Why are people in this country so stupid?

ukbondraider

I thought I would just add some spice to the mass of house price crash threads and ask why people in the UK are so dumb?

We all know that house prices are at their peak and we all know that interests rates can rise so why as a nation have we not adopted the mentality of fixing our mortgages when we buy our houses? I dont mean a 2yr fix or a 5yr fix but a fix for the duration of the mortgage e.g 25yr or 30yr? Why have we never fixed our mortgages for a long period in the past as standard? We would all know our costs and regardless of fluctations in rates we would all still be able to pay the mortgage off and live through any turbulence meaning mass repossesions and crashes would not occur.

Why do people in this country also max themselves out? i.e why does everyone buy a bigger house than they can afford only to equip/decorate it with rubbish?

Why do people always spend carelessly? The number of £30-50K cars sitting outside £100-200K houses just amazes me as does the number of council flats with a sky dish.

Why does everyone buy brand new cars and with finance? You are better off losing the cash at a roulette wheel.

Why does everyone take out loans? If you cant afford it dont buy or do it.

Also why as one of the great countries in the world are we relatively speaking so under skilled? We are on the whole rubbish in our communication skills especially when compared to the US and we arent as smart academically as our European or Asian friends. With the "old boys network" gradually being replaced with true talent in the business environment it is no surprise why in the current generation, we find that most of the top firms in this country are run and largely staffed by non british people. Of the small british folks that are indeed present in these big firms they are usually British Asian and not British white.

This country always amazes me and yes I am British White.

HugoSP

Because most people are obsessed with material weath.

All the material items you mentioned in your post are status symbols. There are a lot of fragile egos about.

The only other possible explanation for the bigger houses that can be afforded are that people believe that in the long term their property investments are wise. This is a view that I subscribe to.

My father advised me to take out the biggest mortgage I could. That was in 1993. I took his advice, bought a nice detached 4 bed house aged 27 that was being sold due to a divorce and paid around 10% less than its true worth.

This was helped by the fact that I bought my first house when I was 19, and enjoyed over 100% capital growth on my equity.

Yes, things were very tight after I completed the purchase but we carried out a few home improvements to it over the next 8 years. IMO we maxed out its potential, and didn't spend a great deal on it.

I remorgaged it to by an investment property, which is now renovated and rented out.

I swapped it for another investment property in 2003. I got top price for it and IMO got a great house with huge potential.

However, I never spend more than £3500 on a car, unless it is my work van which is a business asset. We don't need a foreign holiday every year and we don't buy designer clothes.

Any large spend has to have a business case attached to it. That is the way I am.

roswell

Maybe because if you fixed for 30 years 15 years ago you would ahve been paying over the odds when the interest rates came down ??

Cars well thats personnal choice but probably funded by the remortgage, As said may fragile egos and a strange belief that a Range rover to take the kids to school proves you have money even when you dont.

Hereward

ukbondraider wrote:

We all know that house prices are at their peak and we all know that interests rates can rise so why as a nation have we not adopted the mentality of fixing our mortgages when we buy our houses? I dont mean a 2yr fix or a 5yr fix but a fix for the duration of the mortgage e.g 25yr or 30yr? Why have we never fixed our mortgages for a long period in the past as standard? We would all know our costs and regardless of fluctations in rates we would all still be able to pay the mortgage off and live through any turbulence meaning mass repossesions and crashes would not occur.

I seem to recall that many farmers took out long term fixed loans in the 1980's with rates around 15%. These farmers have been unable to get out of these loans as the savings made from a smaller interest rate would be wiped out by the penalty charges. Fixing you interest rate over the term of your mortgage would only work if you are extremely confident that there won't be a large, prolonged, decrease in the base rate during the term of the loan.

brazilianwax

My hubby and I have a joint mortgage on our house, but no other loans. We have a £35k car which was bought in cash (and another more sensible car), and use credit cards for convenience only - they get paid off with no interest paid.

Our mortgage is conservative compared to our joint income - partly because we both bought houses early in life (I was 19) and realised a lot of money when they were sold, and partly because we don't want to be forced to have to earn a certain amount of money (we could afford to take a drop in income of £20-30k per year if we wanted to/needed to).

