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andrew_uk

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  1. I’m resurrecting my first ever post from 2004 so six years ago. My point at the time was to try to show the public opinion of the time and then update it every 12-18 months. You may or may not find it interesting but in 2004 we were in the grip of the housing boom. Unfortunately my first ever post has been deleted and in case others start getting removed due to age I’ve started again. I’ve included an update including all of them I could find. The original start at http://www.housepricecrash.co.uk/forum/index.php?showtopic=3141&st=0 I’ve tried to highlight the most interesting points 2004 post (now deleted) It started after I sold my house. I’d brought it in 2000 for the princely sum of £39,950 and sold it in Sept 2004 for £86,000. I know some monetary history hence my statement at the time was: <quote> For the record I gained 110% on my house in 4 years, with a 95% mortgage so with 20/1 gearing I got a 1,100% increase on investment. I know that should be impossible since growth + inflation = ~4% a year. I worked out that if I could maintain that gearing, impossible I know but the rest is the same, after 20 years I could buy everything in britain (58 trillion), after 23 years everything in the world 1 zillion (or whatever comes after trillion). By 107 year I have more pounds then there are atoms in the universe. I think the growth in house prices at least in my area are unrealistic. </quote> At the time people with no investment experience such as my sister and best friend were talking to me about getting into buy to let. The view was if you had enough cash or could get credit it was a license to get into BTL and print money. The only property porn program I watched was Sarah Beenies. 90% of them were newbies who made massive mistakes but still made a fortune due to the raising market. Generally along the lines of buy for 150K, budget 30K for improvements and sell for 210K. It’d end up costing 90K and take 9 months not 9 weeks but they’d sell it eventually for 300K and make a 60K profit. Second post July 2006 Time for an update on my first ever post (remember 18 months have passed): People called me an idiot for selling: +Friends&Familly now say I sold at the right time and I wasn't an idiot (I still have ceiling price on the road) + They believe prices are lower now (maybe regional) especially nice detached houses - They think that since the top end houses have fallen & the market is full of them I should consider buying in the next year or two. The media: + It's changed a lot, the number of housing programs has dropped, property ladder especially has changed. + I actually see articles talking about possible house price falls + Halifax stated house prices fell 1.2% (Lots of people around me noticed this, i ignored it) - We haven't yet seen the phrase "Crash" used by a newspaper for a prominant article. Main stream financial news (credit crunch): + I keep seeing articles about debt levels being too high + People are telling me they wish they didn't have so much debt (and point out it could've been avoided) - The credit is still available and self cert/high risk mortgages are still available. Financial - Investment: + The price of gold/oil is up a lot (gold ~50%, oil ~40% averaged out) + People who I mentioned a possible recession to last year are now telling me about it as if it's there idea - The media is still bullish and everyone thinks they deserve to make big bucks meaning money is still flowing in. My Personal view: + I'm happy I sold the house and happy I recently sold my sports car (My inflation hedge last year lol) + I didn't miss out on a 20% rise in the house I sold - I think another 3-5 years before buying a house is a good idea. ------------------------------------------------------------------------------------------------------- August 2006 Interest rates (reply to a post) for continuity But some long run views on IR's: 1 year before my first post (boom times around me) - 3.5% First post IR - 4.75% 18mths later - 4.5% Today - 4.75% But historically we track global interest rates especially America's. From my first post to today there rate has gone from 1.75% to 5.25% and if America can raise rates by 4.5% over 23 months we could do the same. But as I said IR's are only a small part of the story ------------------------------------------------------------------------------------------------------- August 2006 How to know the bubble has burst (reply to a post) Hi Immigrant, How long? I expect a front page newspaper article in a tabloid announcing "house prices fall for the second month" followed by a graph in the paper showing annual price increases have gone negative in 2007. My biggest problem is the amount of statistics and VI spin as they might wait until 2008 and then post articles that prices had collapsed in 2007 and are now increasing again. [Edit hasn't something similar to this happened in the last 6 months?] The Irish Bubble This is much larger than the British bubble and will fall later, faster and further. From an outsiders point of view it seems more like a ponza scheme than a bubble. I might be wrong but I thought that the older generation was taking out equity to part fund purchases for the younger generation (there sons & daughters). This means money from the top of the pyramid flowing back to the bottom very very dangerous. A quote from george orwells 1984 "the system will eat itself". Why is my faith so unshakable? 