Millionaire Challenge

HAMISH_MCTAVISH

guitarman001 wrote: »

It's hard not to be bitter when you're on a good wage yet the cost of property forces you to stay at home, denying you the chance of starting a family and a roof over your head.

Eh???

I've read your posts on hpc and you're not forced to live at home. You just don't want to buy or rent in areas you can afford.

That's nothing other than "champagne taste on a beer budget".

I wasn't trying to be overly negative regarding property - it's just that there is a fantastical bias toward it here.

Not at all.

This is the way people in the real world think. Where property is just like any other asset class.... A means to an end.

You're just the victim of all that crazy brainwashing nonsense from spending too much time on hpc.

And we are going into a big slump.

The crash ended nearly 3 years ago. :money:

This is the "bumping along the bottom" phase.

the difference between property and shares is that a roof over your head is something people should have the chance to afford. If my mate buys shares that doesn't affect too much how much a loaf of bread or a flat costs. But buying into the housing miracle pushes prices up for everybody, BTLers buy up houses starters could be buying themselves - basically it pushes that basic need up and up. No, I think shares and property are somewhat dissimilar in those respects.

It's pretty simple really.

What has driven up prices in this country is a fundamental shortage of housing. Which is why rents are soaring, and house prices are hovering just 10% or so below peak despite 70% of mortgage funding being removed from the market, unemployment rising, and us having the worst recession in a century.

There is absolutely no prospect of building enough houses to meet the need for the next decade or two, so there is only one direction the property market will be taking over the long term, and it ain't down.;)

Now you can either position yourself to take advantage of that fact, or not. Entirely up to you.

But don't be surprised when other people take advantage of the opportunity if you don't....

lessonlearned

geoffky wrote: »

Too many books has got to you...put them down and start making yourself rich, not authors.

Errr - I'm not the one reading all those books, talking in mirrors and doing silly exercises. I'm the one that has just spent the last 6 years looking after my disabled husband. If you read my posts you will see I'm one of the ones who advocates hard work and less day dreaming.

My mantra is "The only place where success comes before work is in a dictionary".

Guitarman - I understand your points about house prices and affordability and have great sympathy with anyone in your position.

I have two sons who are exactly like you. When I was their age I owned my own property - on a secretary's salary. That would be impossible now.

I'm afraid it's down to market forces and lack of new builds. We are a small overcrowded island and we don't build or renovate enough houses to house our increasing population. Brown field sites that could be reused are allowed to lie idle and there are 1m properties standing empty, just going to rack and ruin - now that's the real scandal not landlords.

I entirely agree with the "meanness of UK property", small poky rooms, tiny gardens. Other countries do put us to shame in that respect.

Re my business plans - a couple of BTL's hardly makes me a property magnate:rotfl: In my dreams....

No my real business plans are to build on my beauty therapist skills, with antique and bric-a-brac dealing and jewellery making as little sidelines. Plus what other deals come my way.

BTL is for when I am too old and decrepit to do anything really physical - at the rate I'm going that won't be too long now.:rotfl:

The point re stocks and shares is that as an investor it's probably better to invest in what you know and understand. I know and understand property.

I wasn't suggesting for one moment that you shouldn't post - it's just that I felt your negativity could so easily demoralise people who are, let's face it, just wanting to better themselves. It sounded a bit like you were just one of those people who think it's ok to trample on people's dreams and hopes. I'm sorry if I misread you.

The way I see it the whole "Millionaire" bit of the challenge was just Tinktay's way of introducing a challenge that was lighthearted in tone but would encourage people to improve their lot in life.

1m is probably way out of my league but by joining in it is helping me to stay focussed. - rather in the same way that a slimming club helps people to stay on track.

And ................it's a bit of fun.

guitarman001

Rictus - good luck to you. I'm just fundamentally against the idea, plus I think the smart money's out of property for some time. Mortgage-free by 30 is an excellent goal. I'd aim for 40 for that one. I don't want to be a millionaire, just mortgage-free with plenty of spare money for investing/rainy days. What was your loan for?

