Baby boomers struggle to pay off debts

Braveheart100

My BB M-I-L fills me with despair.

In the boom she bought a buy-to-let in Cardiff bay. The flat went up and up and up in price and she used it as a cash machine - every few years she extended her mortgage by tens of thousands of pounds. This supplemented her pension and money she got from part time work. Like so many in her age group it was holiday, holiday, holiday. At 65 she decided to do a degree - more Mewing, then a masters - more Mewing.

Then crash, crash, crash. She did manage to sell her flat but there was no equity left in it by then and she just covered her costs.

Now she is 70 and I have just had to spend the holidays listening to her moaning. She is lucky enough to have a home (no mortgage) and a small but reasonable pension but she has barely no savings. She feels like she is ENTITLED to sooooo much more. She thinks she should be able to go on holiday every month, eat out at least once a week, drive everywhere without regard for petrol costs, blah,blah,blah

I despair! How did that generation get so spoilt? Where does this sense of entitlement come from?

A._Badger

Braveheart100 wrote: »

I despair! How did that generation get so spoilt? Where does this sense of entitlement come from?

They learn it from listening to their kids.

lostinrates

Braveheart100 wrote: »

I despair! How did that generation get so spoilt? Where does this sense of entitlement come from?

Personally I wouldn't use the term spoilt but....

I think my parents generation had a lot of ''entitlement'' good news. while my mother had no help while a single parent...she was part of the generation for the first time that had birth control. She was also told, via media, she could have a career if she wanted it...a proper career. Orshe could be a stay at home wife...opportunity allowing. Mod cons became more affordable and available than before allowing this an there was not the lobby of research suggesting working/not working is bad for your children for one reason or another.

If you tell people enough that ''they can'' its not surprising they think ''they can'' and feel put out if it turns out they can't. I don't think its unique for that generation...I think its just that the ''no'' moments for a lot of them (and others, e.g. those preparing for university)are happening now....for others it hit in previous decades....

edit: what I mean really is that the generation saw so much become possible, or seem possible..home ownership increase, education increase, post war nutrition, travel opportunity and when things went wrong state support...things, though they were at times rough, have generally seemed progressive. I think this leads people to think it always will. It may do. I dunno.

Graham_Devon

I've said it before, but for many of that generation, the "wealth" they ammased through property actually means nothing, as they either need to sell to benefit from the cash and live for free somewhere, or sell, and move.

The biggest benefit, of course, was selling a house 10-15 years after buying it, and finding yourself in a new mortgage free situation if you bought another house slightly cheaper. Suddenly, due to HPI you could sell up and live mortgage free, dependant on circumstances.

What we have seen a lot of, a hell of a lot of, is MEWing. And that's what has caused a lot of hardship later for some.

But overall, for people who just bought houses to live in, the "wealth" thats calculated, one part of that wealth being the value of the home, is useless to them. It's hyped up to be somewhat more than that, hyped up to show you how rich you are. But in reality, you can't actually use the cash, not without MEWing, which, basically, is more debt.

Some will have fallen foul to living way beyond their means through MEWing, and have to start paying the price now. Some have found themselves in the fortunaate position of moving at the right time and becoming mortgage free, and for some it's made no different apart from they are apparently much wealthier than most of the country, but can't actually spend any of it.

newleaf

Feel very dim needing to ask this, but could someone please define MEWing for me? I see it in a lot of threads and I'm guessing something to do with equity from property but really not sure?

the_risen_christ

Mortgage Equity Withdrawal, aka a second mortgage.

chucky

newleaf wrote: »

Feel very dim needing to ask this, but could someone please define MEWing for me? I see it in a lot of threads and I'm guessing something to do with equity from property but really not sure?

MEWing is a term frequently used on this forum.

it is usual and very common on this forum to say that people used Mortgage Equity Withdrawal to buy plasma tv's, a full spec BMW and have many holidays in Dooooooobai.

all of that would be instead of using the cash on things that added value to your property like an extension or even allowed you to buy a 2nd property.

the first example may have been done by a small minority but to some people on this forum, a small minority is everyone.

as for this post - it's wrong

the_risen_christ wrote: »

Mortgage Equity Withdrawal, aka a second mortgage.

MEW is to release extra borrowing from your mortgage against the built up equity on a property.
it's not a 2nd mortgage.

the_risen_christ

chucky wrote: »

MEW is to release extra borrowing from your mortgage against the built up equity on a property.
it's not a 2nd mortgage.

It's still a second mortgage. They just had to change the name because getting into debt against your home for any reason other than the initial purchase used to be a sign of failure. The new term is a marketing stunt to avoid evoking the wisdom of previous generations who knew that debt was incredibly dangerous.

The righteous work of many to turn MEW into a dirty word will help to restore this sensible attitude.

chucky

the_risen_christ wrote: »

The new term is a marketing stunt to avoid evoking the wisdom of previous generations who knew that debt was incredibly dangerous.

ok then, if you say so

Braveheart100

lostinrates wrote: »

Personally I wouldn't use the term spoilt but....

I forgot to explain that before she finally sold her flat in Cardiff Bay in November she had run up debts of £30,000k in (unsecured) loans. There was enough equity left in the flat to clear the loans thank god.

BUT She's 70 !!!!!! - that stinks on so many levels!!!!

I think the reason I think that she is spoilt is that she believes she is entitled to a high standard of living for doing nothing other than investing in property.

Now that the cash has stopped flowing from her "investment property" in Cardiff Bay in the form of the rising value of the property she is angry!!!! She doesn't believe that she should have to live on her pension. The Party's Over and she's not happy.