My Interest rate gamble pays off again!

nollag2006

Yup - your chum brit1234 piled into gold last September. What an astute move that was - choosing to gamble on commodities, rather than invest in a home.

DervProf

nollag2006 wrote: »

Yup - your chum brit1234 piled into gold last September. What an astute move that was - choosing to gamble on commodities, rather than invest in a home.

I wouldn't pile into gold at any time, is that being astute or financially dumb ? Looks like it was a dumb move to not buy lots of gold in 2007. However, I did buy a house in the mid nineties, so I suppose that balances things out. Oh, hang on a second, I didn't then buy a bigger/better property, or at least one BTL. I suppose that makes me financially inept.

Seems to me that for many of this forum's members, the only financially astute thing to do is to buy property(s) at any time (and not shared ownership either).

wotsthat

Graham_Devon wrote: »

Yes you can buy more later.

Advantages of neither? I'd disagree. Has both disadvantages and advantages.

Yes I'm probably being over negative.

I'd suggest though that whatever advantages there are are biased towards whoever owns the other half.

I do wonder with shared ownership whether it would be better to simply buy all of a cheaper house instead. The gains and losses would be similar but there'd be a wider range of mortgages, being able to sell at whatever price you wanted etc.

nollag2006

DervProf wrote: »

Seems to me that for many of this forum's members, the only financially astute thing to do is to buy [STRIKE]property(s)[/STRIKE] gold at any time (and [STRIKE]not shared ownership either[/STRIKE] other shiny metals that offer nil yield, and are highly volatile).

Corrected that for you.

sabretoothtigger

Percy1983 wrote: »

This is very true, we had a lot of luck with timing, the funny thing was we had debts between us and in the time we paid them all off houses dropped for around we had paid off debts in the same time, so strangley if we had not run up debts and bought earlier we would now be at a similar point financially but with less belongings.

As said that was pure luck.

I wouldn't call it luck, serendipity maybe. This is not coincidence, its often the way if you take your time to do it right there can be a bonus to that.
The alternative is to join a queue because its so long, it must be worth having
The fact you didnt know doesnt deny you credit for good practice. I figure most of life is about what we dont know more then what we assume we do
http://en.wikipedia.org/wiki/Blindspots_analysis

I wouldn't pile into gold at any time, is that being astute or financially dumb ?

If you hold cash to some extent you rely on gold anyway. Though thats unlinked and increasingly distant. To deny cash wasnt related to gold is revisionist. Lots of people pile into cash just by selling a house and holding the proceeds that way

Graham_Devon

wotsthat wrote: »

Yes I'm probably being over negative.

I'd suggest though that whatever advantages there are are biased towards whoever owns the other half.

I do wonder with shared ownership whether it would be better to simply buy all of a cheaper house instead. The gains and losses would be similar but there'd be a wider range of mortgages, being able to sell at whatever price you wanted etc.

Not really true, no.

Of course there are some advantages in shared ownership to the organisation that owns the other half, but nothing they can really cash in on. They are normally not for profit organisations.

Worth remembering, as I always state in such discussions, there is shared ownership and the newer shared equity. They are two seperate things often confused. Shared equity DOES give the advantage to the builder and mortgage company. Shared ownership doesn't.

As to your last point, if you could raise the finance and afford the payments (and I do mean afford, not just get by month to month) to buy all of a house instead, it's a no brainer.

Most people who opt for shared ownership cannot get the full house however, therefore there isn't that option to mull over.

This is the same across everything though. A new car is a better bet for lower bills, lower tax and reliability than a 5 year old car. But again, if you can't raise the finance or can't reasonably afford the monthly payments on a new car to suit your needs, you don't have that choice and the 5 year old car is the only choice you have.

Pobby

Love the thread. Should be " My willy is bigger than your willy " All these astute people ( cough cough ) that got in and out of investing " just at the right time " can`t believe how clever they are. Some have only a £250,000 mortgage.

Interest rates will be low for ever! Who in this world can even see this coming. I said on another thread that we are living in a world of complete insecurity. I wouldn`t start knocking people as being as astute as you think you are. You might, yes might, one day regret that. I hope not but many are going through the wringer right now.

In my 60`s and proud of working all my life, yet due to illness my business is gone. I know many in middle age who have lives changing. Unemployment, divorce and death.

