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Nice post.

Not too sure I agree with the slowness of political change though - usually there are tipping points that alter everything seemingly in an instant...but I'd agree that the tipping points aren't going to happen tomorrow.

Bloody effing hell part II. Now Injin kind of agrees with Scepticus :o:o:o

'Good bye everyone - the world's gone a bit too topsy turvey for me' signed K.O. Johnny

Bang!

Blows brains out with revolver

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I'm glad I visited this site. Learned a lot. And I agree with an earlier post - the problem is people.

However it got to the point I was on here way too much and my negative thinking was really having an impact off-forum. So I rarely visit now - only to get the highlights.

I'm still a bit of a penny-pincher (though I've spent a bit more lately, life's for living) and like to keep in the back of my mind the state of things. I wont tell others, though. And I will never try to be ignorantly happy like others I know as I can see them being set up for a fall.

I'll stick to getting the highlights from here every now and then and trying to stay happy! :)

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Is there anything to be optimistic about? Is there anyone on here who takes a positive and optimistic view of the future. I'd like to hear those views - if it doesn't involve Mad Max scenarios.

I'm optimistic. I'm classed as a bear for the purposes of this site, but really I'm very bullish about the future in general, for myself and my family. I have taken steps to position myself and my family though for the changes that are likely, principally moving to an English and Chinese speaking country, which my circumstances allowed.

You must, for the sake of your sanity, separate and delineate the things you can control from the things you can't. You must also stop comparing your position to someone else's, or some model blueprint for how you think life should be. There is a freedom in knowing how insignificant we are in time and space, how what we do in this life doesn't really matter; who is to judge our lives?

However, it is important also to know how significant you can be to others and how you can make their lives better. Life goes on, people eat, drink, start families, make friends, give back to their community etc regardless of how well the wider economy is doing. We all live pretty comfortable lives compared to only a few generations ago.

This site on the whole deals with macro factors that bear little relation to how rewarding your day to day life can be. Real value comes from the small things. (I did a list, but pulled it, too corny.)

Don't sweat the big stuff.

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Are you for real? 'Trapped him into needing to earn decent money!' What are you talking about? I saw him on the box, in his own home, and it looks pretty damn ordinary to me. Why do you assume they've been living beyond their means for years. If buying a house on a mortgage means living beyond your means, then the majority of the people in this country are living beyond their means. What a bizarre statement.

Are you seriously denying that being in significant debt = being trapped into earning decent money? If it's not true then why has the guy got such a problem?

The bolded statement isn't bizarre at all: UK plc is living beyond its means, both the government and trade deficits show this clearly. Lots of us seem to think we have some god-given entitlement to keep doing so. One example of that is that our "pretty damn ordinary" houses would doubtless seem like palaces to many of those with whom we're competing nowadays (and who are kindly helping to fund our debt-habit with their surpluses).

What an idiot that bloke must be. All he's got to do is sell his house, get a job on minimum wage and buy a motor caravan. Problem solved.

If he was the kind of person who could do that, don't you think he'd be happier than you've portrayed him to be? Chances are he's incapable of letting go of what he has, because of his nature and/or circumstance. In which case I expect he'll carry on in his current groove, which from what you say hasn't worked out that well for him so far.

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You must, for the sake of your sanity, separate and delineate the things you can control from the things you can't. You must also stop comparing your position to someone else's, or some model blueprint for how you think life should be. There is a freedom in knowing how insignificant we are in time and space, how what we do in this life doesn't really matter; who is to judge our lives?

However, it is important also to know how significant you can be to others and how you can make their lives better. Life goes on, people eat, drink, start families, make friends, give back to their community etc regardless of how well the wider economy is doing. We all live pretty comfortable lives compared to only a few generations ago.

This site on the whole deals with macro factors that bear little relation to how rewarding your day to day life can be. Real value comes from the small things. (I did a list, but pulled it, too corny.)

Don't sweat the big stuff.

Great post.

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Well me and the partner have been living together for 4 years now, both finished Uni and landed decent jobs. We're not after anything huge, a small cosy 2 bedroomed place near some friends would be perfect. Right now we could probably bag somewhere for about ~130k. I'm hoping to pay ~100k in 2011.

Personally I think 22/23 is far too young to be settling down, but its your life not mine. Very best of luck with that!

We save about 15k a year and I plan on buying gold/silver with it until we purchase a house to safeguard the savings.

