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Mew - The New Black

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On this forum MEW is a virtual blasphamy (sp). This is a deeply entrenched old fashioned view me thinks :rolleyes: .

I think the time has come to re - visit MEW and dust - off its tarnished image.

Whilst I recognise it can be a problem for those where affordability is an issue and MEW is used as a lifestyle prop, for many of us MEW is the perfect tool for 'wealth building'.

I have a big IO mortgage and no intention of repaying for some time. Why spend the comming years chipping away capital (yawn) when there are so many exciting investments to be had?

Give MEW a break I say and get investing B) . There will be plenty of time and resource to repay capital in the future.

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On this forum MEW is a virtual blasphamy (sp). This is a deeply entrenched old fashioned view me thinks :rolleyes: .

I think the time has come to re - visit MEW and dust - off its tarnished image.

Whilst I recognise it can be a problem for those where affordability is an issue and MEW is used as a lifestyle prop, for many of us MEW is the perfect tool for 'wealth building'.

I have a big IO mortgage and no intention of repaying for some time. Why spend the comming years chipping away capital (yawn) when there are so many exciting investments to be had?

Give MEW a break I say and get investing B) . There will be plenty of time and resource to repay capital in the future.

I guess it all boils down to the individuals personality.

For me to gamble my home is an anathema - for you clearly not.

Time will tell. Hopefully we'll both be OK.

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Time for a graph, i half agree with dogbox when mew is rising and set to rise for the long term definatly jump in, lots of 'free' money and investments to put it into, MEW rising seems to indicate the start of a bubble.

However when it has peaked and dropped violently, and seen a small bounce back something is wrong. Infact if MEW is 9% of the entire post tax income of the UK something is wrong....

Data is from the BOE website....

MEWIncome..JPG

post-552-1152096121.jpg

Edited by moosetea

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Infact if MEW is 9% of the entire post tax income of the UK something is wrong....

None of us know 'something is wrong'. Perhaps people are just more inclined nowadays to get thier bricks and mortar working for them rather than just sitting there. Times are changing. People cant rely on traditional pensions so look to leveredge for thier retirment pot.

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On this forum MEW is a virtual blasphamy (sp). This is a deeply entrenched old fashioned view me thinks :rolleyes: .

I think the time has come to re - visit MEW and dust - off its tarnished image.

Whilst I recognise it can be a problem for those where affordability is an issue and MEW is used as a lifestyle prop, for many of us MEW is the perfect tool for 'wealth building'.

I have a big IO mortgage and no intention of repaying for some time. Why spend the comming years chipping away capital (yawn) when there are so many exciting investments to be had?

Give MEW a break I say and get investing B) . There will be plenty of time and resource to repay capital in the future.

Using cheap credit, including MEW is not a bad thing if it is invested in decent investments and can generate more wealth.

Companies borrow to invest.

However most people it seems MEW to either fund consumption or pile into more housing.

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Leverage works for companies because of the tax implications (interest is a cost, dividends aren't)

For an owner-occupier, no tax break. You really have to know what you are doing to beat the mortgage rate after tax consistently.

Mortgage rate = 5% say, so a 40% taxpayer would need to be looking at 8.33% return at the margins. Gets complicated by CGT allowances etc - but even so, you need to have your head examined, if in your retirement portfolio you don't have room for a risk free investment of 8% or so... (as capital repayment reduces your IO)

The people I know on IO (as big bonus component to salary) do exactly this - their annual bonus mostly goes to reducing the capital outstanding, because the investment is pretty much a no-brainer. After putting maximum amount allowed into a pension for the tax benefits thereof too.

In investment, never look a gift horse in the mouth. And if the gift is the 40% tax rate, take it and run. Yeah, sure, you might be able to make 10-12% somewhere else, and with some of your money do so. But that becomes 6-7% after tax, maybe even down to 5% after charges costs. and for the risk/ reward you are better off reducing your borrowing

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Just curious, what type of speculative investment is worth looking at? , nothing that pays a proper cash flow positive return at the moment.

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On this forum MEW is a virtual blasphamy (sp). This is a deeply entrenched old fashioned view me thinks :rolleyes: .

I think the time has come to re - visit MEW and dust - off its tarnished image.

Whilst I recognise it can be a problem for those where affordability is an issue and MEW is used as a lifestyle prop, for many of us MEW is the perfect tool for 'wealth building'.

I have a big IO mortgage and no intention of repaying for some time. Why spend the comming years chipping away capital (yawn) when there are so many exciting investments to be had?

Give MEW a break I say and get investing B) . There will be plenty of time and resource to repay capital in the future.

Exactly the sort of attitude that fuels a speculative bubble such as we see before us. It will all end in tears, but you'll never believe it until it's happened.