1) Self interest/Greed Basically if a crash occurs it's good for me so it's much easier for me to believe this will happen. Any Bear who doesn't realise this is fooling themselves. I'm worse than most since I'm STR and hope to make money on the way up and then buy cheaply on the way down. 2) the dot com boom I did a long post about this elsewhere HP boom V .Com boom but basically I've seen and felt this euphoria before. It cost me money to learn that just because everyone's in the same boat doesn't mean the boat won't sink. 3) Historical graphs Average price to average earnings is a particularty strong argument to me. I just don't think it's different this time. "Those who do not learn from history are doomed to repeat it". 4) Personal observations I've seen credit go crazy. People on half my salary with brand new cars, going on holiday 3 times a year, buying plasma screen Tv's, new kitchens and assorted other stuff. There view of organising finances is getting a consolidation loan with enough left over for a holiday. Now I'm seeing people talk about how they don't have any money (cards maxed or wisely stopped using them). I've seen more recently (last 6 mths) people getting worried and counting up the debts. But the main 100% definate reason for prices to fall is drum roll............... Everyone said they couldn't imagine prices falling! Extra: As implied by others inflation can have a factor but in my view after a lot of analysis and thought I believe we are ultimately heading towards deflation not inflation. Through a short inflationary period (in commodities rather than housing or shares) might occur first. Look on GEI for more details as I posted there and Dr Bubb put up a roadmap which also ended in deflation. ------------------------------------------------------------------------------------------------------- Third post March 2007 Time for a second update on my first ever post First post - November 2004 First Update - August 2006 (18 months later) This update - March 2007 (25 months later or 7 months since the last) I hope people realise from this just how slowly a housing market changes. In a little over two years a lot has changed. My notes below compare to 2004. People called me an idiot for selling (Nov 2004): +Where I rent is a palace and so much better than anything I ever expected to live in. The general view is I've done very very well. +A few friends have recently put there houses up for sale as they think it's topped out. +Heaps of anecdotal stories from friends telling me they think a recession is coming (I told lots of them this 9 months ago). +Friends&Familly now say I sold at the right time and I wasn't an idiot (I still have ceiling price on the road) -People are telling me I could've waited longer to sell and made more. The media: + I'm actually reading articles that mention a recession, a slump in America and that house prices could fall. Such a change. - We haven't yet seen the phrase "Crash" used by a newspaper for a prominant article. Main stream financial news (credit crunch): + Debt levels are being talked about as a problem. + The CPI measure is being attacked as not reflecting the true cost of living. + People have stopped talking about debt but also don't talk about buying things anymore. + A few friends have taken out big re-mortgages not to spend but to clear all other debt and put away for a rainy day. - The credit is still available but getting more expensive and BTL mortgages are demanding higher deposits/fees. Financial - Investment: + The price of gold/oil has gone up and doesn't look as if it's coming down ever (no more $30 oil or $300 gold). + People who I mentioned a possible recession to last year are now telling me they are seeing the evidence (falling activity/order books) + The media has lost it's bullish stance and are talking about the carry trade unwinding/recessions. My Personal view: + I don't monitor house prices anymore and haven't posted on here for months as I don't care what happens since I'm safe. + I'm now certain a crash is coming but it might be 2008 before it really hits. - I think it'll be another 5-7 years before buying a house is a good idea (it's gonna be worse than I'd originally expected) Interest rates: Up from 4.75% to 5.25% and expected to keep rising. Note 1 yr before my first post they where 3.5%. A 50% increase in 3 years. I'm gonna keep renting and basically not caring about house prices, investments or anything like that. I'm debt free, have cash/gold as savings and just ignore house prices. I am considering reducing my pension contributions for a few years and saving the cash to use