How have you benefited from low interest rates?

Graham_Devon

Cleaver wrote: »

I don't agree with Hamish's version of events either. But...

...one of his points is that a lot of people won't notice the inflationary rises in things. And if you're only losing £30 a year, you won't notice much, will you?

I believe his point was that people were actually better off this year, through wage rises.

Unless I was confused by this...

Originally Posted by HAMISH_MCTAVISH
The part most bears forget, is that if you spend 35% of your income on consumer goods or services that have inflated by 4%, but get a pay rise of 2% on 100% of your income, you're still better off in cash terms

System

Cleaver wrote: »

I don't agree with Hamish's version of events either. But...

...one of his points is that a lot of people won't notice the inflationary rises in things. And if you're only losing £30 a year, you won't notice much, will you?

T'is a fair point, I think people overstate the effects of inflation on them.

geneer

HAMISH_MCTAVISH wrote: »

Graham, what percentage of your wages do you spend on consumable goods that are inflating or were hit by VAT rises?

What percentage of your income do you spend on goods or services that are VAT free and/or static in price?

What percentage of your income do you allocate to mortgage, savings, pension contributions, investments, etc?

I spend around 20% of my income on food, goods and bills that are inflating. The rest is mortgage repayments, savings, pension contributions, investments, services, holidays, etc.

Things that are not inflating, in other words. (And before you quibble, my holiday this year is cheaper than last year for a comparable product, my barber hasn't raised his price in 3 years, the things I do for fun have mostly decreased in price as companies get more competitive for business, etc)

Inflation at 4% is meaningless to me and many other people..... My pay rise is 5%, and I reckon I spend just 20% or so of income on things that are inflating.

My personal inflation rate is tiny, my disposable income increases every year. My mortgage as a percentage of income decreases every year.

Now, what would make a dent in my disposable income would be a significant increase in base rates (very inflationary for me and millions others). But even then, the mortgage payment would only rise by a few hundred quid a month, and it'd still be far less than our combined pay rises over the last couple of years.

I accept that there will always be some people on the margins, for whom any rise in cost is very difficult.

But the majority will barely notice it.

And a significant minority will never feel it at all.... With disposable income increasing regardless of inflation.

Lordy. Is it just me or does Spamish seem to have the biggest case of "short man syndrome" on the forum.
We should call him mimi. As in "me me me me me".

Anyway, as to Sibleys predictably obvious troll, I forgot that its physically impossible to both have a mortgage and expect house prices to fall.

That aside, its certainly clear why one would want to boast about the random happenstance of benefiting from low interest rates caused by the economic collapse they didn't see coming in turn caused by the bubble they actively denied existed.

Its the PATENTED BULL DANCE OFF (C)2008.
Infinitely preferable than discussing the continued fall in house prices.
Obviously. :cool:

Cleaver

Graham_Devon wrote: »

I believe his point was that people were actually better off this year, through wage rises.
[/I]

I think I agree with you, in that most people won't be better off. Hamish makes an interesting point though, that you tend to think that if inflation is 4% and your payrise is 3% that you're worse off, but I guess you're not if you're only spending 50% of your income on things that are effected by inflation.

Inflation is a weird thing though, as you get the feeling that vast majority of people could probably cut their spending by probably 20% tomorrow with just a bit of effort and not really see any major decline in the way they live (or you could argue that their living standards might increase). Walk to work instead of the bus, make food at home instead of buying it ready made, quit smoking, run round a park instead of the gym, join a library instead of buying books, take your own lunch to work, stop throwing a third of your food away etc. etc. I know that some people can only do certain things, but I reckon that the average person could cut a lot out tomorrow without any problem. I guess when we see major signs of people doing this type of thing we will know we have real issues.

Cleaver

geneer wrote: »

Lordy. Is it just me or does Spamish seem to have the biggest case of "short man syndrome" on the forum.

I don't think there's anything wrong about drinking £200 bottles of stuff or buying a Ferrari if that's your bag.

What is a bit strange is telling lots of strangers about it on the internet and having an almost-constant two year argument about it with a man you've never met from Devon.

Graham_Devon

Cleaver wrote: »

I think I agree with you, in that most people won't be better off. Hamish makes an interesting point though, that you tend to think that if inflation is 4% and your payrise is 3% that you're worse off, but I guess you're not if you're only spending 50% of your income on things that are effected by inflation.

Inflation is a weird thing though, as you get the feeling that vast majority of people could probably cut their spending by probably 20% tomorrow with just a bit of effort and not really see any major decline in the way they live (or you could argue that their living standards might increase). Walk to work instead of the bus, make food at home instead of buying it ready made, quit smoking, run round a park instead of the gym, join a library instead of buying books, take your own lunch to work, stop throwing a third of your food away etc. etc. I know that some people can only do certain things, but I reckon that the average person could cut a lot out tomorrow without any problem. I guess when we see major signs of people doing this type of thing we will know we have real issues.

All true. Trouble is, thats the last thing the government wants, and the last thing the country needs, as it would lead to more unemployment.

geneer

HAMISH_MCTAVISH wrote: »

But "average" people don't spend what I do. I have expensive tastes.

"Average" people don't drink £200 a bottle single malts, or £100 wines.

"Average" people don't spend the money on food that I do, or on clothes, or most things.

When I earned less, I spent less. When I earned a lot less, I spent a lot less. I'd never dream of buying the things I do now if I earned an "average" income. I'd buy "average" items. Drink "average" drinks, eat "average" food. Wear "average" clothes.

I assume most people have the same restraint.

You go mimi.

:rotfl::rotfl::rotfl:Lordy. Its becoming quite apparent that Poor old Spamish is most likely well below average in a certain department.


But then I can talk. I own a space station, and regularly light my cuban cigars with burning £100 notes.
Possibly. :A

Cleaver

geneer wrote: »

I own a space station

Which one? My neighbours have just bought a Mir Dos-7, but it's the basic model without air con and leather trim, so I'm not that keen.

Running_Horse

AD9898 wrote: »

Let's face it, this thread is likely to attract the people with no debt or ones who've benefited significantly from low rates, it's in no way representative of the general population.

If my workplace is anything to go by, it's representative of the employed population with mortgages. Given how much tax we pay to those who don't work, why shouldn't we get a break for a change? None of us are using the money to fund a champagne lifestyle, just pay off debts and prepare for the hard times to come.

nearlynew

If inflation goes up a bit "just cut your spending"


And then cut it a bit more the next time it goes up.




Can you tell what it is yet?