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paradox

Optimist Or Pessimist

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There is a lot of dross spouted by some posters about how all you need is to read Paul Mckenna and get a positive outlook in life and lo and behold, you will achieve entry to Buy to Let heaven and financial freedom. If you haven't done that, or if you haven't invested in the Berlin property market by now, then you are a pessimist and a loser and you deserve your fate.

For the sake of logic, clarity and good debate I think we need to establish a few principles. I speak from experience having been an owner occupier, a landlord and a tenant at different periods in my life.

1) A positive outlook on life IS important

2) Genuine risk SHOULD be rewarded, and society should encorage this

3) Geniune risks that fail SHOULD NOT be compensated, and society should accept this

4) Money and debt are important. Debt, credit and the subsequent gearing they allow are useful. However prudence is wise. There is nothing wrong with taking a loan, there are many things wrong with getting over committed.

5) The economy moves in cycles, asset prices move in cycles. There was a time when you could make an absolute mint from buying up loads of flats in city centres in the UK and renting them out or selling them to a strengthening market. If you put your mind to it and called the right shots you could probably become a millionaire and achieve financial freedom for you and your family during the period 1994 - 2004.

6) Five no longer applies. Some people had the foresight to apply 5 above. Others didn't. Thats fine. However some people suggest 5 above still applies today, some people also take pleasure in beraiting, gloating, goading, and labelling people who did not do 5. Why?

7) I run a small consulting company, I have business ventures, I do not work for a large organisation in a secure job with a final salary pension scheme. I am studying as well, I have lived in many countries. I am optimistic and I take risks, maybe too many risks at times. I have lost money and I have made money. By definition, my lifestyle is one of risk and optimism. Yet I do not see the property market as the place to be RIGHT NOW in Jan 2006. Why?

8) It is technically impossible for everybody to do 5 above at the same time. If the entire readership of Paul Mckenna books attempted to turn themselves into Kirsty Allsopps they would fail because there would be too many of them. Those who succeeded at 5 above actually required others to be doing other things in order for them to succeed.

9) There are four key points that every sane member of the UK population should be able to agree on. Can we at least agree on them:

i) 5 above no longer applies today and UK residential property is overvalued at the moment. Prices are unsustainably high in most of the UK (though there may be some exceptions to this)

ii) High house prices have negative social effects, separate the rungs of the ladder and are economically inefficient (no space to go into this now but lecture notes can by supplied)

iii) There is nothing wrong with having a balanced mix of tenure ranging from Owner Occupying, to Privately Renting to Public Renting. There is nothing wrong with renting a property all your life, just like wealthy people do in Spain (I know some of them). Likewise there is nothing wrong with buying your house outright etc.

iv) Risk taking optimists can succeed in life whilst renting. There is no automatic pre ordained correlation between property tenure and wealth. (although many in the UK do choose to have a large proportion of their wealth in property - and thats fine)

10) If we can agree on these points then we can have a useful debate. I would be very interested to hear from anyone who does not agree with the four points above. I have tried to put in caveats so that the points are as clear as possible.

Edited by paradox

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8) It is technically impossible for everybody to do 5 above at the same time. If the entire readership of Paul Mckenna books attempted to turn themselves into Kirsty Allsopps they would fail because there would be too many of them. Those who succeeded at 5 above actually required others to be doing other things in order for them to succeed.

It is a big IF as to whether everyone has the ability to become wealthy from property.

It's an even bigger If as to whether everyone would risk losing money or compromise their lifestyle for the short term.

And of course, there are simply other people better at making money from property because of their trade/skills.

For this reason I think there will always be money to be made from property. There will be losers but there will also be those that make enough from property to retire way before the age of 75 or whatever the age will be by that time.

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Thanks enworb. Now what about my four basic points. Would you be able to say "yes I agree" to each of them?

For the others regular bulls...

In the words of Delia Smith,

"Cmon, lets be avin you"

Brainclamp, TTRTR, Dogbox etc

Can we agree on the four points above?

And then agree to disagree on other issues surrounding these four basic points.

(Btw Dogbox, I think your Berlin idea could pay off - but that would be for a different thread)

Edited by paradox

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Paradox,

it's good to see some clarity and joined up thinking brought to bare on the socio/economic drivers of the property market. The property market in the UK and peoples exposure to it or disenfrancisment from it, is a very emotive subject. I view myself as a positive realist and I'm positive that now and in many cases the last 2 years were not the time to enter the market for investment purposes.

Pablo Silver or Lead?