later. ------------------------------------------------------------------------------------------------------- Fourth post July 2007 (Earlier than normal) People called me an idiot for selling (Nov 2004): +It was honestly the best move I have ever made and gave me great joy to be out of a shit hole in a bad area and renting in a palace. +Lots of people are stressed about housing and are jealous of the fact I have zero stress about housing. -I no longer have ceiling price on my street. The people who bought my house sold it in 2007 for 3 grand more. Nothing else has sold. I'm still glad I sold as I now know i did not miss out on the supposed 20% increase in house prices after I sold it. The media: +I read articles about house prices falling, BTL in particular flats being a bad idea and the whole housing being a one way bet has ended. +I see much much less property porn on TV. It used to be none stop. +I saw a newspaper article that had 'house price crash' as the lead on the front page and this was a few months ago. Main stream financial news (credit crunch): + Debt levels are being talked about but not a flood of stories, I think that is to come. + There are not major job losses but they have definately increased and the athmosphere has turned from prosperity to holding on. + Inflation is high and not falling to 2%. + America seems in trouble and I don't yet know how this will play out. + Credit is definitely drying up, I've seen a lot of talk about charging for banking. Financial - Investment: + Lots of people are talking about recession & redundancy. the big cash wins from speculating are drying up - the yen carry trade is continuing but for other currencies My Personal view: + I still plan to buy but in 2-3 years at least as everyone I know who's trying to sell is having problems so I'm waiting for fire sale prices. I stlll don't monitor house prices as life is too short for that and I'm safe as I am. Interest rates: Up from 5.25% to 5.75% and expected to hit 6% in the media which means expect 7% they are going to start biting hard. Note 1 yr before my first post they where 3.5%. A 100% increase in 4 years which for those taking out 5 year fixes are 3.5% must be a scary thought ------------------------------------------------------------------------------------------------------- A post from a bull (nick22abdn) and they had a point, I just didn’t want to invest in property I love reading the occasional old post - shows how much has changed. Maybe selling your property in 2004 was a good idea for your area but you really can't say that your money would not have been better invested wisely in property. Take Aberdeen, you could have bought a one bed flat for about 40k, now selling for 100k. Rental market has had a severe shortage of one beds for the last few years - all have been rented inside a week, currently achieving 525 pcm. That would be a 15% yield in the last year. If you put a 20% deposit down you would have seen a 750% return on your money. You could easily have bought 2 flats, investing 16k and making 120k. Don’t harp on about how clever you were to have STR in 2004. You may have made the right call by selling in your area, but made a severe mistake not reinvesting this in a higher growth area for the last 3 years ------------------------------------------------------------------------------------------------------- Another update People called me an idiot for selling (Nov 2004): • I'm still so glad I sold as my standard of accomodation has been so much higher. Presently paying £595/month in a 197K apartment that is better than anything I ever dreamed of living in (In my area a 4 bed detached is 160K). Next door are 6 new bulids almost finished for sale at 1/2 million. • People only ask me when I plan to buy but most avoid the whole housing subject. The media: • It's become negative with talk about annual price falls but property gets much less column inchs now.Have noticed a lot of articles about real inflation e.g. the price of a paper selected basket of goods going up 8-10%. • Property porn is a seldom used term and people have lost interest in those programs. • Overall they have become quiet rather than negative. Main stream financial news (credit crunch): • Lots of debt stories and the term credit crunch is often used. We're told we are now in one. • Not a lot of talk about job losses • Inflation is high and faith in government statistics has fallen considerably. • America seemed in trouble last update, now it's in trouble and trying to tell us it's almost out of it. • Credit is still available Financial - Investment: A minor crash happened but it was lightning quick. Gold went a little crazy but has gone down since Oil is up a lot but worse so is food. Talk about food riots in the papers is bad. not sure if the yen carry trade is still occuring as all financial companies seem to have had big losses. My Personal view: I still plan to buy but in 2-3 years (so 3-4 from last time) as buying seems daft at the moment. I think there are some fire sale prices out there but I just don't want to buy yet. I stlll