Time to raise the rents. Posted June 4, 2006 Share Posted June 4, 2006 There seems to be an overiding feeling amoungst bears on this forum that to be debt-free is a good thing. It's prompted a few thoughts that I wanted to put down for you, some original & some you will have heard before: There is good debt & bad debt. Good debt facilitates the aquisition of assets and is particularly good if the asset grows in value. I don't know any wealthy person that is debt free. I do know average people that are though. Bad debt is accumulated against non-assets, particularly consumables. The debt is obviously built up in a process where the person spends more than they bring in. I know many average people with this type of debt & I agree with them that they should work to get rid of it, but to motivate themselves for that they need to understand how they got the debt & who benefits from them being in debt. An understanding of what the debt really costs them in terms of future opportunities will help as well. IMO the only time you can stand up & proclaim being debt-free is good for you, if when you both own your home and have enough assets to live off for the rest of your life. And what of you who are debt-free, but have no assets? Well I realised today that you're debt is to society who has produced the assets around you that you have grown up with and still use now. Your interest payments are rent, labour, taxes & whatnot. You can actually put a rough monetary value on that debt. If I were you, I'd calculate it today & start working on paying it off! This is where Margaret Thatcher really knew her stuff. To get the lazier people up & out to work paying their debt to society, she had to rid them of their cushy feeling of security given to them by council houses. Quote Link to comment Share on other sites More sharing options...
iLegallyBlonde Posted June 4, 2006 Share Posted June 4, 2006 Are you on medication ? Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted June 4, 2006 Author Share Posted June 4, 2006 Are you on medication ? No, but you may be when you grow up & realise the signifigance of my post. Quote Link to comment Share on other sites More sharing options...
jonewer Posted June 4, 2006 Share Posted June 4, 2006 Are you on medication ? Needs to up the dose methinks. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted June 4, 2006 Author Share Posted June 4, 2006 Needs to up the dose methinks. The longer you spend living for today & ignoring your debt, the worse it will be as you need to work harder & faster towards the end. Quote Link to comment Share on other sites More sharing options...
theChuz Posted June 4, 2006 Share Posted June 4, 2006 (edited) Of course the ideal situation would be to have an assest income stream which covers all outgoings. You timed things right and you bought housing when it was relativly cheap, you cannot advocate doing it now to completly new people. Housing is not the be all and end all of wealth and as many people will tell you alot of time the house ESPECIALLY today is a liability. When you do not generate a positive cashflow it is a liability, to use _his_ phrase you make your money when you buy the property NOT when you sell it, that is the mentality of a professional BTL'r who will seek cashflow positve properties. Bad debt is obviously bad Good debt is better than bad debt No debt is better than any debt. My debt to society - which i pay everyday is that i tolerate the f*cking idiots around me. Timing Timing Timing Timing Timing. Bad debt - Try to avoid it. Good debt - use it to facilitate being debt free and wealthy, have your exit well planned, have your time limit well defined. Debt free - Maintain your wealth by using other peoples money or being the one who actually creates the money. Edited June 4, 2006 by theChuz Quote Link to comment Share on other sites More sharing options...
iLegallyBlonde Posted June 4, 2006 Share Posted June 4, 2006 This is where Margaret Thatcher really knew her stuff. To get the lazier people up & out to work paying their debt to society, she had to rid them of their cushy feeling of security given to them by council houses. I'm pretty sure this is a wind up and not what any educated person/human being seriously believes ? But just in case, the cushy feeling given to people by council houses was not just given to lazier people but to people who didn't have the advantages you or I have/had in life allowing them even to be able to put down a deposit on a one bedroomed flat nevermind a house. YOU need those people in society, stop looking down your nose at them because one day they will be stitching you back together or wiping your **** or putting out the fire in one of your BTL's. Quote Link to comment Share on other sites More sharing options...
