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gilf

Update On My Friend

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I doubt people will remember but I posted about a friend of mine late last year, in summary he has been made redundant 3 times in the last 5 years, the latest coming in September. Each time he got a decent ish payout, he had a flat he purchased about 12 years ago for a mortgage of £50k the redundancy payments would have paid that off in full (especially given he has had 12 years worth of mortgage payments). But he had lived the high life each time and gone on expensive holidays rather than use the money to reduce is mortgage.

I went for a drink with him last night, he has been living off the latest redundancy payment and said he has one month more to go before he starts to sign on. he has been look for a job since September but hasn't had a single interview. Other people who were made redundant at the same time as him are in the same situation. In addition to his redundancy money he has been living off his credit cards, however they are now maxed out.

His biggest problem is that he has put himself in a position where only a certian level of salary will do, anything less than £28k means he doesn't have enough to pay off his debts.

He said last night that he was at the point now where he was considering selling his flat as that was his only way out.

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why doesnt he rent out a room? i believe if its in your own home you can get 400ukp a mounth tax free? It would give him some breathing space...

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Surely this says plenty about your friend but almost nothing about the houseing market?

Depends where his friend ranks on the global scale of stupidity. Even if he was two standard deviations above average stupidity, that would still be a lot of houses that go on the market after their owners MEW their homes so that they can see if you really can make a bonfire solely out of rolled up money.

Billy Shears

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Depends where his friend ranks on the global scale of stupidity. Even if he was two standard deviations above average stupidity, that would still be a lot of houses that go on the market after their owners MEW their homes so that they can see if you really can make a bonfire solely out of rolled up money.

Billy Shears

LOL, BS. :P

Always remember, half the population have below average intelligence.

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Surely this says plenty about your friend but almost nothing about the houseing market?

True, but he has a degree and always done very well in jobs he has had (as I alluded too he has done too well because he now can't just take any old job).

It says a lot about the general economic climate in that clever people have been sucked in by the spin and have spent spent spent. It says that he is not alone and that while many people think that employment is high there are real people having real problems getting a job. It says despite the fact we are constantly told that prices are affordable, circumstances change.

I don't doubt the underlying message is my friend has been foolish, but how many other foolish people are out there?

why doesnt he rent out a room? i believe if its in your own home you can get 400ukp a mounth tax free? It would give him some breathing space...

Not so easy when it's a one bedroom flat.

Edited by gilf

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True, but he has a degree and always done very well in jobs he has had (as I alluded too he has done too well because as he now can't just take any old job).

I wouldn't put too much on people having degrees in this day and age. The value of a degree has been crashing for decades.

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I wouldn't put too much on people having degrees in this day and age. The value of a degree has been crashing for decades.

If this is true then it makes a degree more necessary than ever unless you run your own business. At most large companies it is a prerequisite for most roles, especially management.

Edited by Gtr London FTB

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I remember this story well. This is one of the reasons I will not get a big mortgage. I'm being paid a good salary and I know if I get made redundant I will have to possibly take a 30% pay cut or more.

Your mate must be kicking himself at how he's spent spent spent??

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Are you serious? He needs to earn 28k to service a 50k Mortgaga? What is he doing paying it off in 5 years?

I believe thats what he had, but MEWed it!

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Are you serious? He needs to earn 28k to service a 50k Mortgaga? What is he doing paying it off in 5 years?

I was trying not to retell the entire story so missed out a few important facts, he bought for £50K but he has remortgaged a few times along the way. He also has various loans and credit cards. If anything I think it's an admission that he knows that unless he earns X amount he will be stuck in this situation forever and therefore is realistic in what he needs to earn to get himself out of the hole he is in.

Your mate must be kicking himself at how he's spent spent spent??

It's not my buisness (despite the fact I offer it up for consumption here :) ) so I don't tend to ask too many questions. Having said that I don't think he really relates the situation he is in to the one he could be in had he been just a little wiser.

In fairness to him in the first instance he took voluntary redundancy and had another job lined up, the smart thing to have done would have been to use his redundancy money to clear his debt and pay off a big chunck of his mortgage, but he decided to pay a little off his debt and spend £8k on a trip on concord, the rest of money he just spend on insignificant tat. It's easy to criticise in hindsight but given at that point he was already in debt he should maybe have thought about getting himself even.

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True, but he has a degree and always done very well in jobs he has had (as I alluded too he has done too well because he now can't just take any old job).