Hamish, I could give you a hundred examples about people who were (inflation-adjusted) on the same salary as me when they started work and those engineers could go out and afford big houses. They're still far too expensive. You've been saying for ages that the end is over but it's not, prices are still falling, even in Edinburgh where it's said they never would! Inflation-adjusted it paints an even worse picture. I realise very well just how much property is ingrained into the average Brit, but I think that THAT is brainwashing. You know I almost bought twice... and when I bailed out both times (for good reasons) I saw it for the con it was. Living at home I am now in a far superior position (financially) to my peers who have bought. I don't buy the supply:demand argument. If that were true then with all the 'normal' thinking about property people would think they'd be getting a bargain now and prices would be 'rocketing' but they're not. It's all down to lending, which is non-existent now. The housing market hasn't gotten any better since you stopped posting over there, so I suspect a year and more from now it also wont be any better.

lessonlearned - would you be willing to take a 50% hit on the value of your home if it meant your boys could truly afford a place of their own? I know many people that would say no - tough luck. Kudos to you for taking care of your disabled husband - trust me, I'm in a different situation but I can relate. It is a sorry point you mention about being able to buy a house on a secretary's salary those years ago but not now - so what sort of future DO you see for your boys? Again, I'm adamant it's down to bank lending and not supply and demand (at least not so much). Fair play for having those other business plans - hope they go well. Wont BTL be an even harder investment as you get older?

I guess I was just disappointed as I read the title and looked forward to varied business ideas - instead I come across the whole property thing again. You can understand why I'd be a bit depressed reading about that! You've got to admit, somethings gotta change....

shmeeko69

tinktay84 wrote: »

I sat pondering on what ive achieved in my 27 years and realised that anything ive ever said I wanted to do or wanted to have I have managed to achieve.

Last year after 10 years in catering I completely changed career and last week I achieved a distinction in painting and decorating. This got me thinking that since I always achieve goals I set myself what could I do next....

Thus the Millionaire challenge!

So phase 1 is opening a savings account and getting money building up...

I work for myself so have a bit of control over my earnings, we have 1 property that we rent out and my husband has a decent (secure) job.

My aim is to get to the million mark by the age of 40 (im 27 now)

So how many of you think im mad and its impossible :rotfl: and how many of you think i'll do it and have ideas to help me :T

I certainly don't think you're mad in fact it's probably easier to make money in a recession if you have spare cash, as you can buy various items at reduced prices and hold on to them and sell them on at a later date when the economy eventually picks and with that inflation. If you don't have any surplus cash then, it will always be a problem and especially in the current economic climate.

All the best for the next 13 years

Mark

lessonlearned

guitarman001 wrote: »

lessonlearned - would you be willing to take a 50% hit on the value of your home if it meant your boys could truly afford a place of their own? I know many people that would say no - tough luck.

How would this help the countless numbers already in negativity equity.

You said that you really want to see property values crash.

Is this really true. If so, then I'm afraid that my initial assessment of your first post is beginning to look accurate. You are happy to trample all over others.

Have you listened to yourself. Are you really serious that you are happy to see everyone else crash and burn just so that you can get your foot on the property ladder. If so, that is a sorry comment on your moral compass.

If the only way you can be a success is to ride rough shod over everyone else then God help you.

........ what sort of future DO you see for your boys?

They will have to knuckle down and work just like everyone else. If I can rebuild my finances then I will give them a leg up

Wont BTL be an even harder investment as you get older?

Of course. I've never once said it would be easy.

I guess I was just disappointed as I read the title and looked forward to varied business ideas - instead I come across the whole property thing again. You can understand why I'd be a bit depressed reading about that! You've got to admit, somethings gotta change

Sorry but it won't - supply and demand - simple as.

allthingsmustpass

lessonlearned wrote: »

Sorry but it won't - supply and demand - simple as.

