Millionaire Challenge

Muhren

grumbler wrote: »

It's beyond me why everybody is so obsessed with the price of the house they own, is so happy to see it rising and upset when it falls... :huh:


It's a delusion! Rising prices are BAD for everyone except those who are going to

• die soon and leave the inheritance to their children,
• downsize (very few actually)
• emigrate (again, very few).

The rest fall into two categories.

First have no any plans of moving. For them the price of their house is irrelevant. It's not their wealth as they cannot spend this imaginable money.

Second want to upsize (most, I guess). For them rising prices is a BAD thing.

Also, it's good for our government, wanting higher inflation (to devalue its debt) and bigger spending (to collect more taxes) fuelled by this delusional rising wealth.

I am fully aware that it is all relative, but as the purpose of this thread is discussing becoming a millionaire it is going towards increasing my net worth and is why I included it in my post.

grumbler

Muhren wrote: »

I am fully aware that it is all relative, but as the purpose of this thread is discussing becoming a millionaire it is going towards increasing my net worth and is why I included it in my post.

My (vague) point was that for normal people with one property that they own and live in, net worth has to be calculated without the price of the property. It only confuses everything.


If someone is skint, lives in a £1M small house in London and doesn't want to move, is this person a real millionaire? I don't think so.

Muhren

I don't disagree with what you are saying regarding house prices. However as this thread is aimed at trying to achieve something, becoming a millionaire, with how you define that up for interpretation. There will be various ways to determine this, but I doubt anyone is that bothered either way, it is more a case of trying to better yourself rather than actually getting to that perceived magical figure.

CEW

Long time lurker and very occasional poster here. I just wanted to say that if you want to calculate your net worth then of course the value of your property should be included minus any outstanding loans against it.

Your net worth is the total of ALL your assets minus any liabilities and your home is an asset albeit not a very liquid one.

Well done Muhren on your progress.

troglodyte

grumbler wrote: »

It's beyond me why everybody is so obsessed with the price of the house they own, is so happy to see it rising and upset when it falls... :huh:


It's a delusion! Rising prices are BAD for everyone except those who are going to

• die soon and leave the inheritance to their children,
• downsize (very few actually)
• emigrate (again, very few).

I agree with you on the whole - if you don't plan to move then it makes no difference what your house is worth, and if you do plan to move and house prices go up by, say, 10%, then your house is valued at 10% more but a house twice the price goes up by double the amount that yours does, making it even less affordable!


In addition, if you do die, and house prices are high, your beneficiaries will have to pay more tax, so it's better for them if prices go down!


I often wondered why older people tended to live in run-down houses. I thought it was just because they couldn't bear the disruption of doing the place up, and to a certain extent I'm sure that is true, but of course it also reduces the value of a property for inheritance tax.

Chesapeake

Morning all, it's been a while!

It's great to see so many new posters in here, there was a point where there were only about 4 of us!

I've been wrapped up in my new (in April) job which has been going really well, I got my 12 month payrise in just 6 months as my boss was chuffed with my performance. My fianc! has also now moved to the brewery from the pub so she is now on regular hours and wages rather than shift work so we can finally plan and budget properly. We've also moved into a real house rather than a caravan and it is sooooo much cheaper than our old one in Cornwall (Hi Cornish Optimist!) as well as being bigger with a garden etc.

I'm incredibly lucky that my fianc! wants to spend the next two days planning, budgeting and generally sorting our lives out so I don't have to push it on her. She isn't very good with numbers but I'm good at explaining and she trusts me to make the right choices. I'm not 100% sure where our current net worth is right now but I'm pretty sure it's close to -£50,000 which is less depressing than it seems! £35k ish of that is student loans and an old business debt that I'm paying off at £10pcm with interest etc frozen so I'm pretty confident we can get the rest paid off by the end of 2019 with out much trouble. We're also starting a wedding fund, emergency fund and personal savings accounts... even if we only stash £10pcm in each it should give us a boost and provide a little inspiration.

I've found a whole bunch of UK based FI/FIRE blogs over the last few days which have really inspired me to get everything sorted and I'm pretty sure we are going to start our own. I'm not looking to make any money from it (though I'll try!) it's more as a public record to keep us honest, an inspiration for others and also a way to connect with other people in the same situation.

Right that's enough for now, hope you're all having a good start to 2019!

CornishOptimist

Chesapeake wrote: »

(Hi Cornish Optimist!)

Hi Chesapeake! Such a lovely part of the world to live in isn't it!


Hope everyone had a good New Years and is ready to attack 2019 with steely eyed determination!!


With regards to the house price discussion that's been going on, I really think that you include it, but you treat it like anything else. I mean, anyone who has a stock/mutual fund portfolio doesn't automatically expect it to rise all the time do they? It fluctuates, just like house prices!


By all means include it into your net worth, but it's totally different to having £1M in liquid assets.

Chesapeake

CornishOptimist wrote: »

Hi Chesapeake! Such a lovely part of the world to live in isn't it!


Hope everyone had a good New Years and is ready to attack 2019 with steely eyed determination!!


With regards to the house price discussion that's been going on, I really think that you include it, but you treat it like anything else. I mean, anyone who has a stock/mutual fund portfolio doesn't automatically expect it to rise all the time do they? It fluctuates, just like house prices!


By all means include it into your net worth, but it's totally different to having £1M in liquid assets.

Cornwall is lovely but after 12yrs there it was too small and the tourists drove me barmy!

I am always a little sceptical when people say property will always rise and rise and rise, if it does we're all screwed!

I'm actually hoping for a slump in property so that I have a chance of buying anything before I'm 40! Farm sales in Scotland have really slowed down in the last year, some cracking properties have been on the market for 12 months+. I'm hoping that post Brexit things will take a tumble so I can take advantage of it and find my dream farm.

Chesapeake

Incidentally the reason I want a farm is because there are almost infinite ways of generating cash on a farm if you can look after animals, grow things, you have buildings to use or a field to turn into a campsite.

You also can't beat a farm for slashing your COL by producing your own food, energy, etc etc. Not to mention that the farm is a business and you can claim back VAT on most things while not charging it on food produced, fuel and clothes etc are all business expenses etc...

If you want to be a millionaire and don't mind getting mucky then have a look at some of the awesome parcels of land available North of the Wall.

pkings

Agreeing with this one. I have also set myself to achieve a certain amount of money at the age of 24. I'm 23 but I am hoping I get the goal before I turn 25.