Who Else Has Zero Borrowings

[vfr]

two bumps in a day so my apologies. it's just there were so many good responses from fellow hpc- ers newbies might enjoy the read apologies to the verterans. each reply becomes more relavant by the day.

[FLASH_2007]

I have lots of debt over 20 credit cards personal loans etc all on low interest rates but I hold liquid assets that far exceed these debts including gold, silver aggricultural etfs, cash and stocks. In an inflationary environment it makes sense to be in debt because the value of these debts are eroded away and the assets increase in value. This makes sense as long as you don't buy overvalued assets like property. If the credit dries up due to the credit crunch I will pay off a significant amount but at present I am happywith this strategy.

[Nelly]

I owe f*ck all to anyone, my bank gives ME money every month its great

[ezkay]

A long way from being debt-free!!!

Graduated 4 years ago with £30k+ debt - a lengthy degree and partly self-funded.

However, will be debt-free by November 2009. Interest rates on debts all low-ish - student loans & professional development loans taken out at the right time, etc.

Saving £650 pcm, so should have £50k (incl. £20k bequest) to put on a house the day that loans are paid off. Or will keep on ploughing it into savings, depending on what the housing market looks like. I know I should pay my debts off first... But the difference between interest added to debt and interest earned on tax free savings (NS&I) is not huge and I figure a big deposit will save me heartache later on.

No further debt incurred since university. I learned my lesson there

Edit: sp

Edited November 15, 2007 by ezkay

[OzzMosiz]

No debt (though overdrawn a bit), 5 figure savings (no pence included ).

>35K per year earnings (new job last month), but I manage to save F ALL recently.

£160 a month into pension (company adds £240)

Rent £625, bills (excluding food) £240, Petrol 220+

[Trixta]

Managed debt and leverage can be a very lucrative thing if used wisely....

[Djinn]

Which card is that then Purple?

I thought all the CC currently on the market had tie ins, I.e. we get 1% on the first £2k but then it drops to 0.5% Card is Morgan Stanley.

I used to have the Morgan Stanley card, but I think American Express gives back more (5% cashback for first 3 months) then 1.5% if you spend over £10000...

See here.

I use it for absolutely everything and pay the balance off each month. I got £230 in cashback this week

[twatmangle]

No debts at all.

Diverse savings and investments. Income from investments covers most of monthly expenses. Therefore most of salary gets invested.

[Solitaire]

I own my own home outright. Haven't had a credit card for 20 years and have no debt. I have a low income compared to the average but can double it if needs be. What I do have is peace of mind, plenty of free time and a rewarding life.

A rich person is not one who has the most,

But one who needs the least.

[davidg]

I pay cash for everything.

Me too, even my house.

[adren]

I AGREE with most of this.

People feel safe, because so many are folk are in the same boat.

REALITY: When the boat starts leaking, it will sink faster with so many onboard

I have a 70% debt on two properties in Hong Kong,

but I can pay it off in the blink of an eye by pulling cash out of my trading account.

The debt is there as a wayy to be short the HK$ (which is linked to the US$.)

I keep my cash in Canadian $, and most of my stocks are quoted in C$ also

Hi Bubb

sorry, this is off-topic.

I am emigrating to Canada.

Should I xfer UKP to CAD ASAP? Or wait a while?

I'm thinking ASAP!

[Guest vicmac64]

I'm one of the zero borrowings brigade too.

[BufferBear Bitcoin Bull]

We (me) are in debt to the tune of £328.30. I will pay off the credit card this month as my 0% deal has finally run out and they want £6.64 interest!! Generally I save 40% of my income to go towards our deposit. All in all, we have saved hard and now have a very healthy deposit despite having 2 young children. No point losing our deposit by buying now. We haven't always been in such a fortunate position.

Edited November 15, 2007 by Buffer Bear

[tigsrenting]

I like to pay cash also. I just dont like the idea of every transaction recorded. I don't like using the Tesco clubcard either as it logs every item you buy. People annoy me farting around for their credit card ahead of me in the checkout. When I make a big purchase and place the cash on the counter I always get some stupid comment. Builders however love cash.

[Fuchsia]

I'm only making about £15.4k at the moment, and I'm managing to save about 75-80% of it. I don't have any real rental outgoings as I live with my parents and just contribute towards bills, so that helps! I have about three times my salary in savings, and despite obsessing about saving money, I buy everything I really feel I want.

I'm trying to save enough money so that if house prices fall a decent amount over the next few years, I'll be able to buy somewhere cheap in cash in the slump. I think it's an ambitious aim, but I don't think it's unrealistic with how much I'm managing to save. I hope the crash happens, and preferably a little bit slowly for my sake, as I need to save up as much as possible beforehand!

[Guest Charlie The Tramp]

I never borrow, only lend, hopefully at punitive rates of interest.

[Compounded]

No borrowing all my life except mortgage until DIVORCE

Then car loan, overdraft, cards and another blo*** mortgage

Read Millionaire Next Door 2002

4 years later no debt with a little bit of help from a property developer who bought a chunk of the garden (negociating price with him was steep learning curve)

House now owned outright

Thought about BTL in researching that I found this wonderful site.

Now saving in gold and keeping minimum in poxy pounds

I owe you all alot because you are the reason I did not become a BTL (borrow to lose) investor

Edited November 16, 2007 by Compounded

[headmelter]

I have zero borrowings.

I did have a mortgage, but I sold up.

Never had a credit card.

I pay cash for everything.