don't monitor house prices or go on this forum as life is too short for that and I'm safe as I am. Interest rates: Down to 5% from 5.75%, all hints are expect them to stay pat and then go up but a recession feels imminent and at that point they should fall. This is the point we need 3.5% rates not in 2004, I can see the faults the central bank made now more clearly. I'm gonna keep renting and basically not caring about house prices, investments or anything like that. I'm debt free, have cash/gold as savings and just ignore house prices. I'm keeping my pension contributions going but they are going into mainly cash & 20% commodities at the moment and will do for a year or so as I'm worried about a more major crash. I hope all those bears who sold are doing fine and the bulls are getting some good fire sale price deals. ------------------------------------------------------------------------------------------------------- A reply from HPC guru in Feb 2007 I added as interesting. I STRd in December 2003. Top of the market ... almost. I think my house might have sold for more in Spring/Summer 2006 - other than that in 2004/5 it would have sold for 10% less than I got for it in 2003. Now I think if it sold - the market here just seems to be completely stagnant - it would go for 5% to 10% less than I sold for in 2003. I would freely admit that in 2006 - following the base rate cut in August 2005 and the market boom in Spring 2006 - I thought I'd made a mistake and that, somehow - against logic, the boom could continue. But it hasn't. The central bankers are idiots. If they had left interest rates alone in August 2005, the correction which was well under way would have continued for a year or two, property would have fallen gently back to more affordable levels, and we would have avoided a bust. Now I am much more worried about a recession and jobs than I am about house prices. ------------------------------------------------------------------------------------------------------- June 2008 – a reply from Dr Bubb, feel free to skip as he is a gold bug QUOTE (Who Knows @ Jun 5 2008, 10:19 AM) Now I only skim read the thread but as I have stated about 100 times. If you STR'd in 2003/4/5 and stuck the cash in a jam jar you are an idiot. If you had a strategy that allowed your STR fund to grow in proportion to the local market ( eg to within 20K of peak prices) then you are on to a winner. Simple. Absolutely true. And even 2001 was a great time to STR, provided you invested in Gold shares near the 2001 low. That's what I did. So one modestly-financed lower ground flat on an obscure street in Kensington, has been "traded up", to two portfolios: + 2/3rds: Mining and Resource shares which generated a 7-figure profit in 2007, + 1/3rd : Ten flats in Hong Kong, financed at less than 60% of value I laugh at all those idiots (here and on other sites), who said I must be upset at getting "priced out" of Kensington. The best of my HK flats are both worth more than the dump I sold-to-rent in Kensington in 2001. And that dump is losing money every day now, while my two portfolios rise. ------------------------------------------------------------------------------------------------------- The last ever reply and I think was some sort of con It is very unlikely that the prices will drop. Once the home prices go up, they tend to stay up the same or go higher. They rarely ever go down. John Beck's Free & Clear Real Estate System ------------------------------------------------------------------------------------------------------- Fifth post September 2010 This is the post when I copied my previous posts to this new post. The atmosphere is so very different. We are in a recession and talk is about a double dip, through nobody is saying that is definite. I almost feel that talking about house prices is worthless as the real issue is the recession. People losing jobs, 25% cuts in social services and the feeling that everything might not be ok in the world. But to continue the theme I’ll do an update based on property alone. People called me an idiot for selling (Nov 2004): • This is old news. I’ve kept the money I made from seeling and increase it by a little, basically inflation. The media: • Lots of doom and gloom last year but now back to which footballer shagged which pop star Main stream financial news (credit crunch): • We are in a recession; things are very bad in America. • Big problems with food inflation due to flooding in Russia and India hence emergency meeting by the UN. I wonder if this will develop into a major worldwide issue as we all have to eat. • Inflation is stubbornly high even with extremely low 0.5% interest rates. • PIIGS (Portugal, Ireland, Iceland, Greece and Spain) was big last year but currently talk is about Ireland having major issues and about more terrorism from Ireland expected. • Credit is no longer available unless you don’t need it. Some investor just bricked up the door to a bank in protest. Financial - Investment: Gold bugs are laughing as gold > $1,000 I think around $1,200 at the moment. Since a big stock market crash everything has gone stable for the moment my gut feeling is another crash a la 1930 might be coming. But unwilling to move investments to take advantage as not that sure. My Personal view: Some people are struggling but could be worse. At least there is no major war through the war on terror seems to have become a war on Afganistan (after Iraq fell) and there is talk about Iran too. Interest rates: 0.5% I believe. In 2004 they thought 0.5% interest rates would’ve tripled house prices in a year. How things change. Andrew
