What Would You Do?

[dannyblue]

I'm in an interesting and fortunate position. The decisions I make now could set me up for life, or set me back to square one. While partly being selfish and wanting free advice, it also seems my position poses some interesting questions about the direction of our economy and what that practically means, what individuals should do about it.

I have no dependents, and am not likely to in the next couple years.

I've just paid off my mortgage.

I've accepted an offer on my two-bedroom London flat (fingers crossed).

I have substantial savings, largely in cash and non-sterling government bonds.

I'm about to be made redundant (which I've been playing for and is very welcome - I strongly dislike my job)

I don't want to stay in my industry so am unlikely to get another job quickly.

In other words, after 10 years of hard(ish) work, by the end of August I should be homeless, unemployed, debt free and cash rich.

My thinking has been...

The economy is bad, I don't see the green shoots, we're massively in debt both as a country and individuals, we're printing money even thought the CPI hasn't decreased beyond the target band - inflation is on the horizon.

The worst thing to have when there's inflation is cash. In which case I should spend my cash on an asset, which should maintain its real value even with inflation. And, ideally, I'd spend my cash on an asset I could use.

Yet houses are still over priced: The average person on £25k can't get near to affording the average house of £150k, and it'll get worse with more job losses coming.

While I expect property prices to go down, I expect them to go down less, in real terms, than cash and, at the same time, I need somewhere to live.

So my plan is to spend pretty much all of my cash on a nice property to live in, and, potentially, with space I may be able to let out to provide me an income to cover bills and food.

What would you do? (I don't want to live on a beach in the third world! Well, not for more than a month or so)

[Guest Skinty]

cash could well be king.and you could well end up paying council tax on empty units,using your decreasing equity to leverage up at the bank

There's still plenty of time to wait and see what happens, inflation or deflation. Although the OP is about to be made redundant and therefore being cash rich means that he will not be eligible for Job seeker's allowance. And he still has to live somewhere.

Personally if it was me, I would get a more pleasant job in a nicer and cheaper part of the country and take my time in deciding what to do with the cash.

[Guest DissipatedYouthIsValuable]

Is there an immutable law that those with most money have the least imagination in how to spend it?

[AteMoose]

Plenty of time to wait and see, you will feel inflation before it hits large assets.... Wait and buy as inflation picks up, if you have the nerve to hold cash/trust the gov to bail you out if banks go under.

[Laura]

And he still has to live somewhere.

Personally if it was me, I would get a more pleasant job in a nicer and cheaper part of the country and take my time in deciding what to do with the cash.

He could live in a cheap camper without hassle, once he crosses La Manche. The savings are considerable, & the lifestyle in a different league IMHO.

Have I mentioned this option before?

[General Melchett]

He could live in a cheap camper without hassle, once he crosses La Manche. The savings are considerable, & the lifestyle in a different league IMHO.

Have I mentioned this option before?

You have.

Dont be surprised when 800-odd weirdoes show up on your doorstep in clapped out hippie buses.

[24gray24]

My tuppence worth: You will get another job offer in your industry if you make any applications. (Mainly because you don't want it). Take it.

Since you don't know what to do next, don't do it; it won't happen or work out anyway, you're simply not prepared. Sit tight in your new job, rent (don't sign more than a six month contract) (or better yet, move into a slum weekly hotel) and enjoy the view from the top. PM physical (why take any risk?). Avoid women with debts.

Only quit when your hobby job is so busy that you can't get in to work.

[Neverland]

I'm in an interesting and fortunate position. The decisions I make now could set me up for life, or set me back to square one. While partly being selfish and wanting free advice, it also seems my position poses some interesting questions about the direction of our economy and what that practically means, what individuals should do about it.

I have no dependents, and am not likely to in the next couple years.

I've just paid off my mortgage.

I've accepted an offer on my two-bedroom London flat (fingers crossed).

I have substantial savings, largely in cash and non-sterling government bonds.

I'm about to be made redundant (which I've been playing for and is very welcome - I strongly dislike my job)

I don't want to stay in my industry so am unlikely to get another job quickly.

In other words, after 10 years of hard(ish) work, by the end of August I should be homeless, unemployed, debt free and cash rich.

Methinks DannyBlue used to work in the finance industry...

But anyway, why not travel around the world for a bit, maybe 3-6 months

Its not impossible you might find somewhere nicer to spend your time than London

At the moment you do sound like a bit of a sad sack [sorry, but its true....]

[Guest X-QUORK]

Do something useful for others for a while, working for a charity at home or abroad. Voluntary work won't make you any richer financially, but it sounds like you don't need to worry on that score. When you come back to earn a crust again, your CV will be considerably enhanced.

[Laura]

You have.

Dont be surprised when 800-odd weirdoes show up on your doorstep in clapped out hippie buses.