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1) A positive outlook on life IS important

2) Genuine risk SHOULD be rewarded, and society should encorage this

3) Geniune risks that fail SHOULD NOT be compensated, and society should accept this

4) Money and debt are important. Debt, credit and the subsequent gearing they allow are useful. However prudence is wise. There is nothing wrong with taking a loan, there are many things wrong with getting over committed.

5) The economy moves in cycles, asset prices move in cycles. There was a time when you could make an absolute mint from buying up loads of flats in city centres in the UK and renting them out or selling them to a strengthening market. If you put your mind to it and called the right shots you could probably become a millionaire and achieve financial freedom for you and your family during the period 1994 - 2004.

6) Five no longer applies. Some people had the foresight to apply 5 above. Others didn't. Thats fine. However some people suggest 5 above still applies today, some people also take pleasure in beraiting, gloating, goading, and labelling people who did not do 5. Why?

7) I run a small consulting company, I have business ventures, I do not work for a large organisation in a secure job with a final salary pension scheme. I am studying as well, I have lived in many countries. I am optimistic and I take risks, maybe too many risks at times. I have lost money and I have made money. By definition, my lifestyle is one of risk and optimism. Yet I do not see the property market as the place to be RIGHT NOW in Jan 2006. Why?

Hi P

1-4 why would your bulls disagree ? But I would venture they will have a different interpretation of the words 'over -committed' than yours.

6, - don’t you think luck plays a significant role in that activity? I have heard people gloat about the money they have made in property and they seem to feel a very strong desire (from insecurity/vanity?) to attribute it to their own 'foresight', judgement etc. There is a great deal we don’t/can't control in life though many feel more comfortable believing otherwise or their own 'timing'. As for property developers I would call someone like Ms Beeny more of an entrepreneur because she rode the wave and moved on to another venture. Those who are still banging on about property seem to believe they've found some kind of financial holy grail and just can't believe they, themselves might be wrong.

As for 7 not sure why you're asking as you and so many others on here seem to have found other ways to make money and do not favour property. For many who continue to invest in it it's the love affair of something permanent, for those who continue to buy (because they just want a home) I would suggest a lack of patience and flexible thinking.

LL

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LL,

Yes I do think that luck plays a part, as it does in any venture.

I am not neccessarily trying to get the bulls to disagree, I am simply trying to establish some common ground and get away from the following sort of rubbish:

Property = good = get up and go = getting the rewards for taking the risk etc etc

Anything else = bad= dead money = no risk = lazy

It is quite riduculous I know , but it really irritates me the way a debate about the market NOW in 2006 is sometimes translated into the above equation - with the implicit assumption that people should expose themselves to the property market AT ALL TIMES and in all conditions.

Whatever happened to the phrase "Past performance is not a guide to future performance"

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We each have our own idea of what's logical in any given situation.

Even here in the rarified atmosphere that is HPC.

It's called individual psychology.

Your risk may not be mine and vice versa.

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LL,

It is quite riduculous I know , but it really irritates me the way a debate about the market NOW in 2006 is sometimes translated into the above equation - with the implicit assumption that people should expose themselves to the property market AT ALL TIMES and in all conditions.

Whatever happened to the phrase "Past performance is not a guide to future performance"

But P aren't you largely preaching to the converted here? There aren't that many people here are there who going to passionately advocate investing in property right now?? Maybe I haven't been here long enough but I've only read a couple of posters who I would describe as bulls with arguments to support their activities in the property market. If you want a real debate shouldn't you be posting this on a fourm where they're all still buying madly? Surely the most people can/will give you here are their theories as to bulls' behaviour.

LL

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11/ There are always people who say now is the right time and others who say now is the wrong time.

12/ The fact is that the time is always NOW, so it is easy for bears to tell us the past was when we were right (or lucky to put it in their words), but the future is when we will be wrong. Bears have always done that and will always be trying to convince doers that they shouldn't do.

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11/ There are always people who say now is the right time and others who say now is the wrong time.

12/ The fact is that the time is always NOW, so it is easy for bears to tell us the past was when we were right (or lucky to put it in their words), but the future is when we will be wrong. Bears have always done that and will always be trying to convince doers that they shouldn't do.

You and dogbox seem to live in a strange world in which "bear" is indelibly stamped on one's personality from birth.

Being a bear is a position you take on a market which can change. I was not a property bear until about 2002.

In 1997 I was a property bull and was frantically trying to find ways to borrow money to buy a property (back then credit was tighter...).

In 2002 I looked to buy a crappy one-bed ex-council flat was just out of my reach, my job was perilous, and I already owed about 15K to the bank (career development loan). When I realised that, I did some research and realised that property prices were getting out of control.