apom Posted June 4, 2006 Share Posted June 4, 2006 There seems to be an overiding feeling amoungst bears on this forum that to be debt-free is a good thing. It's prompted a few thoughts that I wanted to put down for you, some original & some you will have heard before: There is good debt & bad debt. Good debt facilitates the aquisition of assets and is particularly good if the asset grows in value. I don't know any wealthy person that is debt free. I do know average people that are though. Bad debt is accumulated against non-assets, particularly consumables. The debt is obviously built up in a process where the person spends more than they bring in. I know many average people with this type of debt & I agree with them that they should work to get rid of it, but to motivate themselves for that they need to understand how they got the debt & who benefits from them being in debt. An understanding of what the debt really costs them in terms of future opportunities will help as well. IMO the only time you can stand up & proclaim being debt-free is good for you, if when you both own your home and have enough assets to live off for the rest of your life. And what of you who are debt-free, but have no assets? Well I realised today that you're debt is to society who has produced the assets around you that you have grown up with and still use now. Your interest payments are rent, labour, taxes & whatnot. You can actually put a rough monetary value on that debt. If I were you, I'd calculate it today & start working on paying it off! This is where Margaret Thatcher really knew her stuff. To get the lazier people up & out to work paying their debt to society, she had to rid them of their cushy feeling of security given to them by council houses. I have an xbox, a playstation and two motorbikes.. and the love of a beautiful woman.. (in That I know how lucky I am..) Mate we are not taliking about assets we are talking about the speculative market of housing.. and that market the IMF have called time on.. do you honestly believe that I should buy now in an area where price have dropped since 2004.. with the IMF, Mervin King.. Nationwide.. Amex.. all telling me not to...? I mean.. the IMF.. for gods sake.... Debt is something you calculate that you can afford. Quote Link to comment Share on other sites More sharing options...
apom Posted June 4, 2006 Share Posted June 4, 2006 I'm pretty sure this is a wind up and not what any educated person/human being seriously believes ? But just in case, the cushy feeling given to people by council houses was not just given to lazier people but to people who didn't have the advantages you or I have/had in life allowing them even to be able to put down a deposit on a one bedroomed flat nevermind a house. YOU need those people in society, stop looking down your nose at them because one day they will be stitching you back together or wiping your **** or putting out the fire in one of your BTL's. he has admitted that he does not own any BTL's... My parents own a BTL. the banks own his.. he owns the risk.. Good grief people.. he owns no assets.. he has agread that he will pay of X and then he will own the asset.... TTRTR's is on top form today.. I am hiding from the sun as I got sunburned yesterday.. and i am moving to London I hope... .. Yay... Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted June 4, 2006 Share Posted June 4, 2006 It is a bit of a comedy post, but knowing TTRTR I think it's probably mainly a wind-up. However, I think is raises a couple of questions. You don't know any wealthy people who aren't in debt? That to me says a lot about your perception of wealth. The wealthiest people I know certainly have very little or no debt, they OWN their assets (rather than having mortgages on them). But perhaps that's just my perception of wealth. I wonder how much debt the richest people in the world have? Bill Gates, Warren Buffet, The duke of Wesminster. I bet it's relatively little. Your last sentance is basically just a load of old crap. I've said it before and I'll say it again. You have no idea what council housing was like in this country before the 1990s you are using today's council estates and tenants to project your own warped self-congratualtionary view that you are somehow providing some great service that everyone else should be thankful for, and using this forum as a platform to stroke your own ego. It's a bit sad really! Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted June 4, 2006 Share Posted June 4, 2006 You can actually put a rough monetary value on that debt. If I were you, I'd calculate it today & start working on paying it off! I think that's called National Insurance? How about - there is debt, which is bad, speculation, which is holistically a zero-sum game of chance, and investment, which reduces the aggregate burden to society of servicing a given need? I think the best thing about HPC is the near real-time education in how to do less harm than good; it's certainly started lots of interesting new research tangents for me. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted June 4, 2006 Share Posted June 4, 2006 Are you on medication ? If he is, then it doesn't seem to be very effective. TTRTR: How is debt taken on to purchase an asset that depreciates better than saving increasing amounts of money in the bank? Billy Shears Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 4, 2006 Share Posted June 4, 2006 I have an xbox, a playstation and two motorbikes.. and the love of a beautiful woman.. (in That I know how lucky I am..) Mate we are not taliking about assets we are talking about the speculative market of housing.. and that market the IMF have called time on.. do you honestly believe that I should buy now in an area where price have dropped since 2004.. with the IMF, Mervin King.. Nationwide.. Amex.. all telling me not to...? I mean.. the IMF.. for gods sake.... Debt is something you calculate that you can afford. Your full stop key has a stutter! Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted June 4, 2006 Author Share Posted June 4, 2006 Agree. I have other assets which are not houses which generate an income therefore I believe the point that you should own a home is wrong in that any asset is suitable not just exclusively a home as you portray. Agree somewhat, but as you can't predict your future housing costs with certainty, the way to cover those future costs is to own the home. My arguement is that my parents and their parents etc etc helped contribute to the assets this society enjoys today paid with taxes. Rent doesnt come into this becuase a house is not an asset of society unless you refer to council housing then that was obtained through being less fortunate but paid for by taxes. I own houses & rent them out, am I not society? You want what I've got & choose not to provide it for yourself, you have to pay someone in society for it. The workshy should be made to work for their benefit. This is where meanial tasks like litter picking, general street cleaning and other local govt low skilled tasks could be performed by those not working. Tax credits for low paid workers (some single mums for example) is different in that they still carry out a job function but it doesnt pay enough for them to live so ineffect a similar outcome to the workshy carrying out low skilled jobs for the local govt in return for benefit. At least the workshy can say they are doing something instead of just taking which is what I suspect your point is all about with a twist of adding the requirement to own property so you can sell it to us before the crash My point was about council housing. They weren't necessarily given to workshy people, but once people had the security of long-term housing, they became workshy. I watched a program a while back about this. There were people telling the audience that back then, having got your council house meant that you'd 'arrived'. For many of these people, there was nothing else to aspire to once they had that house. IMO this is a large part of why the UK economy continues to move forward as it does, because so many more people are off their butts. --------------------------------------- As for the other posts on this thread, I seem to have mistaken you people for being more intelligent than you show yourselves to be. There is real depth in this idea and you should think about it a little more. Has anyone put a monetary value on their future need/debt to pay off yet? Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 4, 2006 Share Posted June 4, 2006 (edited) I watched a program a while back about this. There were people telling the audience that back then, having got your council house meant that you'd 'arrived'. For many of these people, there was nothing else to aspire to once they had that house. IMO this is a large part of why the UK economy continues to move forward as it does, because so many more people are off their butts. I did more than watch a programme about it, I was brought up on a N.London council estate, between 1953 (when I was born) and 1975 (when I married). Every family I knew there had hard working people in them. They took pride in the fact. Most of their children left school at 15 and went to work, bringing in much needed money into the household, until they married and moved out. Workshy? You've never been more wrong. Edited June 4, 2006 by Casual Observer Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted June 4, 2006 Share Posted June 4, 2006 TTRTR: How is debt taken on to purchase an asset that depreciates better than saving increasing amounts of money in the bank? Haven't you just described the default risk part of any given mortgage issue? Sometimes, making a market is worth taking the odd transactional loss; at today's prices though you'd need big brass ones and bloody deep pockets to play this one out in housing. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted June 4, 2006 Author Share Posted June 4, 2006 I did more than watch a programme about it, I was brought up on a N.London council estate, between 1953 (when I was born) and 1975 (when I married). Every family I knew there had hard working people in them. They took pride in the fact. Most of their children left school at 15 and went to work, bringing in much needed money into the household, until they married and moved out. Workshy? You've never been more wrong. What were they working for at 15? Beer & cigarettes? Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 4, 2006 Share Posted June 4, 2006 What were they working for at 15? Beer & cigarettes? To pay for their share of the house hold expenses and pay their way in life, since they were considered adults back then, at that age. You sound as if you had a pampered, middle class lifestyle, so wouldn't realise. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted June 4, 2006 Share Posted June 4, 2006 Haven't you just described the default risk part of any given mortgage issue? Sometimes, making a market is worth taking the odd transactional loss; at today's prices though you'd need big brass ones and bloody deep pockets to play this one out in housing. "An odd transactional loss"? That's an odd way to describe the potential consequences of buying a house in today's market. It's not like the potential downside of buying a lottery ticket and failing to win anything. Billy Shears Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted June 4, 2006 Author Share Posted June 4, 2006 To pay for their share of the house hold expenses and pay their way in life, since they were considered adults back then, at that age. You sound as if you had a pampered, middle class lifestyle, so wouldn't realise. Quite the opposite & I can honestly say that compared to my upbringing, living on a council estate would have been great. But I also credit my upbringing for making me realise at an early age (about 19-20) that I was on my own & had to provide for myself & not even rely on a job for my security. That realisation is what got me into property & is why I am very close to having enough assets to cover me for the rest of my life which is what this thread is about. Unless you have that, you aren't debt-free IMO. Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted June 4, 2006 Share Posted June 4, 2006 Quite the opposite & I can honestly say that compared to my upbringing, living on a council estate would have been great. So why sneer at ordinary people who started work at 15, to pay their way in life? Quote Link to comment Share on other sites More sharing options...
