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Kosmin

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  1. Why do you consider that representative? I haven't heard the same sentiments from those I've spoken to. Why bearing does average intelligence have on the quality of the top, selective institutions? Do you think the average person in Oxfordshire or Cambridgeshire is particularly intelligent? The University of Auckland is in the top 100 world universities, higher than many UK universities. https://www.topuniversities.com/university-rankings/world-university-rankings/2020 If they have the opportunity to go to Oxbridge then it may be worth pursuing, but if they just have offers from Russell Group, is there really likely to be a significant difference between the best in New Zealand?
  2. It depends on the tax rate and the threshold, but it's not likely for this to happen. Do house prices crash when people die and sell their houses to pay inheritance tax? Consider the wealth tax proposed by Warren (2% on assets from $50m to $1bn, and 6% on assets over $1bn). So a household with wealth of $100m would effectively pay 1%, $1bn it would be 1.9% and at $2bn it would be 3.95%. At these rates it's unlikely households would liquidate assets to pay the bill, as they could pay most or all of it out of dividend income. Households paying close to 6% would sell some of their assets, but interestingly they do this already. Jeff Bezos sells $1bn of Amazon stock each year to invest in Blue Origin. It doesn't crash the market. If Bezos, Zuckerberg, Gates, the Waltons and other super-wealthy households had to sell several billion of their respective holdings each year it might not do much to their share prices. It certainly wouldn't be a crash (they wouldn't wait until the tax was due before trying to sell billions of stock at once, they would sell $10-20m per day), but perhaps a slight downward pressure (it's not obvious that prices would have fallen in aggregate due to all the other factors pushing asset prices up). If there was downward pressure on asset prices, would that be a bad thing? If a LVT or other property prices lowered house prices that would be considered good (the point is that the current taxation system incentivises people to buy large properties even if they don't use most of them, because there are very low taxes on ownership). High house prices are harmful to all by a tiny minority with excessively speculative exposure to property. Are other assets different? (Isn't it generally accepted that asset prices are absurdly high, largely due to extreme monetary policy? So if another policy counteracts this, isn't that likely a good thing?) I saw someone argue that a wealth tax would be bad because rich people would sell equities causing their prices to fall and middle class people would see the value of their savings fall (particularly their pensions). If this did happen, would that actually be bad? It would mean that savers would have higher long term returns going forward. It shouldn't be a problem for savers approaching retirement, as they would tend to have switched to safer investments. Additionally what is the tax going to pay for? Warren's wealth tax was envisioned to pay for universal healthcare. If a middle class American no longer has to be pay $10,000 annual health insurance premiums they won't mind if stock portfolio takes a small hit. Similarly I realise that a wealth tax on HNW households could have some negative impact on the middle class, it's likely that they would benefit from the government spending it funded.
  3. I just used that as an example because it was topical. I perhaps should have said if you need, for a personal emergency, some money in a hurry, it's easy to sell shares instantly and settlement should take less than a week. Selling a house takes months. We actually don't know that Ebola wasn't the right time to sell. Say a landlord bought several years before Ebola and was sitting on a big capital gain and was scared that Ebola was going to turn his gain into a big loss. Obviously that turned out to be wrong, because Ebola didn't become a pandemic. But we don't know that the coronavirus won't have such a big impact that it wipes out his gain as he feared Ebola would. I do take your point that people often do have an impulse to sell as they think some terrible piece of news is going to cause a crash. But if this makes property superior to shares (because you can wish you could sell your BTL in a hurry, but you realise you can't, so you just try to put bad news out of your mind, whereas you might sell your shares), then shares in a pension are even more superior (assuming you are still several years from being able to access your pension). My point has nothing to do with hindsight. Housebuilder shares are a lot more volatile than house prices. They will provide higher returns than property. If property provides returns in the long run, equities will provide higher returns. If you time if right you will earn higher returns in either, but highest in equities. They fall further when prices fall and they rise higher when prices rise. Persimmon was £3 in 2001, £14 in 2008, £4 in 2008, £33 in February and £22 now. Barratt Developments £2, £8, 60p, £8, £5. That's why you diversify. Low returns on British Land pale in comparison to the enormous gains you'd make from holding other equities. Furthermore you keep buying whenever you have new cashflow, so the importance of market timing is reduced. There is no way of doing this with property. Is dollar cost averaging in index funds difficult? (If you buy a sensible index fund you will beat the majority of professionals! Easy!) I gave the example of buying housebuilders after a crash as advice to someone who was considering buying a BTL after a crash. Perhaps I should have been more explicit: "If you are convinced that house prices represent good value after a big fall, I would recommend at that point buying the similarly good value housebuilder shares instead. You might be wrong about your timing. But the expected return of your risk-adjusted investment in shares is higher and has other benefits such as liquid and greater ability to avoid tax. So the net return is even more higher than the gross return, which is what matters."
