Save, don't borrow.

Lokolo

Degenerate wrote: »

And you've made it clear that people should have the pot in place before they get a mortgage. So people should save for a decade to build up their rainy day pot... then save a deposit... Good luck with that. That puts Graduates into their mid 30s before they buy. I'm in my mid 30s and will shortly have my mortgage paid off. Wanna know how?

Because I mortgaged myself to the absolute limit of affordability at the youngest possible age, and now I'm getting the payback for that risk.

No risk, no return.

You are from a different generation. Mortgages nowadays are a lot different. Trust me. (I've been trying to see what my options are!)

Soubrette

Degenerate wrote: »

That's what annuities are for. A regular income that ends when you die.

I thought I said that already As you are probably aware - there are also winners and losers in annuities - some people (shock horror) will die before they can be repaid the initial sum they used for purchasing their annuity. Is that underconsumption?

What if you die at 45 after being hit by a car and lying in hospital for 3 days. Are your last thoughts going to be deep regret you didn't manage to spend all your lucre

Soubrette

Degenerate wrote: »

And you've made it clear that people should have the pot in place before they get a mortgage. So people should save for a decade to build up their rainy day pot... then save a deposit... Good luck with that. That puts Graduates into their mid 30s before they buy. I'm in my mid 30s and will shortly have my mortgage paid off. Wanna know how?

Because I mortgaged myself to the absolute limit of affordability at the youngest possible age, and now I'm getting the payback for that risk.

No risk, no return.

You were lucky as well as astute. You took a risk in a time where you had missed the big falls of the late 80s and after a decade in the doldrums, a time when property was an amazing investment, you were lucky you didn't lose or have your income reduced in the first stages of your mortgage when you could ill afford it.

However you were also astute, you didn't take out all the equity in your property (the opportunity cost being a loss of potential holidays, bigger house etc) and are now reaping the benefits of having practically no mortgage. Your initial risk was tempered by caution and you are now reaping the benefits. Lots of other people who were not as cautious as you are now in a position that when interest rates rise, they might lose their homes because they were eager to spend the apparent wealth they had in their homes.

Maybe we're not so different after all

ETA I believe the age for first time buyers without outside help is now late 30s, mainly due to the massive deposits required even in the age of fairly lax lending by the bank - I dread to think what it will be if the tight lending continues for 10 years and house prices do not appreciably fall.

ixwood

Poor is a mindset/personality trait IMHO.

Poor people generally make bad decisions, waste money and fail to plan for future events. That's what keeps them poor, not low incomes.

This is interesting:-
http://en.wikipedia.org/wiki/Deferred_gratification

Self control seems to play a large part in our life outcomes.

PROLIANT

I managed to save about £20 off my water bill per quater by no flushing the pot everytime I went for a pi$$, Tesco give great advice....every little helps

le_loup

Degenerate wrote: »

OTOH, those who tread a less risk-averse path and end their life roughly even would probably look back at the fun they had spending their money with no regrets.

Yes, you're so right. People in debt have such fun don't they?
I can only imagine the joys of losing their house, the fun of banter with the bailiffs, the sheer thrill of the card being rejected at the checkout, the excitement of finding a pound behind the sofa for the gas meter.
What fun! What japes!

ILW

Lokolo wrote: »

You are from a different generation. Mortgages nowadays are a lot different. Trust me. (I've been trying to see what my options are!)

By different generation, do you mean the last 3 years?

Lokolo

ILW wrote: »

By different generation, do you mean the last 3 years?

10-20 years!

My step dad could afford a house when he went into work, he has paid it off now.

Nowdays - what person can afford to buy 1/2 years into a job? I would suspect very few people.

Cash-Strapped.T32

I fear I'll be 35/36 minimum before I've got anything close to a deposit, and the more conservative I play it, the closer to 40 I'll be unless my projected earnings increase substantially (which is not looking likely any time soon).

ILW

Lokolo wrote: »

10-20 years!

My step dad could afford a house when he went into work, he has paid it off now.

Nowdays - what person can afford to buy 1/2 years into a job? I would suspect very few people.

Up to around 3 years ago, anyone could get a mortgage with no deposit and no proof of income. It was crazy.