You are planning to put ALL of your savings into gold and silver? Is that not a little risky? Given that your savings are only going into a deposit for a house any account paying a reasonable amount of interest would do, as all you need to consider is the purchasing power of your deposit versus the house you want. In my view speculation is not necessary unless you have the money ear marked for something else. Gold can go down as well as up and can move swiftly and brutally in either direction.

We've been renting for a while now, and I'm not a fan of renting. It just feels like wasted money when I could be spending the same amount per month paying some mortgage interest and have the rest belong to me in bricks & mortar. However buying a house would lose me more money if the value dropped too much. Keep in mind I'm not allowed any pets, any of my own furniture, any of my own decorations. I can't even buy a new TV or computer because the furniture here cannot accommodate it. It's just not mine.

Fair points well made. Regarding your rented accommodation, why not go for an unfurnished place? Not all LLs are so irritating or fussy. It is a renters' market in many places - it might be worth looking around and/or negotiating with the LL.

I'm of the opinion however that house prices will crash 10-30% within the next 18-24 months and at some point in time begin a revival. What I aim to do is jump on the ladder with a smallish property, a low interest rate and a smallish mortgage. That way whatever happens I own a roof and it didn't cripple me with debt - that's the important part.

It may not happen like that, but your plan looks very sensible, particularly the bit about not saddling yourself with excess debt. Good luck with that too!

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You are planning to put ALL of your savings into gold and silver? Is that not a little risky? Given that your savings are only going into a deposit for a house any account paying a reasonable amount of interest would do, as all you need to consider is the purchasing power of your deposit versus the house you want. In my view speculation is not necessary unless you have the money ear marked for something else. Gold can go down as well as up and can move swiftly and brutally in either direction.

That's the part i'm most uncertain on. Basically what I want is some way to safeguard my money from any meltdowns. I don't want to save up a 25% deposit to find it's worthless.

Thanks for the good luck wishes, I know my plans aren't what everyone else my age wants. But hey, each their own (:

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Are you seriously denying that being in significant debt = being trapped into earning decent money? If it's not true then why has the guy got such a problem?

Because our society is structured in such a way that the average bloke has to go into significant debt to put a roof over his family's head. Surely that is obvious - it's what this site has been about for the last 6 years. You talk about it as though it were a choice. If you're a young bloke, married with a couple of kids what are your options. Ask for council housing? No chance unless you're from Somalia. Rent from a private landord? Great if you don't mind chucking £800 a month down the drain to pay someone else's mortgage and if you are happy living under the constant (6 monthly) threat of being kicked out.

The bolded statement isn't bizarre at all: UK plc is living beyond its means, both the government and trade deficits show this clearly. But that doesn't mean that individuals can simply opt out and choose not to go into debt - unless you want to live in the gutter or, pay someone else's mortgage for them. Lots of us seem to think we have some god-given entitlement to keep doing so. One example of that is that our "pretty damn ordinary" houses would doubtless seem like palaces to many of those with whom we're competing nowadays (and who are kindly helping to fund our debt-habit with their surpluses).

If he was the kind of person who could do that, don't you think he'd be happier than you've portrayed him to be? Chances are he's incapable of letting go of what he has, err, he will probably have it taken away from him because of his nature and/or circumstance. In which case I expect he'll carry on in his current groove, His current groove! Which is what precisely. Getting up every day, working hard to provide for him and his family and living an ordinary life which from what you say hasn't worked out that well for him so far. You talk as though he has choices - that's the thing, he hasn't. Or maybe he has, he could try and live on benefits for the rest of his life. They're the choices. Work or not work. At the moment he has no choices. He is DESPERATE to work - just to keep going. Not because he flippantly and stupidly lived beyond his means.

In the last boom I took a deliberate decision to downsize. I was scared of becoming unemployed with what was a relatively large mortgage around my neck. You'll laugh - 60k mortgage - earning 21k at the time. Mind you, interest rates were between 10% and 15% in those days.

So I moved and took the mortgage down to 30k - and about a year later was made redundant from the construction industry. There was absolutely no work around. None. There was not one tower crane on the London skyline. (We used to count them from time to time to see who had the most work on). I remember the sleepless nights well, the sense of panic and the overwhelming sense of responsibility. I had a wife and a toddler to look after - I HAD TO FIX THINGS. At no point did I think I had got myself into the mess I was in. Just couldn't see that particular argument. If someone had said to me 'it's your own fault borrowing money to put a roof over your head - look at the mess you've got yourself in' - I would probably have smacked them in the mouth first, and then had a discussion.

