Thursday, Oct 18, 2007
Maybe they are correct
BBC News: Property viewed 'safer than cash'
A £200K property will only fall to around £80-100K.
£200K in the bank that goes bust will return you £35K under the current bail-out scheme
Posted by sold 2 rent 1 @ 01:10 PM (1181 views) Add Comment
12 Comments
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1. Thirtytoforty said...
Whereas spreading your money around different properties will still lose you 100 - 120k yet spreading across sufficent banks in appropriate quantities will return you 100% of your cash! Doh!
2. dohousescrashinthewoods said...
In the wibbly wobbly world where the hard value of truth has been forgotten and any bank can say it is doing fine until the day it closes, no wonder people pull their savings out.
If there was honest information, the gradient of worrying information would be much more gradual and people could judge risk/reward for themselves and wouldn't have to assume the worst based on no information or, worse, faulty information. In engineering terms, spin introduces a broken feedback loop and in economic terms, it introduces inefficiency. The only thing that benefits from spin is the short term future of the liar - it is fundamentally selfish and short-sighted.
Put like this, truth makes a lot of financial sense - even basic time and effort savings of not having to constantly re-evaluate the information you have, asking if it is false, why it is false and what the true picture is, are worth it. The West has badly failed on this most basic currency of trust and stability depends on trust. Ergo spin is a destabilising force.
Ergo Mr Blair and Mr Brown have enacted a decade of selfishness, lies and destabilisation.
3. uncle chris said...
If you have all your eggs in NS&I, as we have now, then all your money should be "100% secure". In which case, that £231K in 3 years will be far better than the £80-100K left in bricks and mortar. Seriously people, stash your pennies somewhere safe whilst you still can.
4. Pendulum said...
Hence £35k in several banks... earning interest and fully protected.
5. sold 2 rent 1 said...
uncle chris,
You may have protected the 231K in absolute terms. With M3 growing at 13%, you are not protected from a falling GBP that is sure to happen. Get some gold too.
6. cyril said...
I think it is widely known that property is a fairly safe investment - it just isn't quite as safe as most people think. Nobody in their right mind would borrow 4x their salary and put it in the bank.
Also the analysis is a bit flawed don't you think? You're better of with a million quid house because this way you'll only lose you half a million. Put that money in the bank and you'd lose nearly all of it (£965,000).
7. planning4acrash said...
Rediculous, you can put the money into government bonds, have it all protected, put it in a number of banks, max of £33k in each, put some in gold, put some in silver. If you have cash, and you invest it unwisely, there's a chance you may loose some, have it in property and its a dead cert, remember that you don't need to service a loan to have cash in a bank, whilst you do to have a house, which can, unlike your savings, be re-posessed.
8. lvmreader said...
The whole idea that you only can do property, cash or gold is missing so many other juicy asset classes.
What about
- Equities
- Bonds
- FX
- Rates
- Inflation protected asset classes like stocks in Infrastructure funds
- Mutual Funds
- Hedge Funds
?Huh? How about the S&P Index? The Wilshire? The Russell? The DJIA? Hell, even the NASDAQ? How about the Nikkei?
9. This comment has been removed as it was found to be in breach of our Blog Policies.
10. confused76 said...
S2R1
"A £200K property will only fall to around £80-100K."
yeah but since the average homeowner has only 30% equity. he or she will lose everything.
so it is far more dangerous than a bank account!! (at least you get your 35k back!)
in addition we know that all the savings accounts will be shielded by the government
so forget the "safety" of the bricks & mortar
11. Azazel said...
I am also concerned about having my savings in a bank. I recently sold my house and now waiting for the fireworks to begin. Although I could have got a better rate i have chosen to put in a Nationwide account. Nationwide is more stable than most of the others, do you think?
12. down wave said...
dohousescrashinthewoods. Thank you, you are absolutely correct. Truth,ethics, steadfastness, fortitude are today swear words. One switches on the TV and only observes F this and F that, spin an lies. You can put a gun to my head and I will not compromise myself for money, sex and definetly not for truth. There are a lot of sensible men and women posting on this site and yet again, I see estate agents and buy to let'ers covertly trying to discredit it for their own agenda's. I know who they are. I am an expert in personality profiling.