  2. Time to resurrect this old old post. As promised I plan to add to this post every 6-12 months to show a property boom & bust in slow motion. House prices are like an oil tanker slow to turn but once they do it takes a long time for them to turn again. This is my fourth update on my first ever post. First post - November 2004 First Update - August 2006 (18 months later) second update - March 2007 (25 months later or 7 months since the last) third update - July 2007 (29 months later or 4 months since the last) this update - June 2008 (40 months later or 11 months since the last) This is in sections that I started in 2004. I've removed the +/-'s and just commented. People called me an idiot for selling (Nov 2004): I'm still so glad I sold as my standard of accomodation has been so much higher. Presently paying £595/month in a 197K apartment that is better than anything I ever dreamed of living in (In my area a 4 bed detached is 160K). Next door are 6 new bulids almost finished for sale at 1/2 million. People only ask me when I plan to buy but most avoid the whole hosuing subject. The media: It's become negative with talk about annual price falls but property gets much less column inchs now.Have noticed a lot of articles about real inflation e.g. the price of a paper selected basket of goods going up 8-10%. Property porn is a seldom used term and people have lost interest in those programs. Overall they have become quiet rather than negative. Main stream financial news (credit crunch): Lots of debt stories and the term credit crunch is often used. We're told we are now in one. Not a lot of talk about job losses Inflation is high and faith in government statistics has fallen considerably. America seemed in trouble last update, now it's in trouble and trying to tell us it's almost out of it. Credit is still available Financial - Investment: A minor crash happened but it was lightning quick. Goldwent a little crazy but has gone down since Oil is up a lot but worse so is food. Talk about food riots in the papers is bad. not sure if the yen carry trade is still occuring as all financial companies seem to have had big losses. My Personal view: I still plan to buy but in 2-3 years (so 3-4 from last time) as buying seems daft at the moment. I think there are some fire sale prices out there but I just don't want to buy yet. I stlll don't monitor house prices or go on this forum as life is too short for that and I'm safe as I am. Interest rates: Down to 5% from 5.75%, all hints are expect them to stay pat and then go up but a recession feels imminent and at that point they should fall. This is the point we need 3.5% rates not in 2004, I can see the faults the central bank made now more clearly. I'm gonna keep renting and basically not caring about house prices, investments or anything like that. I'm debt free, have cash/gold as savings and just ignore house prices. I'm keeping my pension contributions going but they are going into mainly cash & 20% commodities at the moment and will do for a year or so as I'm worried about a more major crash. I hope all those bears who sold are doing fine and the bulls are getting some good fire sale price deals.
  3. The point of this post is to give a long term perspective. In 2004 people truly could not imagine house prices falling. To say such a thing was ridiculed. People thought property was going to keep going up for the next ten, twenty, thirty years. I see articles about buying property for your children as if they must get a house now as otherwise they'll be stuck at home for ever (e.g. people assume that tomorrow will be much like today) I'm not trying to make out I was clever to sell in 2004 in fact I was a year early but having sold, rented and forgot about property it's much less stressful. But again the main point is that housing markets move very very slowly. I'd hope to keep adding to this topic all the way into 2010 and a full scale house price crash. Andrew
