Who Else Has Zero Borrowings

[sirius]

£9.3k loan - £240 a month, finishes Oct2010

student loans - £107 a month until Apr2011

about £2,200 on credit cards - probably paid in about 2 years

a couple of hundred quid on HP for a fridge and telly paid off very soon but pretty much peanuts (£40 a month)

no savings, no assets, no pension.

[Patrat]

Patrat you have taken the cautious route, fair enough, but how do you square this…

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.

[meow]

I agree completely with a lot of sentiments expressed on this thread and I too was also brought up to believe things such as "if you don't have the cash you can't afford it" etc... It seems like the true meaning of affordability and ownership have been completely forgotten by a lot of people either a) to keep up with the jones's, or worse b ) in order to sustain a standard of living they can't admit to themselves that they can't actually afford.

The concept of affordability has changed from what you can readily and/or easily spend outright, to what a bank says you can pay back given a current climate of low rates. Further, the concept of ownership his become very muddled with the concept of simply possessing something, most of the debt junkies make this terrible mistake; because they live in a 5 bed house somewhere nice and have 3 X5's on the drive they think they are doing well because they "own" them.

None of this really surprises me though as the banks will be clever enough to realise that they make more money from borrowers than savers.

Edited August 9, 2007 by meow

[dogbox]

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.

Patrat I'm 40. Given a lot of blokes are dead by 65 I sure as heck don't want to work another 20 years, so perhaps I lack the patience you have.

Hare and Tortoise stuff I guess.

I used to be a Tortoise, using only ISAs and other packaged investments, but I felt I could do a better job being more proactive.

[intrepid]

No debts or borrowings here either.

Mortgage paid off last year, mostly financed by overpayments ( company had virtually unlimited overtime budget). I guessed it wound'nt last forever so made hay while the sun shone.

Regards

Rob

[ScaredEitherWay]

I want to retire on say £70,000 pa (in today money) by age 50 - 55.

I'll feel happy and smug if I get £7,000 pa in today's money when I retire at 65.

Hoping for £10k, but no idea how to get that much.

Banked cash from house sale. Planning on buying a modernish 1-bed house (cheap running costs/low maintenance) once I get a job and feel I will be around this area (or whatever area) long enough to actually buy.

No pension. No investments.

Just started my first ISA with £3k out of my house-sale pot.

House sale money spread across a few high interest instant access savings accounts because I don't understand anything else and have no idea when I will randomly choose to buy a house

Edited August 9, 2007 by ScaredEitherWay

[vfr]

So if you lost your job today what is your liquidity and how far would HPC have to go to affect you?

For me now I have 24 months money and no mortgage.

If however I had not sold .

I would have had 2.3 months money and my HC index would be 40% , so I could've handled a 40% loss on todays prices.

Whats your liquidity in months and HPC index if any?

[Mr Yogi]

Have you noticed how everyone else is paying with a card ? when im out shopping i seem to be the only one paying with cash.

I use cash for everything. . Fortunately most of my customers pay me in cash.

If I'm flush, we eat well.

If I'm skint, it's beans on toast.

One thing that always gets me when I'm paying for a big trolley-load in Tesco's with a wad of twenties; what's with this Club Card thing?

Why would I want Tesco's knowing all about my spending habits? Is the information shared with HM Revenue & Customs to check on peoples' expenditure and to see if it tallies with their declared income?

It wouldn't surprise me! Needless to say, I don't have a Club Card!

Do other people find it as sinister as I do?

[gravity always wins]

Do other people find it as sinister as I do?

V SINISTER - totally agree

[jonpo]

I have no debts/libilities. my only assets are M1 demand deposits (e.g current accounts other monies of zero maturity) the only debt I take on is to borrow shares/overvalued currencies in order to trade in the blink of an eye (in minutes mostly at european open and US close).

I have 3.5 years of bills in luquid cash and can downsize my rented accomodation at 2 months notice.

in short I cannot think how to increase my financial liquidity short of buying a safty deposit box and stuffing it full of cash.

[Eeyore]

I use cash for everything. . Fortunately most of my customers pay me in cash.

If I'm flush, we eat well.

If I'm skint, it's beans on toast.

One thing that always gets me when I'm paying for a big trolley-load in Tesco's with a wad of twenties; what's with this Club Card thing?

