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How not to be a mug in this economy


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Not many are spending money at the moment.....they can't go out, take trips abroad, eat out in restaurants, buy what is deemed to be unnecessary.....petrol people must have saved lots by not having to fill up, lots of refunds being claimed for air and rail...nobody spending on going out, tickets refunded for shows, concerts, theatre etc....weddings and birthdays  cancelled......so you could say credit interest has been created by saving on spending....money saved by saving on debt interest....;)  

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On 10/04/2020 at 14:11, phantominvestor said:

My savings are being eroded away by inflation and quantitative easing.

At the same time I don't want to be a mug and working forever.

At the same time,  I cannot afford a house.

Should I just spend my money and be feckless?

Go on benefits?

I'm thinking exactly the same. I've always done everything in my life to save money, be prudent. From working all the overtime they gave me, to running a crap old car, to staying in, not taking expensive holidays, investing wisely, even not getting married and having kids and chucking any woman who wanted to.....

I'm the mug, I'm the loser. Here I am in the middle of COVID sitting on cash and assets, not employed, sitting in my cheap cash bought house burning savings. And watching every other sod being paid 80-100% to sit at home. No help at all for people like us. It is really rather depressing. Might as well spend it ASAP, until 6k left then I can claim universal credit.

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14 minutes ago, bear.getting.old said:

I'm thinking exactly the same. I've always done everything in my life to save money, be prudent. From working all the overtime they gave me, to running a crap old car, to staying in, not taking expensive holidays, investing wisely, even not getting married and having kids and chucking any woman who wanted to.....

I'm the mug, I'm the loser. Here I am in the middle of COVID sitting on cash and assets, not employed, sitting in my cheap cash bought house burning savings. And watching every other sod being paid 80-100% to sit at home. No help at all for people like us. It is really rather depressing. Might as well spend it ASAP, until 6k left then I can claim universal credit.

But you won’t do that because it would go against everything you stand for, surely? 

Do you feel your political party has served you well in this crisis? 

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I don't know. It's like a light bulb came on telling me I've been wrong all my life. Re. the Conservatives well they are being far  more socialist than I would like but I know any of the other parties would have squandered even more tax payers money on saving everyone apart from the prudent

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On 4/10/2020 at 2:11 PM, phantominvestor said:

My savings are being eroded away by inflation and quantitative easing.

At the same time I don't want to be a mug and working forever.

At the same time,  I cannot afford a house.

Should I just spend my money and be feckless?

Go on benefits?

Put it in gold for the meantime? 

Once house prices crash, give it a year and people start getting used to covid-19 and intermittent lockdown.

Then the government will just replace the dead with immigration from Africa, we all know it's going to happen, as the rich will need a workforce.

So this is the best opportunity to buy, after that expect house prices to be even more ridiculous than before.

Look at getting a job in the meantime, plenty of jobs in Health and social care.

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13 minutes ago, bear.getting.old said:

I don't know. It's like a light bulb came on telling me I've been wrong all my life. Re. the Conservatives well they are being far  more socialist than I would like but I know any of the other parties would have squandered even more tax payers money on saving everyone apart from the prudent

Perhaps it’s time for a re-evaluation of what constitutes prudence. 

 

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Don't be fooled: Britain's coronavirus bailout will make the rich richer still

 

The crisis itself is already exacerbating economic inequalities. At first sight, the government’s income support schemes might look as though they will help to redress this. In reality, they will achieve almost exactly the opposite. It’s been widely noted that many people remain excluded from the safety net, but the problem goes deeper than this. Where is all this money coming from – and where is it ultimately going?

 

The answer lies principally in a massive expansion of debt. Wage support is being funded by large-scale public borrowing of the kind we were told was unaffordable just a few months ago (although this is now being supplemented by direct financing with newly created money from the Bank of England). Yes, this could usher in a new era of state intervention – but it could just as easily herald a new era of austerity.

Conservatives such as Sajid Javid – who tweetedthat “the whole point of fiscal conservatism in normal times is to be able to act decisively if there is a genuine economic emergency” – are already trying to reconcile the crisis response with austerity politics. Fiscal hawks will be keen to draw a line under the crisis period and insist that we now need to tighten our belts again to pay for it.

Meanwhile, mortgage and rent “holidays” and guaranteed loans for small businesses require people to take on private debts that they will have to pay back when the crisis is over. One way or another, then, the bulk of the costs will still eventually be borne by ordinary people.

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On 10/04/2020 at 14:11, phantominvestor said:

My savings are being eroded away by inflation and quantitative easing.

At the same time I don't want to be a mug and working forever.

At the same time,  I cannot afford a house.

Should I just spend my money and be feckless?

Go on benefits?

Not advice, but I'd try and pick up a stockmarket/global equity tracker on one of the market dips. These low interest rates and queasing are only designed to do one thing. 

