House ownership - Selling yourself into a lifetime of servitude

chucky

twadge_face wrote: »

Thanks for your contribution. It's very helpful.

Always. Very. Helpful.

it's a pleasure, i always like to be of service with my contributions.

it was a decent put down though, you got to admit you got a bit angry with your ranting reply.

Kohoutek

twadge_face wrote: »

The fact is that as an investment, property is showing anything but a glowing outlook.

As somewhere to live with a reasonable deposit and a mortgage you can afford (along with job security), then that's pretty awesome and you should count your blessings.

Er...have you been following this thread mate?

It's called "House ownership - Selling yourself into a lifetime of servitude".

This thread isn't about investing into BTL, REITs etc. Debtistheft is saying that ordinary people should rent their primary residence for their entire lives to avoid the calamitous financial mistake buying a residential property through repaying a mortgage arranged with a high street financial institution.

I remember he said something on a previous thread about more money would be freed up for investment into publicly trading equities and corporate bonds, but I think it's reasonable to ask him to make his investment case.

twadge_face wrote: »

Similarly, I would never give my investment "tips" to anonymous people with unpronouncable, meaningless and pseudointellectual usernames.

My username is simply a random word, any connotations of being "pseudointellectual" is just your imagination.

I presume "Debtistheft" is intended to carry some kind of message...

Come on...let's all calm down (although actually this post is intended to wind you up)...

twadge_face

chucky wrote: »

it's a pleasure, i always like to be of service with my contributions.

it was a decent put down though, you got to admit you got a bit angry with your ranting reply.

It's just a bit of fun my little chucky chicken. You've got a funny idea of ranting. It's just my style, baby. Banter. Give and take.

If you read through my posts you'll note I veer between utter nonsense and really stupid nonsense.

Problem here is that people take themselves a bit seriously and need to be brought down a peg or, and/or seem to have a lobotomy of mirth, quite possibly at birth.

Kahoutek[Er...have you been following this thread mate?

Nope! Thought I'd drop in on the last page and stir things up!

It's called "House ownership - Selling yourself into a lifetime of servitude".

Good point. I should pay attention to titles at least...

This thread isn't about investing into BTL, REITs etc. Debtistheft is saying that ordinary people should rent their primary residence for their entire lives to avoid the calamitous financial mistake buying a residential property through repaying a mortgage arranged with a high street financial institution.

Oh cheers for the summary pal. Hm, put it like that and renting forever doesn't seem quite so clever. Perhaps if we were more like the German model

I remember he said something on a previous thread about more money would be freed up for investment into publicly trading equities and corporate bonds, but I think it's reasonable to ask him to make his investment case.

OK, I didn't know the background and thought you were just being disruptive as a deliberate derailing tactic! Hence I chose to "stir it up"...

twadge_face wrote:

Similarly, I would never give my investment "tips" to anonymous people with unpronouncable, meaningless and pseudointellectual usernames.

Hee-hee so I touched a nerve?

Kahoutek wrote:

My username is simply a random word, any connotations of being "pseudointellectual" is just your imagination.

As I said to the ironically-named and humourless chucklesome one, I was just responding like-with-like. Funny thing is that I did Google it and it IS a real thing!

http://en.wikipedia.org/wiki/Comet_Kohoutek

Conversely, my name is as puerile as I am... :cool:

I presume "Debtistheft" is intended to carry some kind of message...

And he's right you know. It's just that that idea isn't as simple as all that either.

Come on...let's all calm down (although actually this post is intended to wind you up)...

YOU FAKKIN' WHAT!? :mad:

chucknorris

Thrugelmir wrote: »

Gross yields on corporate bonds are on the whole well below 8%. Companies such as Tesco, Vodaphone, GSK trade in 5% to 6% range. This doesn't allow for the capital loss either on redemption.

So often better to own the shares.

I think you missed my point, which was if held in an Isa 5% = 8.33% gross for a 40% tax payer

chucky

twadge_face wrote: »

Problem here is that people take themselves a bit seriously and need to be brought down a peg or, and/or seem to have a lobotomy of mirth, quite possibly at birth.

who died and left you in charge !!!!! face?

Thrugelmir

chucknorris wrote: »

I think you missed my point, which was if held in an Isa 5% = 8.33% gross for a 40% tax payer

Not all all. The figures I quoted are gross yields.

I've been selling out of Corporate bond funds in recent months as majority of Blue Chips are trading at par or even a premium to nominal value.

Had a quick look. The only main bond yielding 8.33% is Enterprise Inns (as at the close of play yesterday).

Personally I see it harder and harder to make a reasonable return without taking a degree of risk. There's little in the way of good value or easy opportunities.

chucknorris

Thrugelmir wrote: »

Not all all. The figures I quoted are gross yields.

I've been selling out of Corporate bond funds in recent months as majority of Blue Chips are trading at par or even a premium to nominal value.

Had a quick look. The only main bond yielding 8.33% is Enterprise Inns (as at the close of play yesterday).

You are still missing the point, which is because it is an Isa it is tax free, so that tax free 5% is worth 8.33% gross (to a 40% tax payer).

To remind you, this is what I posted:

Individual corporate bonds
Safer ones do not pay much over 5% so not much better than savings bonds, although if they have more than 5 years to run you can put them in an ISA wrapper so that 5% can become 8.33%. So I only see these as somewhere to eventually transfer my stocks and shares Isa investments to.

debtistheft

chucknorris wrote: »

You are still missing the point, which is because it is an Isa it is tax free, so that tax free 5% is worth 8.33% gross (to a 40% tax payer).

To remind you, this is what I posted:

Individual corporate bonds
Safer ones do not pay much over 5% so not much better than savings bonds, although if they have more than 5 years to run you can put them in an ISA wrapper so that 5% can become 8.33%. So I only see these as somewhere to eventually transfer my stocks and shares Isa investments to.

Goodness me, talk about digging your own grave. When that 5% gain goes into an ISA it is worth 5%. If it goes into a standard share dealing account AND you have breached your Capital Gains allowance for the year (over £10k, so quite generous) THEN you would pay income tax.

Thrugelmir

chucknorris wrote: »

You are still missing the point, which is because it is an Isa it is tax free, so that tax free 5% is worth 8.33% gross (to a 40% tax payer, as I stated in the original post)

A notional gross. Which isn't a rationale for investing in my book.

On that basis for example. Vodaphone shares currently yield a gross 8.18% within an ISA. While VOD 5.625% 2025 yields a gross 8.13%, and is trading at £6.94p over par £100 nominal value.

So the shares have a better a marginally better yield with prospects of increased payouts.

dtsazza

chucknorris wrote: »

I made it quite clear that I was comparing the net to the gross

Thrugelmir's right, there's almost never any point in comparing gross yields of anything, if the net yields are known. Especially in this situation where most comparable instruments could also be held in a tax-free form.

In fact, if this thread is still about the evils of homeowning as a financial burden - the yield one makes on the house purchase is in the absence of rent, which by its nature is also entirely tax free.