the answer to the pension crisis...

the_ash_and_the_oak

IveSeenTheLight wrote: »

Hindsight is a wonderful thing and hindsight shows that most STR's are not so fortunate to sell at the top and buy at the bottom

totally agree (and it would have been v doubtful they would have actually done this) doubt there even were any STRs last time around - really it was just to show that although they were completely unaffected (to the level of not even noticing it) - it does have an effect down the years (not one they can really complain about imo)

to put it another way, someone who first bought in 1995 would be in a much better position than someone who first bought in 1990 though imo (even though the person bought in 1990 would be in a good place too)

Thrugelmir

IveSeenTheLight wrote: »

Who's talking about paper profit?

You may have cash in the bank, but the same amount of cash invested in property rented out will return more than the compounded interest you would get in the bank over 25 years

Comparing "investments" to an instant bank deposit account is very misleading. As with the majority of investments there is risk. Investing is far more than just about yield.

Though at the moment returns on longer term deposits aren't bad and exceed inflation for the first time in a long while. I deliberately ignored IceSave in that statement as there rates were always to be good to be true.

My comment about cash. Isn't sitting on it for 25 years. But actively managing ones diversified portfolio and banking gains when the opportunity arises.

As I said earlier very difficult to find value. As investors are chasing yield which is driving up prices, though the fundamentals for capital growth aren't there either in many cases.

The beauty of cash is that you respond to the days when markets fall.

IveSeenTheLight

Thrugelmir wrote: »

Comparing "investments" to an instant bank deposit account is very misleading.

Hmmm, you were the one with "cash in the bank"

Thrugelmir wrote: »

My comment about cash. Isn't sitting on it for 25 years. But actively managing ones diversified portfolio and banking gains when the opportunity arises.

As I said earlier very difficult to find value. As investors are chasing yield which is driving up prices, though the fundamentals for capital growth aren't there either in many cases.

The beauty of cash is that you respond to the days when markets fall.

Seems a lot of work which may provide better returns or then again maybe not.
I've tried the shares game and it's just not for me.
Lost capital that I've invested in shares and you really need to have a good knowledge of the markets.

I'll stick with the less risky bricks and mortar which so far has prooved to be the best investment for me and I'm sure will see me through my retirement days

ukcarper

the_ash_and_the_oak wrote: »

This is actually pretty interesting. Both my parents and grandparents owned right through the 90s crash but neither bought or sold during it. Don't think either of them noticed it.

w my parents they said they didn't really remember it happening at all but this time they've definitely noticed it because they wanted to move and its been v difficult to find a buyer. The odd thing is - although they were unaffected by the 90s crash - they've sort of ended up finding out they were affected after all (knowing what they know now if they had STR at peak and rebought in say 95 they would have cleared off the remainder of the endowment and could also be in a lot larger house to downsize/str/whatever from now)

Would the profit been as much as you think buying and selling fees. Also I had been in my house 5 years when the fall started and had a relatively small mortgage and I would have had to use some of my capital to pay the rent which would have been a lot more than my mortgage payments.

the_ash_and_the_oak

ukcarper wrote: »

Would the profit been as much as you think buying and selling fees. Also I had been in my house 5 years when the fall started and had a relatively small mortgage and I would have had to use some of my capital to pay the rent which would have been a lot more than my mortgage payments.

Not sure.. if we're saying the crash last time was around 20%(?) I'm guessing the buy/sell costs of a house weren't 20% of capital outlay at time

Well if the mortgage was small I'm guessing selling would mean a large sum of money in the bank. IR were pretty high at the time imo so I'm guessing they wouldn't really have needed to touch the capital to pay the rent in that scenario

ukcarper

the_ash_and_the_oak wrote: »

Not sure.. if we're saying the crash last time was around 20%(?) I'm guessing the buy/sell costs of a house weren't 20% of capital outlay at time

Well if the mortgage was small I'm guessing selling would mean a large sum of money in the bank. IR were pretty high at the time imo so I'm guessing they wouldn't really have needed to touch the capital to pay the rent in that scenario

Good point and selling and buying cost prob less than 5% but youd have to be lucky to time it right and to be honest with a couple of kids in tow who would bother.

the_ash_and_the_oak

ukcarper wrote: »

Good point and selling and buying cost prob less than 5% but youd have to be lucky to time it right and to be honest with a couple of kids in tow who would bother.

like I say they wouldn't have done the above (mainly because they didn't even notice the 90s crash at the time) - the point being made is that despite it not having an effect on them at the time it is something that has something of an effect on their current situation in regard that doing the above would now have them attempting to sell a larger house than the one they actually own

(funny thing is my dad actually had a chance to go work a 3 year contract in Portugal in 1989 but decided against it)

the_ash_and_the_oak

actually you wouldn't really have to be that lucky with the timing if you had sold in 89/90

IveSeenTheLight

the_ash_and_the_oak wrote: »

actually you wouldn't really have to be that lucky with the timing if you had sold in 89/90

Actually you would.
The UK average figures does not reflect similarly in each local area.
I have shown proof before of areas throughout the UK that fully recovered within one year and also that 89/90 was not their peak.

the_ash_and_the_oak

IveSeenTheLight wrote: »

Actually you would.
The UK average figures does not reflect similarly in each local area.
I have shown proof before of areas throughout the UK that fully recovered within one year and also that 89/90 was not their peak.

then it seems you would have had to have been lucky with your locale rather than your timing imo