brassfarthing Posted June 4, 2006 Share Posted June 4, 2006 But I also credit my upbringing for making me realise at an early age (about 19-20) that I was on my own & had to provide for myself & not even rely on a job for my security. That realisation is what got me into property & is why I am very close to having enough assets to cover me for the rest of my life which is what this thread is about. I object to that sanctimonious bo11ocks, even though you would probably regard me an ally in some other ways. Like me, you were fortunate to be able to enter the property market when property was affordable. The last think I want to do is gloat about this to people less fortunate. This is nothing to do with talent or insight or determination or having greater intelligence than anyone else. I'm extremely lucky to have been in the right place at the right time as far as property is concerned, and I do not forget this. Less of the preaching please. Why not do something more useful with your time? Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted June 4, 2006 Share Posted June 4, 2006 It's not like the potential downside of buying a lottery ticket and failing to win anything. Yes, I realise it's morally bankrupt, but it's not my thread, and the thought did pass that this is exactly what it looks like to the debt issuer as well as to the debt market in general; it's a question of perspective; if the mortgage dominates your asset base and you have practically nil diversity in your portfolio as a result, any loss is going to score a bullseye, and at today's gearing ratios it's going to be pretty close to fatal. With the deconstruction of social housing and the speculative elements at play, this has placed an unfair risk of failure on the shoulders of the recent entrant; and precisely this transfer of risk is what will bare its teeth and come looking to take a piece in due course, if history is any guide. Perhaps the equitable solution is to turn housing associations into the market maker of last resort? Who at all times must offer both a buy and ask price to the market? I don't know what the answer is either - but I'm looking; and in the meant time I don't think it's such a bad idea to reduce barriers to entry, rather than rent them out to bystanders. And for the OP's benefit I started work at 15, have a pretty damn good idea of my own discounted cashflow inclusive of future liabilities, and still don't "do" leverage. Which is what he seems to mean by "good debt"; the fat bloke on the other end of the seesaw can break your **** when he steps off, you know... Quote Link to comment Share on other sites More sharing options...
winkie Posted June 4, 2006 Share Posted June 4, 2006 Quite the opposite & I can honestly say that compared to my upbringing, living on a council estate would have been great. But I also credit my upbringing for making me realise at an early age (about 19-20) that I was on my own & had to provide for myself & not even rely on a job for my security. That realisation is what got me into property & is why I am very close to having enough assets to cover me for the rest of my life which is what this thread is about. Unless you have that, you aren't debt-free IMO. I don't agree with everything you say, but I agree that we are all responsible for ourselves and our life is what we make it to be, don't ever rely on others, be strong decisive and do what you think is right without hurting others. What you have never had you will never miss. But if you rise from the bottom, you can then really appreciate what you have made for yourself. Lets just hope more people have that opportunity to do that for themselves. Quote Link to comment Share on other sites More sharing options...
marko Posted June 4, 2006 Share Posted June 4, 2006 No, but you may be when you grow up & realise the signifigance of my post. TTRTR, Ha ha ha ha This topic is one of your best yet! Seriously though....are you on medication? Quote Link to comment Share on other sites More sharing options...
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