at so there just isn’t much downside.
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
It’s the middle group that is at risk. And the risk is where people are choosing either to save or to fund debt to procure a lifestyle today but without those savings they won’t be able to maintain a lifestyle post employment anywhere near the same level. The problem is that this social group, the middle, is today very large and they will probably make an awful racket when they get retired from employment in their 50s and don’t have any savings to replicate that employer income to keep the merry go round moving.
It’s entirely their choice to destroy their future prospects to have everything now but the problem is that they really are going to kick off when the lifestyle change lands on their doorstep and demand that everyone else bails them out as they want to keep up their working lifestyle. For them it’s a deal with the devil.
At the same time our governments have deliberately and insidiously created this environment by removing key consumer regulations. It inflates house prices so people feel richer and spend more, it increase tax receipts as the whole of society spends more than it earns and most insidious of all, it synthesises wage inflation for the poorest which supercharges the growth of the wealth divide to damaging levels.
Sounds about right to me. We had regulation in place to prevent the asset inflation and excess spending that destroys a society and this has been systematically removed to specifically create asset inflation and excess spending so everyone feels wealthier but in reality most are getting poorer as the expanding wealth divide moves them further and further away from each successive step up.
That’s the big macro economic stuff out the way. Basically, debt is good if accessed in the right way but phenomenally toxic and lethal if not and destroys lives and societies.
Down at our level, if you already live at the bottom end of society then spend and borrow away. There is no massive downside. When you’ve borrowed too much you just default and you are already living the level of lifestyle that you will end up at so there just isn’t much downside.
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
It’s the middle group that is at risk. And the risk is where people are choosing either to save or to fund debt to procure a lifestyle today but without those savings they won’t be able to maintain a lifestyle post employment anywhere near the same level. The problem is that this social group, the middle, is today very large and they will probably make an awful racket when they get retired from employment in their 50s and don’t have any savings to replicate that employer income to keep the merry go round moving.
It’s entirely their choice to destroy their future prospects to have everything now but the problem is that they really are going to kick off when the lifestyle change lands on their doorstep and demand that everyone else bails them out as they want to keep up their working lifestyle. For them it’s a deal with the devil.
At the same time our governments have deliberately and insidiously created this environment by removing key consumer regulations. It inflates house prices so people feel richer and spend more, it increase tax receipts as the whole of society spends more than it earns and most insidious of all, it synthesises wage inflation for the poorest which supercharges the growth of the wealth divide to damaging levels.
markcoznottz said:
Badda said:
BobSaunders said:
Mortgage and only a car PCP loan. Everything else is paid in cash (via a credit card for protection).
So everything is borrowed. Ok. I have no choice on the mortgage, it's an asset which appreciates. The car i 'rent' as it is a depreciating asset.
What gives me the jitters is the cost of child care.. do kids appreciate or depreciate?
Badda said:
BobSaunders said:
The car i 'rent' as it is a depreciating asset.
This always makes me chuckle. What exactly do you mean by this? You're aware it's costing you more than buying it outright yes? Badda said:
This always makes me chuckle. What exactly do you mean by this? You're aware it's costing you more than buying it outright yes?
Can of worms opened.Hes been told by someone he thinks is financially smart that appreciate=buy, depreciate=rent.
Cars only depreciate when you come to sell it. Leasing works well if you NEED a new car every 2/3 years. Most people don't, so by leasing they are financing the largest portion of depreciation on a car perpetually.
If you need a new car then fair enough, leasing is usually more cost effective than buying out right.
All depends on a person's individual situation but most people I know who have leased cars dont need one.
Edited by WonkeyDonkey on Wednesday 31st July 19:47
BobSaunders said:
Badda said:
BobSaunders said:
The car i 'rent' as it is a depreciating asset.
This always makes me chuckle. What exactly do you mean by this? You're aware it's costing you more than buying it outright yes? No I don’t know your situation. I know that the finance company is making money out of your ownership of the car though.
Badda said:
BobSaunders said:
Badda said:
BobSaunders said:
The car i 'rent' as it is a depreciating asset.
This always makes me chuckle. What exactly do you mean by this? You're aware it's costing you more than buying it outright yes? No I don’t know your situation. I know that the finance company is making money out of your ownership of the car though.
Badda said:
BobSaunders said:
Of course they are. They don't give out money because they have got bored do they..
Not quite sure what you mean. However, my point remains that the company is making money from you as owning the vehicle (as they do) is cheaper than renting the vehicle (as you do). What this means is that paying cash isn’t necessity the cheapest option over exorbitant house finance because the house controls what you pay and what the debt is based on.