Unlikely as even the National Guard get lost around here.

By invitation only

Who wants a tax attracting slave box with no elbow room in, or out?

[Jim B.]

Do something useful for others for a while, working for a charity at home or abroad. Voluntary work won't make you any richer financially, but it sounds like you don't need to worry on that score. When you come back to earn a crust again, your CV will be considerably enhanced.

Yes.

I would buy a cheap property somewhere nice where I wanted to live, so my overheads were small, and get a little part-time job to pay the bill and spend the rest of the time doing something creative or working for a charity.

[Telometer]

My tuppence worth: You will get another job offer in your industry if you make any applications. (Mainly because you don't want it). Take it.

Since you don't know what to do next, don't do it; it won't happen or work out anyway, you're simply not prepared. Sit tight in your new job, rent (don't sign more than a six month contract) (or better yet, move into a slum weekly hotel) and enjoy the view from the top. PM physical (why take any risk?). Avoid women with debts.

Only quit when your hobby job is so busy that you can't get in to work.

Agreed. Why do nothing when you've got no idea what to do with the time?

[Laura]

I would buy a cheap property somewhere nice where I wanted to live, so my overheads were small,

and get a little part-time job to pay the bill and spend the rest of the time doing something creative or working for a charity.

Add in clean fingernails, a nice suit; & a happy contented bunny is the result?

Your home planet is?

[Bloo Loo]

Add in clean fingernails, a nice suit; & a happy contented bunny is the result?

Your home planet is?

cucumber carving for pleasure.

[abharrisson]

I'm in an interesting and fortunate position. The decisions I make now could set me up for life, or set me back to square one. While partly being selfish and wanting free advice, it also seems my position poses some interesting questions about the direction of our economy and what that practically means, what individuals should do about it.

I have no dependents, and am not likely to in the next couple years.

I've just paid off my mortgage.

I've accepted an offer on my two-bedroom London flat (fingers crossed).

I have substantial savings, largely in cash and non-sterling government bonds.

I'm about to be made redundant (which I've been playing for and is very welcome - I strongly dislike my job)

I don't want to stay in my industry so am unlikely to get another job quickly.

In other words, after 10 years of hard(ish) work, by the end of August I should be homeless, unemployed, debt free and cash rich.

My thinking has been...

The economy is bad, I don't see the green shoots, we're massively in debt both as a country and individuals, we're printing money even thought the CPI hasn't decreased beyond the target band - inflation is on the horizon.

The worst thing to have when there's inflation is cash. In which case I should spend my cash on an asset, which should maintain its real value even with inflation. And, ideally, I'd spend my cash on an asset I could use.

Yet houses are still over priced: The average person on £25k can't get near to affording the average house of £150k, and it'll get worse with more job losses coming.

While I expect property prices to go down, I expect them to go down less, in real terms, than cash and, at the same time, I need somewhere to live.

So my plan is to spend pretty much all of my cash on a nice property to live in, and, potentially, with space I may be able to let out to provide me an income to cover bills and food.

What would you do? (I don't want to live on a beach in the third world! Well, not for more than a month or so)

Depending on the size of your savings I would :

1/ Buy a business ( if you have a lot of cash then i'd go more lifestyle perhaps).... there are some good little business around for sale and prices have dropped considerably. Against a good business banks will lend maybe 50% and getting the vendor to part fund the purchase is much much easier now...... depending on what you want you can buy a business making say £200k net profit and end up paying off the purchase price within five years while at the same paying yourself a stipend..... you'll need to take some risk, but its much less these days.

2/ I would go on hols, maybe for six months though prior to making any decisions.. things are unlikely to improve prior to then.

3/ On the basis you'll be in hols for six months I wouldn't think of buying until you come back as the markets hardly likely to rise, and you never know prices may fall to the degree you have had your hols effectively for free.

4/ I 'd keep my money in sterling if you plan to continue to live here.

[Guest anorthosite]

Spent it on:

After all, you could get run over by a bus tomorrow.

[grizzly bear]

While I expect property prices to go down, I expect them to go down less, in real terms, than cash and, at the same time, I need somewhere to live.

So my plan is to spend pretty much all of my cash on a nice property to live in, and, potentially, with space I may be able to let out to provide me an income to cover bills and food.

What would you do?

Well I don't see too much prospect of wage inflation in the medium term so I am not sure about your theory. Further there are lots of accidental landlords around and as some on this forum have pointed out getting a tennant is not as easy as it was.

So if you want to spend all your money on a depreciating asset, with no guarantee of any reasonable sort of return, then go ahead!

[tim123]

What would you do? (I don't want to live on a beach in the third world! Well, not for more than a month or so)

I'm in exactly the same position as you (have been since Christmas),

I'm renting the smallest property that my stuff will fit in, in a relatively low cost area.