Why would I want Tesco's knowing all about my spending habits? Is the information shared with HM Revenue & Customs to check on peoples' expenditure and to see if it tallies with their declared income?

It wouldn't surprise me! Needless to say, I don't have a Club Card!

Do other people find it as sinister as I do?

Tell everyone on a public forum how you avoid tax and then worry about Tesco knowing your shopping habits.

[ScaredEitherWay]

Difficult to say how long it would last.

Depends on interest rates earned, inflation and how frugally or not I live.

But, it would be possible for me to never have to work again. But that would be just getting by and not "living".

However, I will be working. Got 2 interviews in the next week.

I've also got a small income from the internet. Which I must develop further. At the moment it covers my rent and basic foods. But I was only playing around when I built that. Must get a full sized PC in the next month and take that to the next level.

[Mr Yogi]

Tell everyone on a public forum how you avoid tax and then worry about Tesco knowing your shopping habits.

Who avoids tax?

There is nothing illegal in using the cash received in the course of one's business for one's own expenses so long as records are kept.

There is no law that says that cash must be paid into a bank account.

I keep meticulous records and my accountant completes my tax return in the normal fashion.

I pay my income tax - in cash!

Apology please

[quangolicious]

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.

You get 1% cash-back on an Egg Money card and I've not encountered any catches. You can even set it up to automatically have the total outstanding balance paid off each month automatically, which is rare with credit cards as they seem to rely on people forgetting to pay on time to make their profit.

[Fishfinger]

Mortgage paid off in Jan(we reckon we've saved £70K in dead money), cc paid off each month, 10 year old car, holidays in this country, no kids.

Our biggest expenses per month are train travel for work - £90 each, council tax £120, food £200 (and that will come down when the allotment comes online). My biggest "expense" is savings!

I have no pension (I'm 41) but given we're low maintenance I can't see the point. I don't intend to "retire" rather fade out gracefully by working a few days a week into my '70's (probably gardening).

[Downtraded]

Had a 150K mortgage until June this year. We've now downtraded with no mortgage.

My wife and I talked about it and initially she was really against selling - the house is (was!) really nice. Everything you could want really. She took a lot of persuading.

Anyway, I won her over and now, we both can't believe how fast the sentiment has turned. I now realsie we were lucky to sell.

Amazingly, we are happier in the new house - much more than we would have believed - The kids love it too.

We put it on the market in Jan this year - 3 weeks later (and no interest) we decided to reduce by 10%. People thought we were stupid and in the end we accepted an offer a week later for slightly less.

It took 3 months to complete and it was quite difficult to keep "face" as it did look to all that we were desparate to sell. Its not a nice experience and they say pride comes before a fall. Downtrading is not an easy thing for your peers to "accept".

We did look at renting but in truth, we could not find something that was suitable in the area for a suitable cost.

Maybe you can find a 4 bed house in your area for 1.5K per month but we couldn't - unless you wanted your kids to grow up in a bad area.

Anyway, we took the middle path - downtraded with no mortgage - I feel now that I'm "saving" £1K a month - just by not paying a mortgage.

I can't believe that what I held as important in the last house has been revealed to me as just vanity.

I recommend to all that have a big mortgage, DOWNTRADE NOW. You will be glad you did. I feel now that I'm "saving" £1K a month - just by not paying a mortgage. Even after 2 months, it has made a HUGE difference.

[winkie]

Had a 150K mortgage until June this year. We've now downtraded with no mortgage.

My wife and I talked about it and initially she was really against selling - the house is (was!) really nice. Everything you could want really. She took a lot of persuading.

Anyway, I won her over and now, we both can't believe how fast the sentiment has turned. I now realsie we were lucky to sell.

Amazingly, we are happier in the new house - much more than we would have believed - The kids love it too.

We put it on the market in Jan this year - 3 weeks later (and no interest) we decided to reduce by 10%. People thought we were stupid and in the end we accepted an offer a week later for slightly less.

It took 3 months to complete and it was quite difficult to keep "face" as it did look to all that we were desparate to sell. Its not a nice experience and they say pride comes before a fall. Downtrading is not an easy thing for your peers to "accept".