My view on property since then has been pretty much academic, since I can't afford to buy unless I lie-to-buy, or take on a mortgage on a ludicrous multiple of the average income.

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Guest prudence

<<genuine risk should be rewarded>>........... if that were always to be the case there would be no risk involved!!

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Not buying now is not a zero risk option.

Prices could start going up at 20% again.

If they do, I fear many will never own a home.

ABB

Have I got news for you, regardless of what happens to HP's in the future, many will never buy a home....that's life.

You and dogbox seem to live in a strange world in which "bear" is indelibly stamped on one's personality from birth.

Being a bear is a position you take on a market which can change. I was not a property bear until about 2002.

In 1997 I was a property bull and was frantically trying to find ways to borrow money to buy a property (back then credit was tighter...).

In 2002 I looked to buy a crappy one-bed ex-council flat was just out of my reach, my job was perilous, and I already owed about 15K to the bank (career development loan). When I realised that, I did some research and realised that property prices were getting out of control.

My view on property since then has been pretty much academic, since I can't afford to buy unless I lie-to-buy, or take on a mortgage on a ludicrous multiple of the average income.

I have never met a bearish person who is bullish at any other time.

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Have I got news for you, regardless of what happens to HP's in the future, many will never buy a home....that's life.

I have never met a bearish person who is bullish at any other time.

This forum, by its nature, is a very negative environment to spend any length of time in. I recall peering in around Xmas and New Year and the majority of posters actively posting at the time were positively gloating as to how tight they had been over the holiday period. It shocked me a little, Scrooge may have been successful but.....It also dawned on me then that this forum does, for the most part, attract very negative posters with a negative viewpoint on life in general, or who have had experiences that they perceive to be negative and dwell on without moving on ( searching HPC on google to find it in the first place could surrender clues as to that...)

There will always be success and failure in property as in any other business. If TTRTR genuinely stagged the market and displayed gut instinct together with guts to find the finance, creatively or not, to back his hunch, then he deserves whatever good fortune that came his way....

Similarly those that are so risk adverse, or simply tight, will IMHO always struggle to find fulfillment in whatever they choose...

Meant to add, I`m an optimist, the glass is always 51% full

Edited by Converted Lurker

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This forum, by its nature, is a very negative environment to spend any length of time in. I recall peering in around Xmas and New Year and the majority of posters actively posting at the time were positively gloating as to how tight they had been over the holiday period. It shocked me a little, Scrooge may have been successful but.....It also dawned on me then that this forum does, for the most part, attract very negative posters with a negative viewpoint on life in general, or who have had experiences that they perceive to be negative and dwell on without moving on ( searching HPC on google to find it in the first place could surrender clues as to that...)

Meant to add, I`m an optimist, the glass is always 51% full

I couldn't agree more, I find the forum a very interesting place to visit but it can be depressing at times.

I like to think I'm an optimist but I'm also a realist, just when you think you have it made, life has a bad habit of biting you on the @rse! :blink:

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Have I got news for you, regardless of what happens to HP's in the future, many will never buy a home....that's life.

Have I got news for you.... If they all did, YOU would be out of a job !

tell us something we don't know...

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"I have never met a bearish person who is bullish at any other time." - TTRTR

Bol**cks!

Bought late 93 with maximum mortgage (bullish).

Moved up the ladder in 98 again with maximum mortgage (bullish).

Just sold house for ceiling price on road (bearish).

Not bothered if prices stagnate or rise as want to move anyway, but optomistic that if house prices do fall (most likely option) I can turn bull again - try stopping me!

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I have never met a bearish person who is bullish at any other time.

I'm bearish on some things, bullish on others at the SAME time.

Housing moves in fairly long cycles so my opinion doesn't change often. But change it does.

Currencies move far more rapidly and I adjust my opinion (bearish or bullish) 5 times a week normally. On stock I adjust it a little less often.

No point being a permabull or permabear. Be a bull or bear as the market suggests will be profitable.

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Thanks enworb. Now what about my four basic points. Would you be able to say "yes I agree" to each of them?

For the others regular bulls...

In the words of Delia Smith,

"Cmon, lets be avin you"

Brainclamp, TTRTR, Dogbox etc

Can we agree on the four points above?

And then agree to disagree on other issues surrounding these four basic points.

(Btw Dogbox, I think your Berlin idea could pay off - but that would be for a different thread)

I agree with most of your points - but like I said before, not everyone is in the position to be able to make money from property. Because of finances, skills, risk taking and a positive outlook, only a small percentage of people will be able to make money from property at all times.

TTRTR hasn't made his money from buying new build flats. He buys properties that need refurbishing or he extends them to make an initial profit, and to achieve a good rental yield.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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