Might I suggest that a number of posters here take on board that they have entered a gamble. Certainly larger than I can think of since the dreadful period of the late 80`S when interest rates went through the roof. I really cannot see the point of attacking each other. There are far bigger forces out there.

Maybe take a break, open your minds a little, and see what happens.

RenovationMan

Pobby wrote: »

Love the thread. Should be " My willy is bigger than your willy " All these astute people ( cough cough ) that got in and out of investing " just at the right time " can`t believe how clever they are. Some have only a £250,000 mortgage.

Interest rates will be low for ever! Who in this world can even see this coming. I said on another thread that we are living in a world of complete insecurity. I wouldn`t start knocking people as being as astute as you think you are. You might, yes might, one day regret that. I hope not but many are going through the wringer right now.

In my 60`s and proud of working all my life, yet due to illness my business is gone. I know many in middle age who have lives changing. Unemployment, divorce and death.

Might I suggest that a number of posters here take on board that they have entered a gamble. Certainly larger than I can think of since the dreadful period of the late 80`S when interest rates went through the roof. I really cannot see the point of attacking each other. There are far bigger forces out there.

Maybe take a break, open your minds a little, and see what happens.

Oh Pobby, why do you try an stir up arguments with 'willy' comments and '£250k debt' digs and then end your post telling us all to stop attacking each other? Does it not smack of rank hypocricy?

As far as people claiming they were astute, I suggest you read the thread. Hold on, I'll save you the bother:

Graham_Devon wrote: »

As dervprof suggests....financially astute would be buying what you can afford?

Devon was asking whether it is financally astute to 'buy what you can afford' (can you see the "?" at the end of his remark? That means he is asking a question.). I indicated that I thought not. For example, if I had £50k spare and bought all the bank shares I could afford, would it be financially astute to just buy them without researching whether it was the right time to buy them (or indeed whether my money would be bette invested elsewhere)?

My stance on Devon's question about whether it is 'financially astute to buy what you could afford' was that if someone entered into a house share in 2006/2007 at peak prices and just prior to a crash, then one would struggle to find any astuteness. Are you saying that you think differently?

As to my own finances (i.e. your £250k mortgage dig). As I have stated many times, I researched my position and decided that it would be a relatively safe bet to expect interest rates to stay low for years - not forever - but for years (this research has proven to be correct for the past 2 years and most pundits reckon they will stay low for another 2 years). I therefore based a house purchase on this. I had a 5x salary mortgage when I bought the property and two years later I now have a 4x salary mortgage. I fully expect interest rates to remain low for the next couple of years and I intend reducing that salary multiple even further - perhaps to the acceptable 'bear standard' of 3.5x salary. I also intend remortgaging to a low rate 10 year fix.

You can only determine whether any decision, financial or not, was astute in hindsight. If rates double tomorrow then my decision was not financially astute. If rates stay the same, allowing me to continue to pay down my mortgage and get a low 10 year fix, then my decision was financially astute.

This is a discussion board Pobby. Deven asked a question/made a statement and we discussed it. If you want ((((((HUGS)))))) then go to the debt board or the 'nice people' thread.

Graham_Devon

RenovationMan wrote: »

My stance was that I think it would be difficult to say that buying a share of a house at peak prices could be described as financially astute. Are you saying that you think differently?

Question: How does anyone know, when buying something, that it's peak price?

Until of course, time moves on and you can use hindsight?

You do realise I can buy the other share cheaper now...don't you? So if I wanted to, as prices have decreased, I could buy the next half cheaper than I did the first, rather than buying 100% at peak price.

As I say, advantages and disadvantages, but absolutely none of this has anything to do with how financially savvy you. All your boring slurs are based on hindsight. Though still biting you on the bum as I can now buy the other half at a "discount".

wotsthat

Graham_Devon wrote: »

Question: How does anyone know, when buying something, that it's peak price?

Until of course, time moves on and you can use hindsight?

Question: at the time you bought your house were you posting here? If you were I can almost guarantee that you will have been saying that buying wasn't cheaper than renting and house prices were 'simply' too high. And yet you bought.

I know the point you're making though. My view is that if someone wants to buy a house, has the finance, deposit and thinks they've got a decent deal on a house they like then the time to buy is now whether that 'now' was in the nineties, 2007 or today. If a house falls in value it doesn't necessarily follow that the decision to buy was unsound.

Of course it's less of a difficult decision if you're moving house because even if you buy at peak you'll have just sold at peak so that balances things out somewhat.