We did look at renting but in truth, we could not find something that was suitable in the area for a suitable cost.

Maybe you can find a 4 bed house in your area for 1.5K per month but we couldn't - unless you wanted your kids to grow up in a bad area.

Anyway, we took the middle path - downtraded with no mortgage - I feel now that I'm "saving" £1K a month - just by not paying a mortgage.

I can't believe that what I held as important in the last house has been revealed to me as just vanity.

I recommend to all that have a big mortgage, DOWNTRADE NOW. You will be glad you did. I feel now that I'm "saving" £1K a month - just by not paying a mortgage. Even after 2 months, it has made a HUGE difference.

I agree entirely.

[Sour Mash]

I can't believe that what I held as important in the last house has been revealed to me as just vanity.

I recommend to all that have a big mortgage, DOWNTRADE NOW. You will be glad you did. I feel now that I'm "saving" £1K a month - just by not paying a mortgage. Even after 2 months, it has made a HUGE difference.

Well done - you still own a house and are now mortgage free. Think what you can do with the money you save each and every month from now on.

And no worries about having to meet the mortgage payments either - so your house is safe. It's an enviable position to be in.

[Goldfinger]

I have zero debt.

EDIT: Except for a credit card where I pay the full balance very month.

Edited August 20, 2007 by Goldfinger

[antwacky]

Same here - no debt. Holding on to savings until HPC.

Am going to buy a small caravan this month and put it on a farmer's field in Cheshire, just like my sister: £1000 ground rent a year and £1000 to buy caravan.

Edited August 20, 2007 by antwacky

[Austin Allegro]

No debts and c. one years' net salary in the bank. Rent is about one third of net salary. No car, only 15 year old bicycle. Main expenses are holidays, going out with girls and buying one made to measure suit a year. So fairly cash rich but asset poor.

Just a note on clubcards. I don't trust these either - the supermarkets know exactly when and where you shop and what you buy and give your name and address to all sorts of people.

They only seem to pay about 1%. I gave up using mine, because I realised I only got points on stuff I wouldn't normally bother buying. You never get extra points on things like economy baked beans and bulk toilet paper!

Also, the company I work for charges c.£2.00 for every address sold from its database for just one use (with permission of course) to other companies. Your name and address is a commercial asset and these cards do not sufficiently reward it IMO.

[dellboy]

Tesco Credit Card gives fairly good money back to spend at Tesco. The APR is irrelevant as the balance is always paid off. The Data Protection Act means they are not allowed to monitor your spending habits without permission. They can throw it together for statistical purposes and the club card computer may print out a discount voucher based on your shopping habits. Ofcourse, if the tax man had an eye on you, that would all be opened up for them.

You're in much greater danger of someone in the post office or some bin-raider picking up your details and attempting to open accounts in your name. Even then, a call to the police and a credit check agency deals with that.

[goonboy]

Just a note on clubcards. I don't trust these either - the supermarkets know exactly when and where you shop and what you buy and give your name and address to all sorts of people.

There was a case a while back where a US supermarket was being sued from someone who slipped over in their store.

The supermarket used the info it had from it's "loyalty" scheme to show the bloke bought a lot of liquor as a defence...

[dirge]

£250 left on the car loan I got, didn't get finance, paid most cash and a small bank loan.

£250 a month put into a high interest account.

£23k savings

Currently £0 on credit card, pay it off twice a month, use it for online protection etc.

Currently £600 into overdraft, my fault had a shit couple of months, three weddings a month atm costing a fortune lol, won't dip into savings to bail out my overdraft, need to use it as a lesson learnt.

On 30k a year and honestly don't know how people manage on less, I must be that bad with money!

[Garry AKA Pod]

£250 left on the car loan I got, didn't get finance, paid most cash and a small bank loan.

£250 a month put into a high interest account.

£23k savings

Currently £0 on credit card, pay it off twice a month, use it for online protection etc.

Currently £600 into overdraft, my fault had a shit couple of months, three weddings a month atm costing a fortune lol, won't dip into savings to bail out my overdraft, need to use it as a lesson learnt.

On 30k a year and honestly don't know how people manage on less, I must be that bad with money!

I imagine you pay a lot for your rent/mortgage then cos I earn circa £21k and manage to save £450 a month. I manage fine on my money.