  4. Time for a third update on my first ever post, I haven't waited long this time but like an oil tanker turning once it starts to move it creates waves. First post - November 2004 First Update - August 2006 (18 months later) second update - March 2007 (25 months later or 7 months since the last) this update - July 2007 (29 months later) A housing bubble is slow to turn but I can now see the turn especially looking back to 2004 for inspiration. People called me an idiot for selling (Nov 2004): +It was honestly the best move I have ever made and gave me great joy to be out of a shit hole in a bad area and renting in a palace. +Lots of people are stressed about housing and are jealous of the fact I have zero stress about housing. -I no longer have ceiling price on my street. The people who bought my house sold it in 2007 for 3 grand more. Nothing else has sold. I'm still glad I sold as I now know i did not miss out on the supposed 20% increase in house prices after I sold it. The media: +I read articles about house prices falling, BTL in particular flats being a bad idea and the whole housing being a one way bet has ended. +I see much much less property porn on TV. It used to be none stop. +I saw a newspaper article that had 'house price crash' as the lead on the front page and this was a few months ago. Main stream financial news (credit crunch): + Debt levels are being talked about but not a flood of stories, I think that is to come. + There are not major job losses but they have definately increased and the athmosphere has turned from prosperity to holding on. + Inflation is high and not falling to 2%. + America seems in trouble and I don't yet know how this will play out. + Credit is definitely drying up, I've seen a lot of talk about charging for banking. Financial - Investment: + Lots of people are talking about recession & redundancy. the big cash wins from speculating are dryig up - the yen carry trade is continuing but for other currencies My Personal view: + I still plan to buy but in 2-3 years at least as everyone I know who's trying to sell is having problems so I'm waiting for fire sale prices. I stlll don't monitor house prices as life is too short for that and I'm safe as I am. Interest rates: Up from 5.25% to 5.75% and expected to hit 6% in the media which means expect 7% they are going to start biting hard. Note 1 yr before my first post they where 3.5%. A 100% increase in 4 years which for those taking out 5 year fixes are 3.5% must be a scary thought I'm gonna keep renting and basically not caring about house prices, investments or anything like that. I'm debt free, have cash/gold as savings and just ignore house prices. I'm keeping my pension contributions going but not keeping it in commodities and I'm saving cash to use later. I hope all those bears are starting to see the turn and realising that selling now is just too late to make any difference.
  5. Time for a second update on my first ever post First post - November 2004 First Update - August 2006 (18 months later) This update - March 2007 (25 months later or 7 months since the last) I hope people realise from this just how slowly a housing market changes. In a little over two years a lot has changed. My notes below compare to 2004. People called me an idiot for selling (Nov 2004): +Where I rent is a palace and so much better than anything I ever expected to live in. The general view is I've done very very well. +A few friends have recently put there houses up for sale as they think it's topped out. +Heaps of anecdotal stories from friends telling me they think a recession is coming (I told lots of them this 9 months ago). +Friends&Familly now say I sold at the right time and I wasn't an idiot (I still have ceiling price on the road) -People are telling me I could've waited longer to sell and made more. The media: + I'm actually reading articles that mention a recession, a slump in America and that house prices could fall. Such a change. - We haven't yet seen the phrase "Crash" used by a newspaper for a prominant article. Main stream financial news (credit crunch): + Debt levels are being talked about as a problem. + The CPI meassure is being attacked as not reflecting the true cost of living. + People have stopped talking about debt but also don't talk about buying things anymore. + A few friends have taken out big re-mortgages not to spend but to clear all other debt and put away for a rainy day. - The credit is still available but getting more expensive and BTL mortgages are demanding higher deposits/fees. Financial - Investment: + The price of gold/oil has gone up and doesn't look as if it's coming down ever (no more $30 oil or $300 gold). + People who I mentioned a possible recession to last year are now telling me they are seeing the evidence (falling activity/order books) + The media has lost it's bullish stance and are talking about the carry trade unwinding/recessions. My Personal view: + I don't monitor house prices anymore and haven't posted on here for months as I don't care what happens since I'm safe. + I'm now certain a crash is coming but it might be 2008 before it really hits. - I think it'll be another 5-7 years before buying a house is a good idea (it's gonna be worse than I'd originally expected) Interest rates: Up from 4.75% to 5.25% and expected to keep rising. Note 1 yr before my first post they where 3.5%. A 50% increase in 3 years. I'm gonna keep renting and basically not caring about house prices, investments or anything like that. I'm debt free, have cash/gold as savings and just ignore house prices. I am considering reducing my pension contributions for a few years and saving the cash to use later.