I was in cash for 18 months (since Oct 2018) as I knew the Dow was way overvalued and I'd also gained in GBP term from the weak pound. In retrospect I sold out too early, but with a tracker fund you can't execute that fast, so it makes sense to sell before the first sign of trouble.  I've now bought back; about £300k of that was with the Dow in the mid 18,000 range, and the rest about 22k.

I can live with it falling a bit, as I now have 40% more stock units than I previously held before in 2018.

The thing with the Coronavirus is it will end, and the financial spigots are now fully open. A major crash won't be allowed and I'd have Trump down for doing anything possible to inflate the market before November. That said, whilst I like holding Global Equities, I am fractionally nervous of GBP strengthening which would reduce the value of international shares, though in some ways stocks move to correct this. 

The main advantage of stocks is that if you reinvest dividends you are unlikely to lose long term. 

Edited by Mikhail Liebenstein
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I sympathise, and am in some way in the same boat. (Though I do own a small house) And I'm sure disaster is all around etc. etc. but I wonder at the 3% inflation figure. I really don't think my personal purchases have increased that much, in  many ways places like Primark, Wetherspoons, Aldi/Lidl, even Amazon have made living cheaper.

And even if your house fund is not growing - what if house prices fall by 10%? You;re better off?

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1 hour ago, bear.getting.old said:

I'm thinking exactly the same. I've always done everything in my life to save money, be prudent. From working all the overtime they gave me, to running a crap old car, to staying in, not taking expensive holidays, investing wisely, even not getting married and having kids and chucking any woman who wanted to.....

I'm the mug, I'm the loser. Here I am in the middle of COVID sitting on cash and assets, not employed, sitting in my cheap cash bought house burning savings. And watching every other sod being paid 80-100% to sit at home. No help at all for people like us. It is really rather depressing. Might as well spend it ASAP, until 6k left then I can claim universal credit.

are you me ???  

sorry my bad i don`t own a house. 

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Inflation might seem low for house owners, its not for renters.  I would say that the UK Governments figures on inflation seem on the low side and I sometimes wonder if they are being totally honest with us..

As for reevaluating political parties; well I do hope lots of people wake up to the fact that the Tories are partly culpable for the situation we are now in.  They were warned back in 2016 that the UK was poorly prepared for an outbreak like the one we have now and they chose to ignore the advice.  I have spent my whole life being astonished that anyone who was not exceedingly wealthy would vote Tory as its really not in their interests to do so.  I do hope more people wake up to the fact that they really are the Nasty Party.

Edited by dougless
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2 minutes ago, phantominvestor said:

Should I pay off my student loan? it's 13,000?

How old are you? 

Worth understanding as the loans get wiped at certain ages. See MSE blog

https://blog.moneysavingexpert.com/2017/05/will-student-loan-written-off/

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Is house price inflation the true value of money after all the money printing?

Manufacturers and supermarkets take a hair cut with inflation just like everyone else. Prices don't go up that fast. The value of money is being distorted by money printing.

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17 minutes ago, phantominvestor said:

I'm 30 years old. I rent. £650 a month.

Having a few years of savings.

That's a fair while to go then. I was just going to say if you were 45-49 don't bother as it might get wiped at 50.

Are you having to make repayments now? There is an earnings threshold explained here, but I assume you understand that already. https://www.gov.uk/repaying-your-student-loan/what-you-pay

If you are making payments, then you probably need to decide on the financials alone. Can the money give you a better rate of return than the loan interest? If you pay the minimum, and invest instead for as long as possible it should clear the loan easily. I'm not saying stockmarkets are bottomed yet, but maybe get a stock ISA and pay in a bit each month. I am now mid 40s, and the best savings I have are ones from when I was young. 

Edited by Mikhail Liebenstein
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1 hour ago, PeanutButter said:

Meanwhile, mortgage and rent “holidays” and guaranteed loans for small businesses require people to take on private debts that they will have to pay back when the crisis is over. One way or another, then, the bulk of the costs will still eventually be borne by ordinary people.

Well that is obvious, but those in reciept of furlough or government handouts will not have to pay it back, but perhaps everyone will eventually in future taxes.

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2 hours ago, Speed1987 said:

So this is the best opportunity to buy, after that expect house prices to be even more ridiculous than before.

2 bed terrace costs £0.5m round my way, doesn't look like much of an opportunity to me.

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1 hour ago, dougless said:

Inflation might seem low for house owners, its not for renters.  I would say that the UK Governments figures on inflation seem on the low side and I sometimes wonder if they are being totally honest with us..

As for reevaluating political parties; well I do hope lots of people wake up to the fact that the Tories are partly culpable for the situation we are now in.  They were warned back in 2016 that the UK was poorly prepared for an outbreak like the one we have now and they chose to ignore the advice.  I have spent my whole life being astonished that anyone who was not exceedingly wealthy would vote Tory as its really not in their interests to do so.  I do hope more people wake up to the fact that they really are the Nasty Party.

Not at all. They are far nicer than any of the alternatives. As for trying to use the deaths by COVID as political point scoring you should be ashamed of yourself. Have some respect for the dead. Inflation has always been understated including in Labour days.

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  • 418 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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