DonkeyApple said:
The problem with this is that RRPs are artificially inflated to act as a tool to steer consumers into house finance and away from third party finance or paying cash. Hence why we have the fraud of ‘dealer’ or ‘manufacturer contributions’. These aren’t obviously contributions or discounts but a removal of the premium that exists to lock out third party payment solutions.
What this means is that paying cash isn’t necessity the cheapest option over exorbitant house finance because the house controls what you pay and what the debt is based on.
Agreed, buying brand new cash makes little sense. However many buy second hand and still finance, this is more expensive than buying outright. I’m sure many would attempt to justify the need for a new car but how many really need one?What this means is that paying cash isn’t necessity the cheapest option over exorbitant house finance because the house controls what you pay and what the debt is based on.
Badda said:
Not quite sure what you mean. However, my point remains that the company is making money from you as owning the vehicle (as they do) is cheaper than renting the vehicle (as you do).
This always makes me chuckle. Let’s be honest how many really need a car at all? Most people could live walking distance to their work, they just don’t like the area, or choose to work somewhere they can’t afford to live. Hire a car for the occasional REAL need. Owning a car at all is just someone making money from you! Insurance and tax for legal permission to drive it, fuel to make it move at all, parts and tyres to keep it from killing or stranding you, labour for those if you can’t do it yourself...
(Amend statement to reinforce whatever position you find yourself comfortable on the new car > no car spectrum.)
Dr Jekyll said:
Daverb said:
Export56 said:
Apart from houses( now paid off) and my first car I have never had a loan. I can't stand the thought of paying interest as lost money. I even buy my phone outright as it saved me 170 £ compared to contract. Every pound in interest is one less in my pension.
I very much doubt this.Is this for real or is it just people coming onto paint a picture of their perfect lives which arent really perfect.
It does not however bother me when people do choose to. It plays no effect onto my or anyone elses lives except their own. It's also great for the economy and shiny things can be very rewarding, although most people grow out of it anyway I've noticed.
DonkeyApple said:
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
Whilst I wouldn't 'class myself at the top end of society' you've summed up my view perfectly. I'll admit it took some time to make that decision but you can never know what's around the corner healthwise etc.DonkeyApple said:
Here’s the thing about debt. The right amount of debt facilitates wealth creation. The wrong amount drives poverty and amplifies the wealth divide and leads to all the social ills that have blighted all human societies that have failed to regulate and balance debt correctly.
We had regulation in place to prevent the asset inflation and excess spending that destroys a society and this has been systematically removed to specifically create asset inflation and excess spending so everyone feels wealthier but in reality most are getting poorer as the expanding wealth divide moves them further and further away from each successive step up.
That’s the big macro economic stuff out the way. Basically, debt is good if accessed in the right way but phenomenally toxic and lethal if not and destroys lives and societies.
Down at our level, if you already live at the bottom end of society then spend and borrow away. There is no massive downside. When you’ve borrowed too much you just default and you are already living the level of lifestyle that you will end up at so there just isn’t much downside.
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
It’s the middle group that is at risk. And the risk is where people are choosing either to save or to fund debt to procure a lifestyle today but without those savings they won’t be able to maintain a lifestyle post employment anywhere near the same level. The problem is that this social group, the middle, is today very large and they will probably make an awful racket when they get retired from employment in their 50s and don’t have any savings to replicate that employer income to keep the merry go round moving.
It’s entirely their choice to destroy their future prospects to have everything now but the problem is that they really are going to kick off when the lifestyle change lands on their doorstep and demand that everyone else bails them out as they want to keep up their working lifestyle. For them it’s a deal with the devil.
At the same time our governments have deliberately and insidiously created this environment by removing key consumer regulations. It inflates house prices so people feel richer and spend more, it increase tax receipts as the whole of society spends more than it earns and most insidious of all, it synthesises wage inflation for the poorest which supercharges the growth of the wealth divide to damaging levels.
This really is a pretty good assessment. Should have studied harder so I could have written it.We had regulation in place to prevent the asset inflation and excess spending that destroys a society and this has been systematically removed to specifically create asset inflation and excess spending so everyone feels wealthier but in reality most are getting poorer as the expanding wealth divide moves them further and further away from each successive step up.
That’s the big macro economic stuff out the way. Basically, debt is good if accessed in the right way but phenomenally toxic and lethal if not and destroys lives and societies.
Down at our level, if you already live at the bottom end of society then spend and borrow away. There is no massive downside. When you’ve borrowed too much you just default and you are already living the level of lifestyle that you will end up at so there just isn’t much downside.
