£1.2tn given to old from young

[Deleted User]

Graham_Devon wrote: »

It doesn't really matter where it is,

Right now it matters a lot as i'm trying to get my head around it.

though it's probably held in another property by those you bought off.

What do you mean - under the matress of that house? I doubt it. So where is it?

What matters is....can you get to that 200k?

If you can, where will you live?

It doesn't matter to me as I don't need the money. I've got plenty more in the bank. But if I did want to sell up i've got another house that I could move into And if I wanted to sell both of them I could always rent - a lot of people on these boards seem to think it's the bee's knee's...and far cheaper than owning a house

ukcarper

[QUOTE=?

Sorry for missing the obvious but it's bugging me so can someone explain Is spending money on houses any different from spending money on other items? Someone must make money out of it (builders etc) and therefore THEY will have more money to spend on other items.[/QUOTE]

I don’t think many house sales benefit builders’ only new build. I suppose banks make a nice amount out of mortgage interest. I can’t explain it but the rest isn’t real money until someone sells and either doesn’t buy again or downsizes. If they downsize only a proportion of it becomes real. So if I decide to downsize and steel some money from the younger generation it will it will only be about 15% of my portion of the 1.2tn because I will have to buy somewhere to live.

Francesanne

StevieJ wrote: »

I have news for you Graham, they can't take it with them I wonder where all that dosh will end up :rolleyes:

Split between favourite charities! Don't have any kids and don't want any distant relatives fighting over my hard earnt dosh. Bah humbug.

Graham_Devon

Ok.

The money is in your property. You gave 200k to someone else, who may have gone and bought another house, or may have banked it.

Solicitors will have had a chunk, estate agents will have had a chunk, the government has had a chunk.

As the housing market is basically a pyramid scheme, imagine sticking 200k into a jar. As you do this, the jar expands slightly. Someone else sticks 200k in and the jar expands again. The jar is never ever full. The people putting into the jar after you are putting larger amounts of cash in. The jar simply responds by growing further amounts each time.

You can take money out of the jar, but then you are pretty much stuck for living.

One day, a match falls into the jar, and up goes some of the cash, until the point where the fire can be safely extinguished, which due to the amount of cash in there, could take some time.

In other words, your cash has been locked down until you relieve yourself of your asset.

The only ones to really win here, were the government, estate agents, and solicitors. Their money was not in the jar. That is, of course, unless you have "shares" in that jar, in terms of BTL and you are able to sell these shares before the pot sets alight.

I dunno !!!!!! I have just written.

Edit: Bit I'll add to it by stating the country has just been given a load more cash, in terms of QE. This has helped fill the whole left by the fire and allowed the jar to expand again. (not so much in terms of throwing this cash into the jar, but giving the means for the banks to lend more cash to people to put in to the jar).

[Deleted User]

But isn't that the same with, for example, cars, jewellery, phones....pretty much anything we buy?

At the end of the day what use is money - dirty little bits of paper. It's the things that we can exchange those bits of paper for that are of real value. Now what would you rather have:

1. A house (that you can exchange for bits of dirty paper)
2. Bits of dirty paper (that you can exchange for things you like)
3. Nothing

Given a choice of the above I'd choose a house every time.

Graham_Devon

Deleted_User wrote: »

But isn't that the same with, for example, cars, jewellery, phones....pretty much anything we buy?

Nope.

Cars fall in price. Phones fall in price.

Gold it could be the same for.

fc123

Just butting with a note to DS.
O M G Episode 2...just got to the bit about the design reference for outside.
Palace of Versailles. :-0

[Deleted User]

Graham_Devon wrote: »

Ok.

The money is in your property. You gave 200k to someone else, who may have gone and bought another house, or may have banked it.

Solicitors will have had a chunk, estate agents will have had a chunk, the government has had a chunk.

As the housing market is basically a pyramid scheme, imagine sticking 200k into a jar. As you do this, the jar expands slightly. Someone else sticks 200k in and the jar expands again. The jar is never ever full. The people putting into the jar after you are putting larger amounts of cash in. The jar simply responds by growing further amounts each time.

You can take money out of the jar, but then you are pretty much stuck for living.

One day, a match falls into the jar, and up goes some of the cash, until the point where the fire can be safely extinguished, which due to the amount of cash in there, could take some time.

In other words, your cash has been locked down until you relieve yourself of your asset.

The only ones to really win here, were the government, estate agents, and solicitors. Their money was not in the jar. That is, of course, unless you have "shares" in that jar, in terms of BTL and you are able to sell these shares before the pot sets alight.

I dunno !!!!!! I have just written.

OK. So imagine you don't buy a house. You spend your money on rent, holiday's nights out. You don't have any assets to sell.

Or maybe you're not that silly with money. You put your money in the bank. But where are you going to live? How are you any better off than the person that has a house (and therefore the option to either live rent free or to live like you with the added bonus of a big cash sum)?

But that's not really my question. I'm trying to understand this idea that money spent on houses doesn't really exist. How is buying a house any different from buying a car? OK - big difference - a car depreciates where as a house typically doesn't....not in the long term.

Graham_Devon

Deleted_User wrote: »

OK. So imagine you don't buy a house. You spend your money on rent, holiday's nights out. You don't have any assets to sell.

Or maybe you're not that silly with money. You put your money in the bank. But where are you going to live? How are you any better off than the person that has a house (and therefore the option to either live rent free or to live like you with the added bonus of a big cash sum)?

But that's not really my question. I'm trying to understand this idea that money spent on houses doesn't really exist. How is buying a house any different from buying a car? OK - big difference - a car depreciates where as a house typically doesn't....not in the long term.

Or maybe you are locked out of putting into the pot as it requires you to put far more than is possible in.

I've explained in the only terms I can really think of why the money doesnt really exist.

Here's an idea. If you think that 200k exists, go and buy a 50k car with it. Though I want you to continue living in the same house and take no loans or products.

[Deleted User]

Graham_Devon wrote: »

Nope.

Cars fall in price. Phones fall in price.

Gold it could be the same for.

OK. So a house is a better investment than a phone, car or even gold. I agree.

But that doesn't explain this idea that money spent on property somehow doesn't exist. In THIS respect how is it different from buying a car or a phone?

Let me remind you of the bit I'm responding to:

I would imagine that the bulk of that 1.2tn is just sitting in property and not doing the vast majority of people any good young and olds alike.

I've heard a lot of comments like this and I'm struggling to understand.

Money doesn't sit in property. Any more than it sits in cars and mobile phones.