A Bear Story

Cleaver

pinkteapot wrote: »

A guy in my office sold his house and is renting, as he believes house prices have got a long way to fall.

He's now looking at BTL flats as he's so unimpressed with the returns being offered by banks on cash.

:huh:

This isn't a 'bear story', it's a story of someone who isn't particulary savy in terms of investment and financial planning.

rizla01

Cleaver wrote: »

This isn't a 'bear story', it's a story of someone who isn't particulary savy in terms of investment and financial planning.

Based on what Cleaver?

Where is the 'Bad Financial Planning'?

Or have I misread the OP.

Is it because he is renting or because he chose BTL's over the bank as an investment?

How do we KNOW that he isn't renting in order to release more funds for investing.

Thrugelmir

rizla01 wrote: »

Is it because he is renting or because he chose BTL's over the bank as an investment?

There's a significant risk factor that is being totally ignored when using BTL and bank deposit account in the same sentance.

A BTL is a business not an investment.

Financial literacy has totally been eroded away.........

rizla01

Thrugelmir wrote: »

A BTL is a business not an investment.

.........

Thats what I mean.

Is that why he is being slated?

Thrugelmir

rizla01 wrote: »

Thats what I mean.

Is that why he is being slated?

There's an old saying "only gamble with what you can afford to lose".

Also a core principle of any business idea is to understand the market you are investing in.

Cleaver

rizla01 wrote: »

Based on what Cleaver?

Where is the 'Bad Financial Planning'?

Or have I misread the OP.

Is it because he is renting or because he chose BTL's over the bank as an investment?

It's nothing to do with either of those. I have no truck with people getting a BTL and I have no problem with people using cash savings, it's all about risk and reward.

But the person in the OP#s example sold his home and is not happy with the returns he's getting in a bank, which are presumably in cash savings. Who on earth would sell their family home for financial reasons and not have a decent, balanced investment plan for the money? People who are financially savvy and sold their house for financial, not personal, reasons would know what they would do with the cash. The person in the OP has clearly had no plans as to what to do with the money which was mistake number one. Mistake number two is now throwing all the money at one investment, in this case BTL. Please don't read in to this that I'm saying BTL is a bad investment, I'm simply saying that not having an investment plan or throwing all your money at one asset are two very poor financial decisions.

Cleaver

rizla01 wrote: »

Is that why he is being slated?

I slated him because, on the information I was given, the person doesn't sound financially savvy in terms of planning what to do with their money. It has nothing to do with the asset(s) they have chosen to invest in.

Loopgames

Cleaver wrote: »

It's nothing to do with either of those. I have no truck with people getting a BTL and I have no problem with people using cash savings, it's all about risk and reward.

But the person in the OP#s example sold his home and is not happy with the returns he's getting in a bank, which are presumably in cash savings. Who on earth would sell their family home for financial reasons and not have a decent, balanced investment plan for the money? People who are financially savvy and sold their house for financial, not personal, reasons would know what they would do with the cash. The person in the OP has clearly had no plans as to what to do with the money which was mistake number one. Mistake number two is now throwing all the money at one investment, in this case BTL. Please don't read in to this that I'm saying BTL is a bad investment, I'm simply saying that not having an investment plan or throwing all your money at one asset are two very poor financial decisions.

The OP had just 2 sentences about one guy - and you're analysis is full of assumptions which have not been verified.

There are lots of facts we aren't aware of. So he may be taking a high risk and calculated scenerio or he may be a gambler and taking a chance. I personally think that for someone to sell a large asset like their home is generally aware of the different outcomes their investment decision may bring.

I'm speaking as someone who sold their home in 2010 to look at investing in houses as buy to lets.

rizla01

At long last SOMEONE is seeing from the same side of the fence as me.

He could have sold for a number of reasons.

To sell because he believes the bottom is going to fall a lot further is not very savvy, unless he knows somethig that most of us don't, I think.

He might possibly have been offered a 'Cant refuse' offer but decided to rent regardless.

Perhaps he intends moving jobs and prefers to be more flexible.

He is now looking at ALL options, no doubt - One of them a BTL (or two).

I just couldn't understand the reason for comments #2-#10!!

It never ceases to amaze me the mentality of the experts on here armed with such little info, who cast such unworthy judgements.

Sorry if that isn't in line with the norm, nowadays.

Thrugelmir

rizla01 wrote: »

It never ceases to amaze me the mentality of the experts on here armed with such little info, who cast such unworthy judgements.

You don't have to be an expert to comment.

Somethings in life are common sense, or at least should be.

Trouble is everybody is after quick returns. While some are lucky. The majority are not.