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Turnbull2000

Metro - 'wealthy' Young Adults Drowning In Debt

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Love this quote - about the only logical comment in the entire article:

The authors warned that, when increasing incomes were used to pay off increasingly large mortgages, it was debatable who actually benefited.

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The booming property market is also prompting many to rely on their homes in old age rather than a pension.
Given current trends, does this mean these people have blown their pensions?

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Given current trends, does this mean these people have blown their pensions?

Don't you know, there is no such thing as pension anymore Brownies nicked it all and wants to work us all til we drop, hence no need for pension.

Jesus if we'd nicked the pension fund, we'd be in Strangeways quicker than lightening.

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An old story: Asset rich. Cash and cash flow poor.

Such wealth may prove illusory, and melt away, if/when property prices fall,

leaving behind the debt, and a few memories, and, maybe, alot of bitterness.

("If only I had sold when prices were high...")

EXCERPT:

"The average value of property owned by 25 to 34-year-olds in 2005 was £167,000 – more than double the £65,000 in 1995.

But their average personal debt was £4,600 – almost double the amount it had been a decade earlier.

And, at £94,000, their average mortgage debt had nearly doubled.

The booming property market is also prompting many to rely on their homes in old age rather than a pension."

I SEE: Danger, danger, danger.

Does anyone really think those Pds.167,000 properties are any nicer than the Pds.65,000 properties?

And if property loses 44% of its value, they will be trapped in negative equity, with a cash flow problem,

and no pension. And these are average figures. Many will be struggling with negative equity with a price

drop of far less than 30 or 40%.

Rather foolish IMHO.

£94K, thats nothing compared to the average house debt in London, they are looking at like debts of about at least £200K for a mortgage and 10s of thousands on other kinds of debts. I fully expect London to be the earthquake epicentre when it comes to debt coming crashing down.

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Don't you know, there is no such thing as pension anymore Brownies nicked it all and wants to work us all til we drop, hence no need for pension.

Jesus if we'd nicked the pension fund, we'd be in Strangeways quicker than lightening.

does "nicked it all" mean removing the 10% tax efficiency on dividends?

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Its terrific when you start getting proved right isnt it :P

.

I live in SW4 London. HPI Epicentre of the UK.

.

All around me people I know are mortgaged / loaned up to their eyes

in order to sustain a lifestyle they actually cant afford. I earn more than

many of my contemporaries but you would not know it to look at them.

.

I have a small amount of student loan debt <5k but appart from that I

am beholden to nobody. I rent cheaply and live well but within my means.

.

Happy as Larry,

.

ST

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I liked the way they managed to stick in a few credit card ads midway through the article(probably aimed at the very 'wealthy' young, who the piece talks about).However, there is no evidence of credit tightening, if the ads are to be believed..still plenty of 0% offers going around by the looks of it..

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Its terrific when you start getting proved right isnt it :P

.

I live in SW4 London. HPI Epicentre of the UK.

.

All around me people I know are mortgaged / loaned up to their eyes

in order to sustain a lifestyle they actually cant afford. I earn more than

many of my contemporaries but you would not know it to look at them.

.

I have a small amount of student loan debt <5k but appart from that I

am beholden to nobody. I rent cheaply and live well but within my means.

.

Happy as Larry,

.

ST

Nicely put Super Ted

Enjoy your ring side seat for the main event :lol::lol::lol:

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It's actually a really clever way to get the young to pay for the old without taxing them directly.

Now the young will be trapped paying "debt" for decades and the cash can go towards hip replacements etc, with the city boys creaming off the top. Most young people will fall for it, having been "educated" in public schools and therefore are completely unable to think.

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Guest mSparks
A little bit of doublethink there.

Gast, first doublethink, then summery executions of the over 60s, we live in a sifi world!

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It's actually a really clever way to get the young to pay for the old without taxing them directly.

Now the young will be trapped paying "debt" for decades and the cash can go towards hip replacements etc, with the city boys creaming off the top. Most young people will fall for it, having been "educated" in public schools and therefore are completely unable to think.

Only a small minority of people in this country attend public schools. Or do you mean state schools?

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Only a small minority of people in this country attend public schools. Or do you mean state schools?

All schools are state schools. Some of them make a profit for private investors, but yeah I meant the directly controlled state schools, not the indirectly controlled state schools.

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Why is it doublethink?

If someone's gone from having 50k equity in a 100k property to having 200k equity in a 400k property then he's got more equity "wealth" and more debt. The two aren't mutually exclusive.

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All schools are state schools. Some of them make a profit for private investors, but yeah I meant the directly controlled state schools, not the indirectly controlled state schools.

Or indeed the public private schools. :unsure:

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Why is it doublethink?

If someone's gone from having 50k equity in a 100k property to having 200k equity in a 400k property then he's got more equity "wealth" and more debt. The two aren't mutually exclusive.

Yes but as Mervyn King said in his most quotable line so far, "House prices are a matter of opinion. The debt is real." :)

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I liked the way they managed to stick in a few credit card ads midway through the article(probably aimed at the very 'wealthy' young, who the piece talks about).However, there is no evidence of credit tightening, if the ads are to be believed..still plenty of 0% offers going around by the looks of it..

With huge arrangement fees attached.

:lol:

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Yes but as Mervyn King said in his most quotable line so far, "House prices are a matter of opinion. The debt is real." :)

Yep, they could find themselves with all the debt and none of the wealth. Here and now though, in theory they've got both debt and wealth.

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Why is it doublethink?

If someone's gone from having 50k equity in a 100k property to having 200k equity in a 400k property then he's got more equity "wealth" and more debt. The two aren't mutually exclusive.

Their so called equity wealth is an illusion until they sell the asset. Their debt is an absolute figure. Assets can appreciate or depreciate and depreciation is the normal course for all assets.

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