  4. In that scenario other housing related investment strategies might be better. For example, buy shares of housebuilders and related sectors. These have big advantages over BTL. They will probably provide higher returns and you will pay less tax and fees on them. Also if you know when to sell you can do so. If you knew it was time to sell in January when you first heard about the coronavirus, you wouldn't have been able to sell a house before March but you could have sold your shares that day.
  5. It's a weird article. He doesn't consider the possibility the pension policy may change in the future. He doesn't acknowledge that the young today are already going to start drawing their state pension later (at least 68, but possibly older). He doesn't acknowledge the possibility that demographic and economic changes might make pensions and healthcare costs increase significantly. He doesn't consider where the money will be transferred instead if the triple lock is removed. He makes the error of only comparing the young and old as pensioners! OK, young people might receive lower pensions in the 2050s onwards, but they will be beneficiaries of this money be transferred elsewhere (overall they will be better off even if their future pension income is lower)! Whereas current pensioners will lose out on the next few years of the triple lock and as they are nearing the end of life, they have less opportunity to benefit from the alternative uses of this money. He refers to the "principle of the triple lock" but is there a principle? (It seems to me as unfair and indefensible as stamp duty) Why should the state pension increase by a minimum of 2.5%? I think the most sensible policy would be to move it in line with average earnings. If pensions are too low, they should be increased. Once they are high enough they should rise in line with salaries.
  6. Why not tax property wealth? Higher tax (there is currently council tax, but this is quite low as a proportion of high value properties) for owning more valuable property would incentivise downsizing. If you want to tax people who benefit from property wealth, you catch all of them with property wealth taxes. If you want to encourage efficient use of properties, property wealth taxes are much better than stamp duty. Stamp duty not only gives many wealthy property owners the choice of not paying by not moving. It penalises people who move (people who get a job in another region, who need a bigger house and can't build an extension, etc.). A land value tax is probably the best option, though it could also be based on property value. Is there any justification for stamp duty (aside from the surcharge for second properties, which should be much higher than 3%)?
  7. They have much more effective propaganda downplaying the risks than we do and they have much less support for those who couldn't work. So people had to try to find work. The only uncertainty was whether the demand existed to support employment.
  8. The US unemployment rate which was expected to surge to a record 19.1% in May from 14.7% in April, actually declined in May to 13.3% and dropped further to 11.1% in June, far better than the 12.5% expected.
  9. I think that's quite a small minority of women, but surely it's a significantly smaller proportion of men. In an average marriage the man is older than the woman (the actuarial assumption is usually two or four years). So the man will typically have accumulated more wealth. Several generations ago, the expectation that men would aim to be sole breadwinners (and that women would seek out good breadwinners) began to change quite rapidly. Now men and women can go through a marriage as economic equals, working the same amount and taking the same amount of time off to look after children. But in a lot of marriages the husband is the main breadwinner and the wife works less (either part-time, or full-time but with breaks for raising children). It seems that men who would like to sponge off women will have fewer opportunities.
  10. I'm not saying it's a great place. I think if it's is OK normally and other Western countries are great normally, it may be better as long as there is still a much greater risk and many more restrictions in other countries. Most universities either have everything on campus or most things are nearby. Most students spend most of their time on campus or in nearby student areas (in some places the local population resent students, in other places the non-student bars/clubs etc. are too expensive, most students mostly want to spend time with other students). I've only been to university in England, but I'm aware of similar dynamics in other countries. Flights are going likely to be difficult and risky for a while. You might fly somewhere for a weekend and then get quarantined for a fortnight. I think flying back to visit friends and family would be very difficult even within Europe.
  11. You said kiwis can't hold a conversation about anything except rugby and you call me condescending! The question isn't whether an 18 year old would want to go all over New Zealand (though incidentally many do go backpacking there), but whether he would want to go there for a more normal university experience. So if you actually have experience of New Zealand universities it would have been relevant.
  12. I wonder if this will still be the case in the coming academic year, or if a lot more German students will study in Germany, therefore reducing the number of places for foreign students.
  13. You said you went to university, but you seem confused about what hypothetical means. Your low opinion of New Zealand seems based on visits to your family out there. Is the area in which they live really representative of the universities and surrounding areas?
  14. What about the government actions before this? What if the government had taken steps to slow the spread of the virus several weeks earlier? Wouldn't that have had a much bigger impact?
  15. Are German universities open? Is Germany open? You speak German and could find rent-free accommodation?
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