Interesting article on falling house prices and the 'wealth effect'

moanymoany

One of the nicest weddings I went to, the bride made the dresses, the reception was at home - ordinary semi - and the bride made the cake and the whole family made the 'buffet' reception - and nobody ended up arguing or crying (except from happiness)

There was once a thread on the DFW board about a young woman, working very hard to get out of debt. She had been asked to be a bridesmaid and it was going to cost her hundreds of pounds - dress, hen week's holiday, hen's night out, dress, shoes and so on.....

She decided to say no. There were a lot of people who posted who said they had been in similar situations, where the cost of even being a guest was going to knock their debt payments for six.

I do wonder if a wedding that costs £30,000 is ten times more enjoyable than a more frugal wedding that costs £3,000.

moanymoany

moanymoany wrote: »

Dh brought me a book back from USA called 'The Millionnaire Next Door' well worth getting from the Library for a read.

The typical millionnaire in the States lives in a modest house, drives a modest second hand car or buys a 'solid' car and drives it for years, buy clothes on sales and generally live frugally.

Those who appear to live millionnaire lives are very often up to their ears in debt.

'Rich Dad, Poor Dad' says houses are not wealth gathering investments! Interesting.....

ps I know MEW means taking the equity out of your house by means of a loan, but what do the letters stand for please?

And just WHEN did they start spelling millionaire with one N!

'The Millionaire Next Door' is really worth reading.

lynzpower

I do wonder if a wedding that costs £30,000 is ten times more enjoyable than a more frugal wedding that costs £3,000.

I tend to think its the other way round. Plenty of the guests at the above wedding found it all a bit too formal and "posh" and felt a bit "on eggshells" and the beers at the bar ( for those sick of v expensiuve wine) were 4.50 a throw.

Mine & OHs wedding -if I can ever allow us to open the purse strings- god im tight these days-will be more like 5k on the day and 5-8k on the honeymoon ( I want 6 months off work with my beloved, we dont get to spend anywhere near enough time together) Whether this will happen with career committments tho, Im tempted to doubt that now. This of course will be funded directly from savings. ( and maybe we might ask for donations towards honeymoon from guests who would like to give. We did suggest to my mother that we wouldnt bother with a wedding list as we have everything we need already, and she looked devastated- claiming that people really want to give. I reminded her that I'm not the only one in this world who can do without spending money for the sake of - esp in this sort of climate, but hey ho, she seemed convinced Im also not going to have any bridesmaids, favours, and my mother is not getting a present (( she has more than enough in my view) total waste of money.

Sorry pobby Im not too sure about reading Ive only been a couple of times. but they bought at the peak, and added the wedding, so even if it still fetched the peak price the 30k wedding - if that guesstimate is right- will have put them 30k in neg eq. Surely?

Conrad

moanymoany wrote: »

The typical millionnaire in the States lives in a modest house, drives a modest second hand car or buys a 'solid' car and drives it for years, buy clothes on sales and generally live frugally.

Those who appear to live millionnaire lives are very often up to their ears in debt.

'Rich Dad, Poor Dad' says houses are not wealth gathering investments! Interesting.....

ps I know MEW means taking the equity out of your house by means of a loan, but what do the letters stand for please?

Great, this sounds like me talking, uncanny

It amuses me when people describe others as being minted with pots of money - I dont know about you but I'm always hearing this said and I'm quick to point out that none of us know. This is greeted with raised eyebrows and assurances by them that they are certain 'x' is minted.

They make this assumption based on visible apparant wealth.

I have quite a few clients that you would not think had any money. They live modestly yet they own many properties with a low ratio of debt.

On the other hand a chap pulled up the other day and made sure he parked his car right outside my shop window. It was apparantly a Merc based on the F1 pace car with 6.7ltr engine costing I think well over £100k.
This chap employs quite a few people and is exactly they type that would be described as minted.

Well I analyised his position and effectvely he is penniless. He owes more than his assets are vaued at. He draws a high income from his firm, but the company can not at all support these drawings.
Its all an illusion of wealth.

Set that against a lady client who was earning about £16k working for a printer. She was too frugal really, but she now ownes 2 houses with no debt, and she early 30s. She has more wealth than the other flash chap yet no one would ever think this person had money:T

Dithering_Dad

Conrad wrote: »

She has more wealth than the other flash chap yet no one would ever think this person had money:T

Best way to be. I can't imagine a better position to be in than to be independantly wealthy and untouchable as far as the vagaries of the economy are concerned. A much better feeling than the temporary high of consumerism.

We have the crappest car on our street, the rest are Mercs and BMs and an occasional Lexus. Our next door neighbour doesn't even know his neighbours names, he calls them 'Mr BMW at number 23', etc. :rolleyes: I'm sure I'm 'Mr Crap Car at number 12'. :rotfl:

No doubt we're looked down on to certain extent, but I have to say that I feel much better having a crap car and lots of equity than I would having a great car and no equity. We're nowhere near independently wealthy, but that's my goal and I hope to be there within the next 5 years.