We do know another couple, however, whose debts are incredible. They have 4 children and are still paying for cars they bought on finance several years after buying them. They own a successful company and take enormous salaries but spend far far beyond their means. Current estimate is 8-10 years to pay it all off (although I'm guessing that will increase as he's about to buy a £50k car on finance) :rolleyes:

Their kids have no hope of ever knowing the value of money. I think it's really quite sad.

Alan_M_2

Who offers fixed mortgages for 20 + years? And if they are offering it, at what rate compared to current base rate?

An often quoted line is "If it appreciates, buy it. If it depreciates lease it." - John Paul Getty said this...He did rather well, and this makes a whole lot of sense to me, fundamentally it means you have no capital tied up in depreciating assets.

I generally lease vehicles, always have done, but then I run a business which gives me better deals on vehicles and far better tax advantages. Business leasing is fundamentally based on the running costs and deprecation of a vehicle, as a result this throws up some oddities.

For instance, I'm taking on a new marketing guy in a couple of months and I need to provide him with a decent vehicle. I can lease an Audi A4 Diesel Avant 2.0TDI for less than either a Mondeo or Vectra of similar spec, even though the car costs nearly £8000 more, it depreciates a lot less, costs less to run, is more efficient and is therefore a better deal.

Have you ever wondered how all these people can afford all the new Aston Martins? Well, most of them are on business leases, and the thing with Aston Martins is they are so sought after that first year depreciation is almost negligible, that means lease deals are available for astonishingly affordable amounts of money on what are £100K vehicles.

56% of all employees in the UK are employed by privately owned small businesses (government definition of a small business is less than 250 employees).That means there are a lot of people who own these companies that are quite comfortable. There are a lot of people in this country that genuinely can afford all of the things discussed in the first post....but equally there are many people stretching themselves in an effort to keep up with the Joneses.

Me? Day to day I drive a van (new & leased through the business and a pool vehicle so I pay no tax on it all), it's practical, and I drive less than 10,000 miles a year so I really don't need a company vehicle, especially as the personal taxation on them is now punitive...but I do have a thing for a older or unusual cars. But hey, everybody has to have a hobby.....

hobo28

brazilianwax wrote:

We do know another couple, however, whose debts are incredible. They have 4 children and are still paying for cars they bought on finance several years after buying them. They own a successful company and take enormous salaries but spend far far beyond their means. Current estimate is 8-10 years to pay it all off (although I'm guessing that will increase as he's about to buy a £50k car on finance)

Their kids have no hope of ever knowing the value of money. I think it's really quite sad.

I know a couple a bit like that. They have combined income of £100k+ yet have no savings and huge mortgage. Every few years they remortgage and add to it for holidays, cars, gadgets, whatever. Their attitude is to enjoy it now and when her mother dies, the inheritance will pay it all off! :shock:

Their kids don't know the value of money at all. He'll happily trash his ipod and expect another. They'll spend £200 on DS's birthday then another £100 on DD to make sure she's not disappointed. Then little swine will break his present so they'll take him back and get him more. Then they wonder why their kids misbehave!?!?!

debt23

"Of the small british folks that are indeed present in these big firms they are usually British Asian and not British white."

Hi,

Sorry, but what a load of rubbish that comment is!

Try getting to the top in this country if you are not white. Contrary to what you might think, its not easy.

Even given the low population percentage that non white races occupy in the UK, they are still poorly represented in industry 'boardrooms'.

Of course, if your thinking about the cleaners and catering staff in these so called large firms, then perhaps you may have a point.

All the best

debt23

danjberry

why does a race card always need to be pulled when it is not at all needed?

debt23

I agree.

I would have been happier if the OP had not found it neccessary to distinguish between British Asian and Brtish White.

All the best

debt23

roswell

Ok lets stop all this race stuff before it starts, The above I assume was an observation, i dont believe OP was using this as an refferance of differance across the cultures (ie not racist) So lets not make it what its not.