Still, each to their own I guess.

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>> Are you seriously denying that being in significant debt = being trapped into earning decent money? If it's not true then why has the guy got such a problem?

>Because our society is structured in such a way that the average bloke has to go into significant debt to put a roof over his family's head.

Our society promotes the perception and expectation that the average bloke must join in the debt-party to put a roof over his family's head (and it plainly ain't so -- but the illusion is sustained because so many people play along; that's what society is).

> Surely that is obvious - it's what this site has been about for the last 6 years. You talk about it as though it were a choice. If you're a young bloke, married with a couple of kids what are your options. Ask for council housing? No chance unless you're from Somalia. Rent from a private landord? Great if you don't mind chucking £800 a month down the drain to pay someone else's mortgage and if you are happy living under the constant (6 monthly) threat of being kicked out.

The big message of HPC.co.uk has been that houses have been ridiculously overpriced. There are certainly problems with rental tenure and they ought to be addressed; but mortgage interest is also a rental payment down the drain every month. The problems of renting are trivial compared with the problems you get by buying a mortgaged bubble-asset when the bubble bursts and you lose your job. That's precisely what this site has been about for the past 6 years.

I knew people who were in the same position in the early 90s (but with much higher interest rates). It happens in every boom/bust cycle. Borrowers may have acted in ignorance, and I certainly feel sorry for them, but going bust during a bust is hardly a new phenomenon. Compare with all the HPCers who prudently stood aside and refrained from pumping the debt-bubble.

>>The bolded statement isn't bizarre at all: UK plc is living beyond its means, both the government and trade deficits show this clearly.

>But that doesn't mean that individuals can simply opt out and choose not to go into debt - unless you want to live in the gutter or, pay someone else's mortgage for them.

As I touched on above, this idea of paying someone else's mortgage for them becomes a canard during a house price bubble, thought it seems deeply ingrained in our conventional wisdom. HPC-oriented blogs and articles have been full of people renting somewhere for less than they could have mortgaged it.

Conventional wisdom = conventional lifestyle = career + mortgage + property ladder + good school for the kids = another generation of conventional wisdom.

I accept that not everyone can break out of that (yet). But the world is changing, and I maintain that those who can break out, are going to end up happier and more prosperous.

> You talk as though he has choices - that's the thing, he hasn't. Or maybe he has, he could try and live on benefits for the rest of his life. They're the choices. Work or not work. At the moment he has no choices. He is DESPERATE to work - just to keep going. Not because he flippantly and stupidly lived beyond his means.

I have no idea of his detailed circumstances. Does he have equity or is he really trapped? If he has equity he has choices. If he has NE then he's been unwise in his purchasing and borrowing, and must deal with the consequences of his past choices. His choices definitely seem limited by his debts though; basically he can't afford to price himself into work because he must earn a minimum amount to service the mortgage. That's a terrible position to be in, and it goes with the territory of being in significant debt.

> In the last boom I took a deliberate decision to downsize. I was scared of becoming unemployed with what was a relatively large mortgage around my neck. You'll laugh - 60k mortgage - earning 21k at the time. Mind you, interest rates were between 10% and 15% in those days.

> So I moved and took the mortgage down to 30k - and about a year later was made redundant from the construction industry. There was absolutely no work around. None. There was not one tower crane on the London skyline. (We used to count them from time to time to see who had the most work on). I remember the sleepless nights well, the sense of panic and the overwhelming sense of responsibility. I had a wife and a toddler to look after - I HAD TO FIX THINGS. At no point did I think I had got myself into the mess I was in. Just couldn't see that particular argument. If someone had said to me 'it's your own fault borrowing money to put a roof over your head - look at the mess you've got yourself in' - I would probably have smacked them in the mouth first, and then had a discussion.

> Still, each to their own I guess.

Exactly as I said: it's happened before. Why should anyone be surprised that it's happening again? You personally tried to act prudently but were still caught out, and that's unfortunate -- yet it was your signature on the mortgage application; how can you not take responsibility for that, and why should you lash out at someone else over it?

Debt = risk; risk means things might go pear-shaped.

Edited by huw
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