Why are people in this country so stupid?

leftieM

Loads of people have car loans though - I would have thought these were the norm and people buying cars outright are unusual? Cars are so expensive and a lot of people are fussy about what they drive so they would rather put any savings in as a down payment and get credit rather than take the money and buy a cheaper car outright.

nogginthenog

bloomsberg78 wrote:

Exactly, doing some rough calcs, if whatever you want costs you £10k. If you saved £400 for 24 months you'd reach about 10k including interest. (at net 4% interest)

If you get a loan now and pay that off over 2 years, you'll pay about £440 per month. Thus giving the bank about £600 in interest and losing £400 in interest that you would have earned if you had saved. I reckon you'd be £1000 out of pocket.

Just seems barmy to me.

But you could just invest the money you borrowed,How much for peace of mind.
=A&L BORROW £7500 OVER 60 MONTHS TOTAL PAYABLE=£8645.40
FOR EVERY £1000 INVESTED @5% OVER 1 YEAR=£50 INTEREST. IF YOU INVESTED THE FULL £7500=£375 PER YEAR INTEREST... EVEN MORE, IF INTEREST IS COMPOUNDED
The loan is £144.24 per month x60months.

oops sorry for the caps got carried away.

sarah_elton

I think the OP has a fundamental misconception that everyone in the UK has a financial situation the same as those minority few who appear on DEBT!!!!!!!! episodes of Tonight With Trev.

Scooby_Man

Conrad wrote:

The OP should realise that debt is'nt all bad.

My aim is to retire by age 50 on a take - home income of at least £3000 per month, although take - home £5000 per month ideally, WITHOUT HAVING TO SELL MY HOME AND DOWNSIZE.

In order to meet this I aim to have assets (excluding main home) of between £1.2 - £2million.

For me that meant taking a few risks with mortgage money borrowed at just over 4%. So far so good.

Im not one for repaying the mortgage, Ill do that at retirment by selling one property.
I dont rely on UK B2L, Ive bought property here and there (Germany, Morocco, Caribbean etc). Currently trying to buy a high street retail premises in prime location - such units only come up once in a lifetime here so supply is non existant which means my yield will be at least 10%, or I could repay my resi mortgage, naaaaa boring.

This sounds interesting. I have a few friends who say what you say, but they're just dreamers.

Can I just asked how much you borrowed? Presumably you must have had a big income/lump sum to get the mortgages and cover any downtime (e.g. empty periods)...

prudryden

Absolutely nothing wrong with borrowing (leveraging) or using someone's else money, if you stay within your ability to pay down the loan, should things not go as you expect.