My reasons for this are that for the last 20 years I've been constantly working for companies that: lay me off, downsize, relocate, get bought out, concentrate on their core business, close down my section/part/department, liquidate, give up.....

So I live on the basis "If I go to work today and that's it ..... it won't be a shock and I'm not in over my head on anything" - and it is a good job I've done that because on average it's happened 2-3 times every year since 1986.

Ever thought of getting a new career?

[Dubai]

I'm no big earner but:

- No debt whatsoever

- No credit card (only the corporate Amex)

- Savings increasing by 225£ per month on a 6% isa. I know it's little for most of you big shots but then

...I own a house outright with wood and an acre of land in the Alps (Italy), And I'll retire there.

- No mortgage

- Enough disposable income to allow me to eat out every night (which I don't do anyways).

In my ancestors' culture, debt is shameful. I agree.

Debt was also shameful in my ancestors culture. In fact, it was shameful in my Father's culture. Borrowing money was at the top of the list of "things not to do", just above murder. It was a "low" thing to do.

I'm English, for the record.

[Mr Nice]

dogbox:

Without wishing to sound rude, why should I ‘square this’? What my wife and I chose to do was to minimise and subsequently eliminate our debts as soon as possible. Once that was done we decided we could then build some financial security. Our entry into the housing market was purely fortuitous, we had the ability to buy with a decent deposit and renting had become more expensive than buying with a mortgage. Our purchase had nothing to do with investment or speculation, just the wish to secure a roof over our heads.

What you have chosen, from what you posted above, is to build wealth by investing in housing. If the figures work out for you then I wish you luck and hope you succeed. You have set a goal, in terms of retirement, that is different from mine. My wife and I are both in our early 40s, with probably 20 years of work yet. We aim to retire on an income of £50,000 per year in real terms — excluding our pensions — and are now able to save £3,000–£3,500 per month; before now any spare cash went into the mortgage. For us — being somewhat risk averse — elimination of debt was paramount. For you, undoubtedly more financially sophisticated than me, debt is a tool for increasing your wealth. As I have written, I wish you luck and hope you succeed.

not that I am trying to be nosey, but when you say you are saving 3k a month, what types of things do you save in?

I really am just wondering what a cautios approach to savings would be.

[Super Mario]

Hi Bubb

sorry, this is off-topic.

I am emigrating to Canada.

Should I xfer UKP to CAD ASAP? Or wait a while?

I'm thinking ASAP!

Me too - around april / may next year.

I'm not an expert, but my current plan is to do this with my cash:-

1/3 = 6M Forward deal (probably in the next few days as GBP/CAD has gone back up to just over 2$)

1/3 = Option at todays rate (same as above) - i've been quoted around 3% of the total hedge for this.

1/3 = Will just use the SPOT rate in 6M time, whatever that may be - or leave it in GBP if it's really bad

My current feeling is that GBP will weaken against the CAD$ in the long term - however in the next 6M I don't really have any idea; interest rate direction isn't exactly clear in either country (tho CAD's has been stable for a long time now, with just one rise in the last year).

However I've also been told (by people who do know) that some (but not all) of the current strength AUD/NZD/CAD is based on speculation. Not sure how true this, however I'm willing to take some risk hence the strategy above.

SM

Edited November 16, 2007 by Super Mario

[Patrat]

not that I am trying to be nosey, but when you say you are saving 3k a month, what types of things do you save in?

I really am just wondering what a cautious approach to savings would be.

Until recently we didn't have that much money to save each month, it went into the mortgage. Our ISAs were the main vehicle for saving. Now it's a bit of a problem to work out where to put our savings so that it will get returns that beat RPI inflation.

For the last 4 years we have saved cash in mini ISAs and online accounts, my wife put money in Legal & General trackers Mini shares ISA & I used my mini shares ISA to buy shares on a HYP basis, buying 2 shares each year. Our plan is to continue buying HYP shares, reinvesting the income and hoping after 20 years that the income will be enough so that we don't have to rely on our NHS pensions if they are devalued by the Government. Next year we will stop using mini-ISAs, have 1 maxi ISA each and thus be able to save £14,400 between us. The aim will be to buy 7 shares per year.

The Cahoot & ING accounts have £35,000 (mainly gifts/bequests) in them but we haven't added to them as the Northern Rock business has scared us away from banks. Currently, we are saving cash in our local building society, National Counties. As a higher rate tax payer, I have bought National Savings certs before but now am putting significant amounts of money into them. I did think about buying gold from 2003/4 onwards, but never had the money; our ISAs came first, some cash was put on deposit and then any left over put into the mortgage.

Currently, our schedule is:

1. ISAs

2. Building Society

3. National Savings Certs (for me)

However, don't take investment advice from me as it's probably completely wrong!

[winkie]

Zero borrowings - no mortgage debt and CCs paid off monthly in full. I concur with all your reasons, debt is horrible, it gives others power over your life.

Same here, no debt gives you freedom, empowerment, and the ability to control your own life.

[superbrugha]

Last night I put 6110 pounds into my offset account clearing my mortgage then went out for dinner.

It tasted pretty darn good

[Tiger Woods?]

The only thing I need persuading on is that they will cut rates fast once HPC arrives. Isn't it possible that they will see ahead of time what this approach does in the US - ie crash the currency and lead to hyperinflation? People's views on this would be much appreciated as it is my current mind-puzzle.

My concern is that this is exactly what they will do - better to inflate away the debt of the masses (and empty their pension funds without them realising it) than have riots in the street. The 6 of us with positive net savings aren't really going to be able to kick up much of a fuss are we?

Edited November 16, 2007 by D'oh