  6. Hi All, I thought I'd add an update. I now KNOW we are the same as the dot com boom. Where I work someone working at goods in on 12K was telling me about: His retirement/investment property in Indian (bought off plan and still not finished but he does have pictures of various stages of building) His investment property in Turkey (another off plan) And how he's lined up to invest in a complex of flats in Bulgaria. (off plan again) He's aiming for investments totalling 120K on a 12K salary managed by taking equity out of his own house. Best of all the investments aren't even built yet. But the clincher was his attitude. He had zero fear as he saw it as a one way bet. Why, simple because everyone else is doing it and many people are even jealous of how big an investment he's got. Yet when someone offered him a very high paid job helping to sell these investments he turned it down as it wasn't safe. Andrew
  7. I've always found the idea of no interest interesting. pardon the pun. My summary of the effects are: Wealth is more evenly distributed as the rich can't just sit back and make money. Investment and growth is stifled e.g. If your business is doing well you can't borrow to expand it Booms and busts are minimized (as is the economic cycle) Which explains why the middle east is economically more stable than europe but lags behind in growth. I know it was Mohammid who stated 'no interest' but I do wonder why. My thoughts are: 1) Against the jews As the jewish people were traditionally money lenders and profitable from it. 2) For the people Basically the concept of share the wealth. And avoiding people getting into debt. 3) The moral welfare of the people As it would be feasible to make a case for interest causing misery. Like the old saying that the colour of money is red not green since it cause such violence. My gut feeling is 1 with a hint of 3 but we'll never know for sure.
  8. This is a question for any muslim boad members or those with experience of the subject. What investments are allowed under islamic law? Is there a Sunni/Shia split. Or is it an individual decision. I ask this as I found a website arguing that some mutual funds/shares are allowed. They argued that halal companies that have cash assets that generate interest/use bank loans are allowed. The reason being you are a minority shareholder but demanding that you you oppose the interest related activities at the AGM and donate all profits attributable to interest to charity. I am also aware that the Saudi royal familly have extensive investments in shares. But then it all sounded a little dodgy to me. Also are inflation linked bonds allowed? Cheers, Andrew
  9. I'm glad you feel welcome, through watch out as we do have a few wacky types here who can get carried away. I'm guessing the religious requirement is no interest (Muslim).If so gold is definately a good form of investment through always try to keep a balanced portfolio of investments. Historically 10% gold through i'm going slightly higher than that buying in stages but don't go mad. This post has given me the incentive to post a question about this in the investment/main forum. If you willing i'd like to hear your views.
  10. I've rented many many many times both direct and agency. White and asian. My best ever landlord was asian. Really nice guy who let me leave (with no lose of rent or deposit) in a week even through I was supposed to give a months notice. My worst ever landlord was white. I lodged there, he worked away Mon-Fri. He was a complete tosser who thought i'd broken his cupboard in the kitchen. But it was more down to his abysmal diy skills than down to me. He'd always told me I'd get a months notice. Instead he gave me two weeks, that became 1 week that became be out before I return next Friday night. Luckilly I had a friend who I could stop at. Overall I prefer asian landlords or agency run whites. I dislike amateur white landlords even through you get quicker repairs. Andrew
  11. I think it would be useful to say where you are when you talk about salaries. I'd think that 45K in London is not a monster salary as the cost of accomodation, transport and general cost of living erodes a lot of that. but 45K up north (not in a city) would allow you to live like a king. Years ago I moved from 17K down south (Bracknell arghhh) to 21K in Leicester. It felt like I'd doubled my salary overnight.
  12. I'm guessing you never went to University. but if you did you'll see how your salary can accelerate. It's the difference between starting work at 16 or 22. My comparison (against friends who started work at 16). 16-18 Me - no income, part time jobs or beer money, no holidays Friend - £80/week, seemed loaded compared to me 19-22 Me - Student - low income helped with loans, lived frugally but had time so really enjoyed myself Friend - income rose upto about 12K/yr, he had no debts, a car, lots of spare cash compared to me 23-25 Me - first job at 13K/yr down south rising to 17K, transport/accomodation meant I was spending 18K/yr and already massively in debt Friend - income rose to 14K/yr but he had no debt and still had much more money than me 26-28 (The turning point) Me - Income rises rapidly from 17K-23K, moved to midlands - started paying back debts Friend - income rose with inflation and he started to fall behind me 29-onwards Me - income now high, debts repaid, I am now rich compared to my friend who wishes he had my income. Friend - looking for promotions but still way behind me. What I'm tryig to point out is that a good education will increase your earnings potential a lot but it comes at a price. If your just out of Uni it'll sort it self out over time. If not then you should've felt richer when younger and might now need to work hard to retrain unless your happy with a salary cap. Note: You can always work for yourself but this is a gamble and not a sure thing.