So what happened in and around 2008 that saw average prices drop? Was there a mass exodus from the country? Did thousands of properties spontaneously appear? Or did available credit dry up suddenly?

lessonlearned

Sorry - I was talking about the long term trajectory.

As I've said I've worked in an around property most of my adult life and have witnessed several slumps. So far property values have always recovered. I suppose there could be a first time when this didn't happen.

Can't quite remember what the UK population is currently at - around 62 million I think, but already it is estimated that this figure will rise to around 70 million at some point (I think it was 2050) - not sure.

Unless building keeps pace then prices can only rise.

In 2008 the property market was seriously overheating, the bubble had to burst sooner or later. A similar thing happened in 1988. I bought my current house in August 1988, by October it's value was reduced by about 20%.

TBH the only time these rises and falls really mean anything is if you need to buy or sell. If you can afford to stay put or if you have no intention of moving for a while then it doesn't really matter that much. It's just "paper" gains and losses - the same as shares or any other assets. The time when it really matters is when you need to liquidate and/or borrow or refinance.

Your'e quite right about 2008 and lack of available credit due to the banking crisis. A similar thing happened in the mid 1970's triggered by the oil crisis, the 3 day week, £1 devalued and a mortgage famine.

History does have a habit of repeating itself.

HAMISH_MCTAVISH

allthingsmustpass wrote: »

So what happened in and around 2008 that saw average prices drop? Was there a mass exodus from the country? Did thousands of properties spontaneously appear? Or did available credit dry up suddenly?

Wait....

So you're saying that when you remove 70% of mortgage funding from a market, prices will fall?

Shocker.

The more relevant question is why prices are now only 10% below peak, despite mortgage funding still being only a third of what it was in 2007.

Particularly when prices in other countries which suffered identical mortgage funding famines are down far further.

Prices in the USA are down 40% from peak, and in Ireland are down 50% from peak.

Ireland had record low base rates, liquidity support, help for homeowners, bank bailouts, etc yet prices fell off a cliff.

The USA had record low base rates, liquidity support, help for homeowners, bank bailouts, QE, etc, yet prices fell off a cliff.

The UK had the same interventions, and prices rebounded strongly to just 10% below peak and have stagnated ever since.

I don't suppose this may have something to do with it....

Empty housing rates:

USA - 13% and rising

Ireland - 17% and rising

UK - 3% and falling

allthingsmustpass

lessonlearned wrote: »

Unless building keeps pace then prices can only rise.

But surely these prices have to be within the realm of affordability, they can't just rise up and up forever. If I can't get a mortgage to the amount the seller will accept I can't buy the house, and the seller can't sell it. So they will have to reduce the price to an affordable level, or not sell. This is what we're seeing now, very little is moving due to sellers unrealistic asking prices. They also believe that property just goes up forever... this is true for as long as the banks were lending enormous salary multiples to anyone with a pulse. That's over now, and won't return for the rest of our lifetimes. Watch the news... this irresponsible lending has bankrupt banks and countries! House prices have nowhere to go but down, and perhaps that is unusual.. but this debt crisis is unprecedented. It was always going to end this way, ever rising prices is unsustainable.

HAMISH_MCTAVISH

lessonlearned wrote: »

Can't quite remember what the UK population is currently at - around 62 million I think, but already it is estimated that this figure will rise to around 70 million at some point (I think it was 2050) - not sure.

Unless building keeps pace then prices can only rise.
.

At current rates of increase, the population will hit 70 million by 2026.

We are adding 470,000 people per year, and only building enough houses for less than half that amount. As a consequence, the number of empty houses is shrinking rapidly, and millions of people are now living in overcrowded conditions.

Rents have also soared to record highs despite rising unemployment, housing benefit cuts, and the aftermath of a recession.

Additional new household formation is running at 275,000 households per year, and thanks to the mortgage famine we only built just over 100,000 houses last year, the lowest level since 1923. after all, builders won't build what they can't sell.

The shortage is worsening, the pressure building, and the next boom will be a monster as a result.