"Rent money is dead money"

chucky

beingjdc wrote: »

It's not twisted logic - those people really were richer. They chose not to realise their gains, and are becoming poorer again, but they still were richer.

If there's an annoying phrase that I find more frequently used by the self-deluded investor than "dead money", it's "paper loss"

i think that we're in agreement - renting is not dead money in any way. it what suits the individual. however if it is long term (15-20 plus) for me it isn't something that makes economic sense though.

beingjdc

chucky wrote: »

i think that we're in agreement - renting is not dead money in any way. it what suits the individual. however if it is long term (15-20 plus) for me it isn't something that makes economic sense though.

Agreed - because we live in a society where inflation is considered a fact of life and seems likely to continue being, and where (this is important too) savings income is taxed whereas capital equity isn't, owning fixed assets is always better in the very long-term.

I will buy again at the appropriate time, given my needs and the state of the market. However just because buying makes sense in the long-term, doesn't mean that buying at any time makes sense.

Even if you're going to live in a house for the next 50 years, it still makes more sense to buy it for £150k in 2010 than £250k in 2007.

If the above on savings and inflation were not true, then it would mean that those people who celebrate having financial freedom because they've paid off their mortgage, could rationally rent and build up an equivalent amount of cash, and be financially free that way.

Personally, I think it would be a more rational economy if those two choices were equivalent, but there we are, I think a lot of stuff

1sue23

punkstoner wrote: »

great for you. I hope your 'lifestyle' continues.......

Who knows what is round the corner, but for now I am happy and have made mine and my families life as secure as I am able, but as with anything who knows what the future will bring.

izzybusy23

Sally_Gee wrote: »

In this thread, people paying DEAD MONEY in rent try and make themselves feel better by fooling each other!

Ok, answer me why you are on this board.. did you just stumble across it and thought about making stupid remarks to make you feel superior, or did you seek it out because really you are in the !!!! financially?? Why anybody would come on a forum to wind people up seems shallow, self loathing and very very sad and desperate.

Seriously love, get a life, a real one, not pretend one...

Pobby

Look!!!!! Get this in ya heads . House prices only go up! Renting is dead money
"OK nurse, just 2 more minutes"

House prices are downward sticky. My house is my pension

" Yes, yes, I know it`s medication time"

High house prices are good for the economy. Buying a house is a good investm...........

" Ouch, alright nurse. No not that jacket again. Gerrrofffffffff!!!!!!!!!!!!!!!!!!!!!!!!!"

StevieJ

beingjdc wrote: »

Agreed - because we live in a society where inflation is considered a fact of life and seems likely to continue being, and where (this is important too) savings income is taxed whereas capital equity isn't, owning fixed assets is always better in the very long-term.

I will buy again at the appropriate time, given my needs and the state of the market. However just because buying makes sense in the long-term, doesn't mean that buying at any time makes sense.

Even if you're going to live in a house for the next 50 years, it still makes more sense to buy it for £150k in 2010 than £250k in 2007.

If the above on savings and inflation were not true, then it would mean that those people who celebrate having financial freedom because they've paid off their mortgage, could rationally rent and build up an equivalent amount of cash, and be financially free that way.

Personally, I think it would be a more rational economy if those two choices were equivalent, but there we are, I think a lot of stuff

Even if you're going to live in a house for the next 50 years, it still makes more sense to buy it for £150k in 2010 than £250k in 2007.

All things being equal, but what if ten year fixed rates are 10% in 2010 but say 5% now?

beingjdc

StevieJ wrote: »

Even if you're going to live in a house for the next 50 years, it still makes more sense to buy it for £150k in 2010 than £250k in 2007.

All things being equal, but what if ten year fixed rates are 10% in 2010 but say 5% now?

Then wait even longer, because if ten year fixed rates go up to 10%, then house prices will fall a hell of a lot more than 40%, and you'll be able to get 10% on the money you're saving towards a deposit!

Also, the cost of paying off £250k over 25 years at 5% is £562k, whereas the cost of paying off £150k over 25 years at 10% is £525k, so...

mr.broderick

Not sure this is the right thread to mention this but after careful consideration i am a little peeved that only rugged toast nominated me for most respected member of the year.....

mizzbiz

mr.broderick wrote: »

Not sure this is the right thread to mention this but after careful consideration i am a little peeved that only rugged toast nominated me for most respected member of the year.....

This is the thread of random, unjustified statements so go ahead. I'm sure the OP won't even notice and at least you're polite and literate in doing so.

StevieJ

beingjdc wrote: »

Then wait even longer, because if ten year fixed rates go up to 10%, then house prices will fall a hell of a lot more than 40%, and you'll be able to get 10% on the money you're saving towards a deposit!

Also, the cost of paying off £250k over 25 years at 5% is £562k, whereas the cost of paying off £150k over 25 years at 10% is £525k, so...

I only used 5% and 10% as examples of how other things can affect the equation
If interest rates have gone up to 10% then inflation will be on th rise. asset prices will almost certainly be increasing not decreasing.