  13. I think you've got it bang on. Unless your a gambler (which is bad) keep it exactly as is. You even have a small allotment of gold as an inflation hedge. It's odd but in a different time I'd be saying you should put 30K in property. But since 30K gets nothing but the worrying property funds don't bother. I'd state two things to consider: 1) Add to your pension as a bulk sum. But only if you started your pension late and then only drip fed in over 6 years to the tune of 5K/yr. 2) A japanese index tracker. I've toyed with this myself but now feel the time to plunge in, is 2 years from now. Well done on the savings though i'm guessing you was an early BTLer who's got out or got a good inheritance.
  14. I think i can summarise in simple terms: Interest can be worked out in any number of wonderful mathematical ways and the banks abused this. This became a problem as we couldn't accurately compare savings accounts anymore. The solution created by the financial regulators is AER. It basically means that if you put in any money over a year you gain AER % more money. So if two banks have savings accounts you can ignore the interest rate and just compare AER. Obviously there is a relationship but 4.5% interest paid daily will have a higher AER than 5% interest paid at the end of the year. So look for the highest AER. On a side note you pay tax on the interest so interest free savings make a big difference but unfortunately that difference is not shown in the AER. If you don't have a cash ISA and wish to invest £3,000 I would advise the NS&I Direct ISA. note you can only put a maximum of £3,000 in each tax year (tax year = April 2006 to April 2007). Also APR is exactly the same as AER except it's the percentage interest you pay to borrow money. And exists for the same reason, so you can compare loans free from mathematical wizardry. It's sometimes interesting to see APR figures quoted for loan shark style credit it can end up being a 1000% APR. I hope this clears things up. Andrew PS I could've gone on about the math's behind it but really it's not that important anymore with the advent of AER and APR.
  15. Hi Immigrant, How long? I expect a front page newspaper article in a tabloid announcing "house prices fall for the second month" followed by a graph in the paper showing annual price increases have gone negative in 2007. My biggest problem is the amount of statistics and VI spin as they might wait until 2008 and then post articles that prices had collapsed in 2007 and are now increasing again. [Edit hasn't something similar to this happened in the last 6 months?] The Irish Bubble This is much larger than the British bubble and will fall later, faster and further. From an outsiders point of view it seems more like a ponza scheme than a bubble. I might be wrong but I thought that the older generation was taking out equity to part fund purchases for the younger generation (there sons & daughters). This means money from the top of the pyramid flowing back to the bottom very very dangerous. A quote from george orwells 1984 "the system will eat itself". Why is my faith so unshakable? 1) Self interest/Greed Basically if a crash occurs it's good for me so it's much easier for me to believe this will happen. Any Bear who doesn't realise this is fooling themselves. I'm worse than most since I'm STR and hope to make money on the way up and then buy cheaply on the way down. 2) the dot com boom I did a long post about this elsewhere HP boom V .Com boom but basically I've seen and felt this euphoria before. It cost me money to learn that just because everyone's in the same boat doesn't mean the boat won't sink. 3) Historical graphs Average price to average earnings is a particularty strong argument to me. I just don't think it's different this time. "Those who do not learn from history are doomed to repeat it". 4) Personal observations I've seen credit go crazy. People on half my salary with brand new cars, going on holiday 3 times a year, buying plasma screen Tv's, new kitchens and assorted other stuff. There view of organising finances is getting a consolidation loan with enough left over for a holiday. Now I'm seeing people talk about how they don't have any money (cards maxed or wisely stopped using them). I've seen more recently (last 6 mths) people getting worried and counting up the debts. But the main 100% definate reason for prices to fall is drum roll............... Everyone said they couldn't imagine prices falling! Extra: As implied by others inflation can have a factor but in my view after a lot of analysis and thought I believe we are ultimately heading towards deflation not inflation. Through a short inflationary period (in commodities rather than housing or shares) might occur first. Look on GEI for more details as I posted there and Dr Bubb put up a roadmap which also ended in deflation. Cheers, Andrew
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