It says a lot about the general economic climate in that clever people have been sucked in by the spin and have spent spent spent. It says that he is not alone and that while many people think that employment is high there are real people having real problems getting a job. It says despite the fact we are constantly told that prices are affordable, circumstances change.

I don't doubt the underlying message is my friend has been foolish, but how many other foolish people are out there?

Not so easy when it's a one bedroom flat.

Didn't Isaac Newton lose big £££££ in the South Sea Bubble? According to various pages found on Google, he lost £20K which would still be a sizeable chunk these days. He's generally considered to be a pretty smart cookie in terms of maths and physics.

Speaking as someone with three degrees, it's my opinion that people with degrees, and particularly advanced degrees, have learnt an awful lot about more and more specialised topics, but then have an equal sized hole in the remainder of their knowledge.

Billy Shears

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The usual confusion about mean, median and mode.

Mode, the highest number of observed events.

http://en.wikipedia.org/wiki/Mode_%28statistics%29

Median, the point at which half are greater, half are less.

http://en.wikipedia.org/wiki/Median

Mean or arithmetical average

http://en.wikipedia.org/wiki/Mean

It is quite possible for the mean to be significantly higher than the mode if there are a minority of very clever people distorting the sample.

I.e. A busload of Oxfords professors walking through Bluewater would tend to interfere with the observed mean but not affect the mode.

In this analogy I am equating academic ability with intelligence, which is not, in my observation, neccesarily correlated, but I hope you can forgive the simplification.

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I was trying not to retell the entire story so missed out a few important facts, he bought for £50K but he has remortgaged a few times along the way. He also has various loans and credit cards. If anything I think it's an admission that he knows that unless he earns X amount he will be stuck in this situation forever and therefore is realistic in what he needs to earn to get himself out of the hole he is in.

It's not my buisness (despite the fact I offer it up for consumption here :) ) so I don't tend to ask too many questions. Having said that I don't think he really relates the situation he is in to the one he could be in had he been just a little wiser.

In fairness to him in the first instance he took voluntary redundancy and had another job lined up, the smart thing to have done would have been to use his redundancy money to clear his debt and pay off a big chunck of his mortgage, but he decided to pay a little off his debt and spend £8k on a trip on concord, the rest of money he just spend on insignificant tat. It's easy to criticise in hindsight but given at that point he was already in debt he should maybe have thought about getting himself even.

If he has mewed to buy "stuff" then more fool him. That's not the same as someone who mewed to buy more property. If he is a forced seller it's by his own complete incompetence and someone will be very happy to relieve him of his home.

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LOL, BS. :P

Always remember, half the population have below average intelligence.

To be exact, half the population have below median intelligence.

:P

frugalista

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To be exact, half the population have below median intelligence.

:P

frugalista

And more worryingly, half the population have above mean intelligence. Now, which ones are the home owners in?

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HE IS NOT ALONE...

Personal view: Forget Prudence. We're drowning in debt, Mr Brown

By Vince Cable (Filed: 07/03/2006)

Britain's last decade of growth has been driven by consumer spending. There have been tangible benefits in rising living standards and falling unemployment. But there is a nasty sting in the tail: a growing level of household indebtedness which, for many, is not sustainable.

Indeed, retail spending trends suggest growing nervousness, as is borne out again today by another set of weak British Retail Consortium sales figures.

ccpers07.gif

Britain's personal debt is increasing by more than £1m every five minutes and families have an average of £47,000 of debt - double the level in 1997 and £8,000 of it is unsecured, mainly credit card debt.

Optimists would say that none of this matters since debt servicing is not a problem in the era of low interest rates. Comforting, but wrong.

Recent figures from the OECD show that 18pc of take home pay now goes into debt service, once allowance is made for minimum credit card payment: a level very similar to that of the early 1990s when the 1980s boom collapsed.

County courts data shows a 70pc increase in repossessions in 2005 (albeit at a lower level). Personal bankruptcies are at record levels (67,580 last year). The Financial Services Authority reports that 2m families are "constantly struggling" though not yet in arrears.

Do I smell conspiracy theory here? As debt rises, Government passes legislation to make it easier to write off the debt through bankruptcy, hence allowing the 'good little consumer' back into the High Street as soon as possible to start all over again. When the crash happens, lots of lives will be disrupted, but not as badly had the bankruptcy laws not been changed.

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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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