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MSN - Money advice page
mpython
Posts: 3,677 Forumite
Anybody else think this is poor advice?
MSN Money Website
here's an example:
Gearing can be good when it boosts profits
Let’s start with the obvious. If you buy a house worth £200,000 with a £100,000 mortgage and house prices rise by 10%, you have not just made a 10% profit. You only put up £100,000 of your own money, and on that you have made a 20% profit.
I'm no financial wizard but even I can see he's ignored potential interest earned on savings & costs of servcing the mortgage.
Other examples:
The buyers of endowment mortgages got the whole concept wrong, because they were advised to pay too little into their savings plans.
and
In my old age, I expect my estate will be subject to inheritance tax. So avoiding it will become an issue. Having a loan on my home and using trusts to pass the same amount of cash onto my heirs will save me (or rather them) a bundle in tax.
MSN Money Website
here's an example:
Gearing can be good when it boosts profits
Let’s start with the obvious. If you buy a house worth £200,000 with a £100,000 mortgage and house prices rise by 10%, you have not just made a 10% profit. You only put up £100,000 of your own money, and on that you have made a 20% profit.
I'm no financial wizard but even I can see he's ignored potential interest earned on savings & costs of servcing the mortgage.
Other examples:
The buyers of endowment mortgages got the whole concept wrong, because they were advised to pay too little into their savings plans.
and
In my old age, I expect my estate will be subject to inheritance tax. So avoiding it will become an issue. Having a loan on my home and using trusts to pass the same amount of cash onto my heirs will save me (or rather them) a bundle in tax.
From MSE Martin - Some General Tips On Holiday Home Organisations and Sales Meetings
DO NOT TOUCH ANY OF THEM WITH A BARGEPOLE!
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Comments
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Jeez. Worrying. If only finances were that simple...0
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