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
It’s the middle group that is at risk. And the risk is where people are choosing either to save or to fund debt to procure a lifestyle today but without those savings they won’t be able to maintain a lifestyle post employment anywhere near the same level. The problem is that this social group, the middle, is today very large and they will probably make an awful racket when they get retired from employment in their 50s and don’t have any savings to replicate that employer income to keep the merry go round moving.
It’s entirely their choice to destroy their future prospects to have everything now but the problem is that they really are going to kick off when the lifestyle change lands on their doorstep and demand that everyone else bails them out as they want to keep up their working lifestyle. For them it’s a deal with the devil.
At the same time our governments have deliberately and insidiously created this environment by removing key consumer regulations. It inflates house prices so people feel richer and spend more, it increase tax receipts as the whole of society spends more than it earns and most insidious of all, it synthesises wage inflation for the poorest which supercharges the growth of the wealth divide to damaging levels.
GT03ROB said:
DonkeyApple said:
Here’s the thing about debt. The right amount of debt facilitates wealth creation. The wrong amount drives poverty and amplifies the wealth divide and leads to all the social ills that have blighted all human societies that have failed to regulate and balance debt correctly.
We had regulation in place to prevent the asset inflation and excess spending that destroys a society and this has been systematically removed to specifically create asset inflation and excess spending so everyone feels wealthier but in reality most are getting poorer as the expanding wealth divide moves them further and further away from each successive step up.
That’s the big macro economic stuff out the way. Basically, debt is good if accessed in the right way but phenomenally toxic and lethal if not and destroys lives and societies.
Down at our level, if you already live at the bottom end of society then spend and borrow away. There is no massive downside. When you’ve borrowed too much you just default and you are already living the level of lifestyle that you will end up at so there just isn’t much downside.
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
It’s the middle group that is at risk. And the risk is where people are choosing either to save or to fund debt to procure a lifestyle today but without those savings they won’t be able to maintain a lifestyle post employment anywhere near the same level. The problem is that this social group, the middle, is today very large and they will probably make an awful racket when they get retired from employment in their 50s and don’t have any savings to replicate that employer income to keep the merry go round moving.
It’s entirely their choice to destroy their future prospects to have everything now but the problem is that they really are going to kick off when the lifestyle change lands on their doorstep and demand that everyone else bails them out as they want to keep up their working lifestyle. For them it’s a deal with the devil.
At the same time our governments have deliberately and insidiously created this environment by removing key consumer regulations. It inflates house prices so people feel richer and spend more, it increase tax receipts as the whole of society spends more than it earns and most insidious of all, it synthesises wage inflation for the poorest which supercharges the growth of the wealth divide to damaging levels.
This really is a pretty good assessment. Should have studied harder so I could have written it.We had regulation in place to prevent the asset inflation and excess spending that destroys a society and this has been systematically removed to specifically create asset inflation and excess spending so everyone feels wealthier but in reality most are getting poorer as the expanding wealth divide moves them further and further away from each successive step up.
That’s the big macro economic stuff out the way. Basically, debt is good if accessed in the right way but phenomenally toxic and lethal if not and destroys lives and societies.
Down at our level, if you already live at the bottom end of society then spend and borrow away. There is no massive downside. When you’ve borrowed too much you just default and you are already living the level of lifestyle that you will end up at so there just isn’t much downside.
If you live at the top end of society and you’ve taken care of your main obligations such as property, pension, children’s education etc etc then the money that you have left over each month can be pissed away and if you want to piss it away on financing toys then go for it as there just isn’t any risk or destruction of wealth. You are simply pissing away your excess income after taking care of everything else, the way you want to.
It’s the middle group that is at risk. And the risk is where people are choosing either to save or to fund debt to procure a lifestyle today but without those savings they won’t be able to maintain a lifestyle post employment anywhere near the same level. The problem is that this social group, the middle, is today very large and they will probably make an awful racket when they get retired from employment in their 50s and don’t have any savings to replicate that employer income to keep the merry go round moving.
It’s entirely their choice to destroy their future prospects to have everything now but the problem is that they really are going to kick off when the lifestyle change lands on their doorstep and demand that everyone else bails them out as they want to keep up their working lifestyle. For them it’s a deal with the devil.
At the same time our governments have deliberately and insidiously created this environment by removing key consumer regulations. It inflates house prices so people feel richer and spend more, it increase tax receipts as the whole of society spends more than it earns and most insidious of all, it synthesises wage inflation for the poorest which supercharges the growth of the wealth divide to damaging levels.
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