Conrad

Dithering_Dad wrote: »

Does anyone remember those AA financial services adverts where the 'poor' Bev and Trev pull up at the lights in their old banger and see the 'rich' Bev and Trev in their shiny new Volvo? They then exchange annoying 'Hi Bev' and 'Hi Trev' pleasantries.

The aim of the advert was to convince people to get into debt in order to look wealthier, when in fact they were actually making themselves poorer. They don't show the ads anymore, but if they did I would imagine that 'poor' Bev and Trev would drive their old banger past 'rich' Bev and Trev who are stood at the bus stop, their shiny new car having been reposessed.

I know a gal who wont even consider a guy unless he's driving something flash.
These people are so unelightened, it beggars belief. Thinking back over the years it seems a lot of my wealthier clients are in fact drivers of old Volvo estates and keep a very low profile.

At a hotel our modest Audi estate 2002 looked a little incongrous next to quite a few of the vehicles there. I think a lot of people do judge you by such trivia.

The father of a freind of ours has Ferraris and is always inviting the whole village to parties at his flash house with pool, but our freind let slip the father has no intention to ever repay his interest only mortgage - but to die owing the full balance!
Yet again thoug, most people describe this guy as minted - but I know quiet careful civil servant types that have far more asset wealth.

Conrad

Dithering_Dad wrote: »

Best way to be. I can't imagine a better position to be in than to be independantly wealthy and untouchable as far as the vagaries of the economy are concerned. A much better feeling than the temporary high of consumerism.

We have the crappest car on our street, the rest are Mercs and BMs and an occasional Lexus. Our next door neighbour doesn't even know his neighbours names, he calls them 'Mr BMW at number 23', etc. :rolleyes: I'm sure I'm 'Mr Crap Car at number 12'. :rotfl:

No doubt we're looked down on to certain extent, but I have to say that I feel much better having a crap car and lots of equity than I would having a great car and no equity. We're nowhere near independently wealthy, but that's my goal and I hope to be there within the next 5 years.

Couldn't agree more (blimey, what's happening) DD.
I have a few self employed salon owners on my books, and typically they will have a couple of flash 4 x 4 per family / couple, always wear designer gear, always sun tanned, spend £60k on floor tiles for the home, have £2k TV s and so on, yet if you boild it all down, they are very financially unsecure. One couple have a slaon each and yet thier total wealth after debt is less than 3100k, but they carry on like millionaires.

Dithering_Dad

Conrad wrote: »

Couldn't agree more (blimey, what's happening) DD.

Don't worry Conrad, I'm sure we'll be disagreeing and arguing on a different topic, shortly.

Normal service will be resumed.

moanymoany

lynzpower wrote: »

I tend to think its the other way round. Plenty of the guests at the above wedding found it all a bit too formal and "posh" and felt a bit "on eggshells" and the beers at the bar ( for those sick of v expensiuve wine) were 4.50 a throw.

Mine & OHs wedding -if I can ever allow us to open the purse strings- god im tight these days-will be more like 5k on the day and 5-8k on the honeymoon ( I want 6 months off work with my beloved, we dont get to spend anywhere near enough time together) Whether this will happen with career committments tho, Im tempted to doubt that now. This of course will be funded directly from savings. ( and maybe we might ask for donations towards honeymoon from guests who would like to give. We did suggest to my mother that we wouldnt bother with a wedding list as we have everything we need already, and she looked devastated- claiming that people really want to give. I reminded her that I'm not the only one in this world who can do without spending money for the sake of - esp in this sort of climate, but hey ho, she seemed convinced Im also not going to have any bridesmaids, favours, and my mother is not getting a present (( she has more than enough in my view) total waste of money.

Sorry pobby Im not too sure about reading Ive only been a couple of times. but they bought at the peak, and added the wedding, so even if it still fetched the peak price the 30k wedding - if that guesstimate is right- will have put them 30k in neg eq. Surely?

My dd and her partner had a civil partnership ceremony and a champagne breakfast - about 11am at a Cafe Rouge. They then went on a five months holiday round south east Asia. They had a wonderful time and their wedding was just wonderful. I don't know how much is cost, but the wedding could not have cost more than £500. They had an amazing holiday.

neverdespairgirl

Dithering_Dad wrote: »

No doubt we're looked down on to certain extent, but I have to say that I feel much better having a crap car and lots of equity than I would having a great car and no equity. We're nowhere near independently wealthy, but that's my goal and I hope to be there within the next 5 years.

People who look down on you because of your car are doing you a favour, because they spare you their company!

We have an R reg Fiat. It's nice to drive, doesn't use much petrol, and is cheap to maintain. I don't think I know anyone who cares what car we have, but if someone did, more fool them.