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Exactly the sort of attitude that fuels a speculative bubble such as we see before us. It will all end in tears, but you'll never believe it until it's happened.

Aquaintences that began B2Ling in the early to late nineties have produced very significant returns that gave them financial independance they would not have achieved had they just stuck to gradual mortgage repayment. I didnt do too badly myself. With hindsight such risks appear to be obvious no - brainers, but at the time they didnt feel that way at all.

As for now, MEWing to fund business start - ups, foreign offplan and other property investments, even carefuly selected shares and funds.

Nothing is without risk and returns can never be guaranteed, but I didnt want to get to 50 saying 'I wish Id had a stab'.

A freind has made very easy money buying off - plan abroad. Even in tired old Spain he made 90000 euros in 9 months in 2003 on each property, yet he only contributed a smallish deposit so his exposure was minimal B) yet his profit was based on the full value of the property contract. Spain isnt an easy bet now but plenty of places are. All it takes are smallish deposits. One guy I know has been doing this in Turkey for just over 3 years. His returns have been over 40% pa just by putting deposits on off - plan property then selling the contract on at a later date.

Another guy I know has just retired after selling his games distribution business. He always had the maximum mortgage and concentrated on investing (especially in his business). Upon retiring he cleared his mortgage easily and put a few million in the Bank.

He says he would have been a great deal poorer had he diverted precious resource at repaying his large mortgage.

Its worked for me so far, but I take nothing for granted.

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Its worked for me so far, but I take nothing for granted.

I think this is your most illuminating comment. If it continues to work for you and you manage to fund your adventures/income/retirement for the years ahead then I would say well done for spotting the opportunies.

MEW won't be the new black because 99% of the British population don't have anything like enough financial intelligence to manage such investment juggling.

From:

http://www.timesonline.co.uk/article/0,,2095-2241798,00.html

Britons owe £1,191 billion, equivalent to more than 95% of the UK’s gross domestic product, but £999 billion of that is accounted for by mortgages. Of the remaining £192 billion of consumer credit, £56 billion ..... is owed on credit cards.

All the 'good' times since Labour came to power in 1997 have directly or indirectly come from borrowing. Whether it is the Government or the individual, our economy is not making nearly enough money to pay for the debt that low interest rates have fuelled.

I once had a £600 loan that I paid off as quickly as I could. I hated having the loan hanging over me and it was a relief to get shot of it. Even such a modest amount took me months to pay back.

Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,109 per average UK adult at the end of April 2006.

This has grown 52% in 5 years.

Britain's personal debt is increasing by ~ £1 million every four minutes.

Link

This proves to me that the majority of the population can't be trusted to MEW or use their credit cards without considering that one day the money will need to be paid back. Dogbox, you are in a very small minority.

Xil.

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Aquaintences that began B2Ling in the early to late nineties have produced very significant returns that gave them financial independance they would not have achieved had they just stuck to gradual mortgage repayment. I didnt do too badly myself. With hindsight such risks appear to be obvious no - brainers, but at the time they didnt feel that way at all.

As for now, MEWing to fund business start - ups, foreign offplan and other property investments, even carefuly selected shares and funds.

Nothing is without risk and returns can never be guaranteed, but I didnt want to get to 50 saying 'I wish Id had a stab'.

A freind has made very easy money buying off - plan abroad. Even in tired old Spain he made 90000 euros in 9 months in 2003 on each property, yet he only contributed a smallish deposit so his exposure was minimal B) yet his profit was based on the full value of the property contract. Spain isnt an easy bet now but plenty of places are. All it takes are smallish deposits. One guy I know has been doing this in Turkey for just over 3 years. His returns have been over 40% pa just by putting deposits on off - plan property then selling the contract on at a later date.

Another guy I know has just retired after selling his games distribution business. He always had the maximum mortgage and concentrated on investing (especially in his business). Upon retiring he cleared his mortgage easily and put a few million in the Bank.

He says he would have been a great deal poorer had he diverted precious resource at repaying his large mortgage.

Its worked for me so far, but I take nothing for granted.

You describe nothing here but speculation and the only trick with speculation is not to be the last man speculating. As long as there is someone out there who thinks that your investment is worth more then you paid for it then you will win.

Eventually by this sort of investments very nature there will be the last person who sees the investment as having increased. This is the last man holding.

DO NOT BE THAT MAN..

All speculative markets fail, and everytime a new group of investors learn some very old lessons.

The critical word was "Everytime".. That is a point that can only be argued by some new investors yet to learn the very old lessons...

Investments there is right time to buy, and a right time to sell… and there are certainly wrong times..

Be careful out there..

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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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