I'm waiting to see what house prices do.

tim

[Gigantic Purple Slug]

vegas baby, vegas.

[dannyblue]

Thank you everyone. Consensus seems to be don't rush back in yet.

Not sure what 'OB' or 'PM' are, but will read more HPC and learn I'm sure.

Big plans about what to do with my time, and they don't need the money beyond keeping me fed, watered and sheltered...came on here interested in housing, savings and investment opinions.

As will no doubt delight a few, my sale fell through this morning and I don't know why yet, so I'm staying put for now. It's the third offer that's fallen through: the first one ended up not being able to get the mortgage they thought they could get, the second one got made redundant the week after I accepted the offer.

[blue skies]

I'm in an interesting and fortunate position. The decisions I make now could set me up for life, or set me back to square one. While partly being selfish and wanting free advice, it also seems my position poses some interesting questions about the direction of our economy and what that practically means, what individuals should do about it.

I have no dependents, and am not likely to in the next couple years.

I've just paid off my mortgage.

I've accepted an offer on my two-bedroom London flat (fingers crossed).

I have substantial savings, largely in cash and non-sterling government bonds.

I'm about to be made redundant (which I've been playing for and is very welcome - I strongly dislike my job)

I don't want to stay in my industry so am unlikely to get another job quickly.

In other words, after 10 years of hard(ish) work, by the end of August I should be homeless, unemployed, debt free and cash rich.

My thinking has been...

The economy is bad, I don't see the green shoots, we're massively in debt both as a country and individuals, we're printing money even thought the CPI hasn't decreased beyond the target band - inflation is on the horizon.

The worst thing to have when there's inflation is cash. In which case I should spend my cash on an asset, which should maintain its real value even with inflation. And, ideally, I'd spend my cash on an asset I could use.

Yet houses are still over priced: The average person on £25k can't get near to affording the average house of £150k, and it'll get worse with more job losses coming.

While I expect property prices to go down, I expect them to go down less, in real terms, than cash and, at the same time, I need somewhere to live.

So my plan is to spend pretty much all of my cash on a nice property to live in, and, potentially, with space I may be able to let out to provide me an income to cover bills and food.

What would you do? (I don't want to live on a beach in the third world! Well, not for more than a month or so)

All asset classes will suffer, the trick is to invest in the one that suffers the least. Right now Iam gessing holding cash will loose you the least amount. You cant get the dole with the sort of money you have, so it may be a answer to buy the best house you can aford and put your hand out for the dole , the way things are going it may be years before you get a job if thats what you want?

[Neverland]

[...]

As will no doubt delight a few, my sale fell through this morning and I don't know why yet, so I'm staying put for now. It's the third offer that's fallen through: the first one ended up not being able to get the mortgage they thought they could get, the second one got made redundant the week after I accepted the offer.

Do you think you are unusually unlucky or have you been trying to sell for a long time?

Three times seems like a lot...

[dannyblue]

Do you think you are unusually unlucky or have you been trying to sell for a long time?

Three times seems like a lot...

It's been on the market for 3 months. First two offers took about about five weeks to come, with about 4-5 viewings per week. They fell through, I then had only 2 viewings in next 4 weeks, the second of which became the third offer, which has been proceeding for a couple weeks before collapsing this morning. The buyer getting made redundant was just bad luck (and worse for her than me), the buyer who couldn't get the mortgage in the end basically couldn't afford it and shouldn't have made the offer in the first place so was just naive / a time waster. Turns out this offer fell through as the sale on a flat they'd missed out on collapsed, so they're going back for that, although dressing it up with conerns about the service charge level (although they knew that from the start). So...it's a popular place for FTBs and so there's been a good amount of interest, and I just think I've been unlucky. May change my mind if it happens again! If it hadn't valued up for the mortgage I'd have been more concerned...

[Neverland]

It's been on the market for 3 months. First two offers took about about five weeks to come, with about 4-5 viewings per week. They fell through, I then had only 2 viewings in next 4 weeks, the second of which became the third offer, which has been proceeding for a couple weeks before collapsing this morning. The buyer getting made redundant was just bad luck (and worse for her than me), the buyer who couldn't get the mortgage in the end basically couldn't afford it and shouldn't have made the offer in the first place so was just naive / a time waster. Turns out this offer fell through as the sale on a flat they'd missed out on collapsed, so they're going back for that, although dressing it up with conerns about the service charge level (although they knew that from the start). So...it's a popular place for FTBs and so there's been a good amount of interest, and I just think I've been unlucky. May change my mind if it happens again! If it hadn't valued up for the mortgage I'd have been more concerned...

Thanks

Souns like it might take time to get another offer anyway

[Stop The Ride]

Is there an immutable law that those with most money have the least imagination in how to spend it?

Yes. Otherwise they would have spent it on something really really good.