Moneysavingexpert campaign to help savers

Jimmy_31

ILW wrote: »

Where does investing become gambling?

From the very beginning.

Cleaver

Jimmy_31 wrote: »

From the very beginning.

No it doesn't. Linton's excellent post sums up why not.

Graham_Devon

Cleaver wrote: »

Well all investing is a gamble to a certain extent, as you're risking your capital. But you can assess the level of risk you want to take. Putting your money on red at the casino, or on a horse, is traditional gambling. You'll double or treble your money, or lose it all. I think some investing is like this - if you put all your money in to a AIM share, for example, that's gambling. All or nothing approach really, as you could be wiped out or double or more your money in 12 months with a lot of AIM shares. Which is fine, if you're comfortable with that and can afford to lose all the money you put in.

If you invest across a range of investments then I don't think it's gambling. There's risk attached, but if you weight your portfolio towards a bedrock of 'safer' investments and diversify across asset classes and countries then you're investing with risk attached, not gambling. My portfolio is set up so that it's very unlikely to gain more than around 20% a year or lose more than 20% a year (although this is being tested this year!). My overall aim is maybe 5% or 6% after tax each year over the long term. I don't think this can be classed as gambling.

Good question for this thread though.

So when people say they are buying a house, with an interest only mortgage, would you also correct them?

Cleaver

Graham_Devon wrote: »

So when people say they are buying a house, with an interest only mortgage, would you also correct them?

Sorry but I don't get what you mean? Correct them on what?

Graham_Devon

Cleaver wrote: »

Sorry but I don't get what you mean? Correct them on what?

Correct them and tell them they are not actually buying a house.

Cleaver

Graham_Devon wrote: »

Correct them and tell them they are not actually buying a house.

Erm, I dunno. Depends whether they have another way of paying off the capital. I'm still not sure what I'm meant to be 'correcting' someone on? An interest only mortgage is a dumb way to buy a house in most circumstances, that's for sure. But I guess if they are saving the capital somewhere, they'll still buy the house at the end. If they aren't saving for the capital then of course they're not buying a house, they're effectively renting one from the bank. Sorry Graham, I'm a bit lost with this one - what has all this got to do with the post of mine about my opinions on the difference between investing and gambling that you quoted?

OptionARMAGEDDON

ILW wrote: »

The true poor tend not to have much debt and are being hurt by inflation.
Those that are struggling due to just living a lifestyle beyond their means are the ones being bailed out by low IRs and high inflation. I cannot see that is the type of behaviour that should be encouraged and rewarded if we wish to get to a stable economy in the future.

because that behaviour drives forward growth in the economy. i am not talking about debt for consumption butdebt for investment. hoarding helps no-one and certainly not the economy. the only interest i pay is the small amount of interest on my house mortgage.

Really2

hallmark wrote: »

Because in the vast majority of cases the people with cash have spent most of their lives working & the people struggling are lazy toe-rags who've never put in the time or made the effort to get skills that would lead to a decent job. They'd rather just whine about how hard done by they are.

This might be an unpalatable truth for lots of people but it's a truth nonetheless. The fact is people who are unemployed & struggling through genuine hardship do exist but in most cases they're just lazy & would rather say it's impossible to get "the job they deserve" so they need to live on benefits instead.

Would you include the vast number of pensioners that did manual work and lived through a world war with that?
Many pensioners who worked through their whole working lives have just a state pension and no savings.

So I find your post pure nonsense.

ILW

OptionARMAGEDDON wrote: »

because that behaviour drives forward growth in the economy. i am not talking about debt for consumption butdebt for investment. hoarding helps no-one and certainly not the economy. the only interest i pay is the small amount of interest on my house mortgage.

I would suggest that the majority of personal debt (excluding mortgages) and a fair amount of government debt was NOT invested but spent on consumption. That is the reason we have a problem.
Current policies just seem to be trying to encourage more of the same mistakes.

hallmark

Really2 wrote: »

Would you include the vast number of pensioners that did manual work and lived through a world war with that?
Many pensioners who worked through their whole working lives have just a state pension and no savings.

So I find your post pure nonsense.

No I'm talking about people young & able enough to work. I'm in favour of improved state pensions on the grounds that most pensioners can't do much about their situation (in direct contrast to all young & able people who definitely can). Having said that anyone living off just a state pension & no savings has at the very least failed to educate themselves financially. Any of us who is relying on a state pension to support them is in dreamland & that's been true since state pensions began. Whoever heard of someone living well off a state pension.