£1.2tn given to old from young

Graham_Devon

So were working on the fact that the person he gives his 200k cash too might not buy a house.

Good job.

It well known that there is trillions locked in bricks and mortar.

Harry_Powell

Graham_Devon wrote: »

So were working on the fact that the person he gives his 200k cash too might not buy a house.

Good job.

It well known that there is trillions locked in bricks and mortar.

yes, and trillions locked in Gold, and billions locked in platinum, silver, diamonds, cars, plasma TVs and a billion other asset types.

What's your point?

[Deleted User]

Graham, the others are right. That is exactly what I am saying.

But in response to your point...

Graham_Devon wrote: »

Trouble is, you need somewhere to live. Therefore, you are going to have to again lock up some of this 200k in a house.

Sorry it doesn't suit y'all.

It does suit me. Consider this.

You have 200k in the bank. You'd like to invest it but you also need somewhere to live.

You *could* keep your 200k in the bank or invest in shares and use your income to rent property.

Alternatively you *could* invest in a house. This will typically allow your capital to increase above the rate of inflation (historically one of the safest investments you can make) AND have somewhere to live. You can save the income that you'd otherwise have spent on rent.

Now yes, you are absolutely correct. You can't release the money from your investment without selling your house and moving into rented accomodation - or buying a cheaper house. But this is true of anything you buy - you can't have your cake and eat it.

But surely you see that (based on statistics) you're better off than the person that rented and kept is money in the bank?

As a home owner I can assure you that whilst I have no intention of selling my home the more it increases in value the more secure I feel. Should the unexpected happen the more my house is worth the more flexibility I have to deal with problems. Sure, if all property goes up at the same rate then I don't get to spend any of the returns on my investment on anything but more property if circumstances don't change. But there are lots of scenarios where I might end up with a home and a big wad of cash in my hand. And those with kids will no doubt be delighted to leave a little something for their offspring.

Really2

Harry_Powell wrote: »

yes, and trillions locked in Gold, and billions locked in platinum, silver, diamonds, cars, plasma TVs and a billion other asset types.

What's your point?

I think seeing past one transaction is blowing his mind, the idea of cash being a massive merry-go-round is to much.

Don't fall for his cunning again HP.

Harry_Powell

Really2 wrote: »

I think seeing past one transaction is blowing his mind, the idea of cash being a massive merry-go-round is to much.

Don't fall for his cunning again HP.

You're right, I'm falling for his cunning 'muddle up a thread' ruse again. He's getting desperate though, even my 5 year old nephew knows about money circulation, by pretending he doesn't understand it, Graham is overplaying his hand. He'll be arguing next that he doesn't believe that snow is frozen water and we'll spend another 20 pages trying to explain it while Graham laughs at us all and the muddle he's created.

He's a genius thread wrecker, to be sure. :cool:

JonnyBravo

Harry_Powell wrote: »

yes, and trillions locked in Gold, and billions locked in platinum, silver, diamonds, cars, plasma TVs and a billion other asset types.

What's your point?

Don't forget beer.
I regularly lock up some of my money in beer.

Dangerous though, as that seems to make me want to lock some up in curry.

John_Pierpoint

I think the point someone is trying to make is that buying a house (bigger than the rabbit hutches of China & Japan) is consumer spending. Marginally more useful to the rest of the rising world population and your own family than (say) buying a 4 x 4.
Buying gold simply locks up wealth and makes everyone poor BUT rich people are only inspired to buy gold when they see money being destroyed by Governments and foolish banks.
Only productive investment (or clever techniques to improve the yield of existing investment) can make this world wealthier (or keep up with increasing need).
Where is that happening in this recession?

Harry_Powell

John_Pierpoint wrote: »

Only productive investment (or clever techniques to improve the yield of existing investment) can make this world wealthier (or keep up with increasing need).
Where is that happening in this recession?

Anyone buying shares, anyone buying ivestment property will be sowing the seeds for future wealth. The people who make money are the ones who buy in a recession when assets are cheaper, not in a boom when assets are overpriced.

Harry_Powell

JonnyBravo wrote: »

Don't forget beer.
I regularly lock up some of my money in beer.

Dangerous though, as that seems to make me want to lock some up in curry.

We locked up some money in a sledge just before xmas. Best investment we ever made, had great fun on xmas day.

[Deleted User]

And of course, another big advantage of investing in a house that you intend to live in is that there is no capital gains tax on your gains!

If you're somone that's always rented and are horrified at the thought of spending a huge sum on a house then think of it in these terms. Become your own landlord. Double up having somewhere to live with running a little rental business with you being landlord and tenent.

When young I doubt that I'd have worried too much about renting. But at my current age (46) I'm already starting to think that

a) I don't really want to keep working too much longer
b) My skills might not be needed in 10 years time - what would I do to earn a living then.

It's wonderful to know that I have a house that's worth a bit. If the worst happens I have a bit of a safety cushion. Now if my house was still worth what I paid for it then I'd have a lot less rental/living money out of it's sale than I do given that it's increased hugely in value. And the more it continues to increase the bigger my safety cushion.