Preparedness for when

Karmacat

Wonderful, thoughtful discussion, thank you all so much. I'm at a bit of a crossroads at the moment, previous bad decisions coming back to haunt me (the French apartment, not overpaying enough, bad health and business collapse!). But I do have *some* cash, and *some* income, so I also have options.

GreyQueen wrote: »

There's an awful lot of paper wealth sloshing around, trying to glom onto tangible assets to secure a revenue stream, and all the signs are that the tangibles aren't there in the quantity needed to absorb the paper-wealth tsunami.

I've been wondering about this, thanks for putting it into words, GQ.

daz378 wrote: »

on a lighter note....starting right now on bbc3 .... i survived the zombie apocalypse

:rotfl:thank you :T I'm downloading it as we speak, even before Top Gear

[Deleted User]

Morning MAR I've talked this through with DD1 the historian and her take is that the only set of circumstances that she can envisage the state pension being dropped entirely are if the country is truly and completely bankrupted. She thinks more likely that the pension will still be paid but frozen and will not keep pace with the rising prices or cost of living index. Smaller increases and the pension being worth less are her thoughts. I'm certain though that if we all tried to see just how little we could actually live well on before anything of the kind happens, we'd all be in a much better place if it did!

Wasn't it Mr Micawber who said income £1 and outgoings of £1.01d is despair and income £1 and outgoings £0.19.11d is happiness? there's an awful lot of truth in that as a sentiment!

mardatha

Yea that's pretty much what I thought too..

Frugalsod

VJsmum wrote: »

Thanks, Frugalsod, that's why we aren't sure where to go from here?

We don't intend to sell those houses and there should always be students, right? having said that, these houses are usually let by now for next year and at the moment both are still available.

I also have two children and so, push comes to shove, at least they will have somewhere to live (albeit amongst a load of students ). Said houses are also just off a major road into a major city near a large hospital (can you tell where it is yet??;)) and so there should always be a market of sorts and therefore an income of sorts.

Havig said that, we have decided not to invest in further properties there, though may put some money into making those ones more lettable. The decision is where else to invest our pension monies - we currently get a return of around 8% on those houses, not much pays out at those rates.

Yes while property is significantly overvalued it is less overvalued than stock market investments. So I expect property to fall 50 to 60% but the stock market could be even more savagely down. Cash would hold its value but banks are likely to collapse when property crashes to real values taking your money with it. The problem is that the smart money is in stocks and hope to get out before the crash, but once that starts they start a stampede for the exit and the whole liquidity dries up and prices will free fall.

So where to invest is the big problem everywhere. The problem is that you need to think differently from others because while others will support your price the problem happens when they try to exit. The real issue is not returns but wealth preservation.

Personally I am not really rich enough to be in a position to worry about that. If I were young and starting out I would be holding onto cash to take advantage of deals when values of homes property and stocks collapse. The problem is that banks are not safe so you need to have spread your cash out widely.

So I have bought a safe and will keep some cash in it but the bulk of my cashflow will be to clear debts and then invest in things that will help me cope with an inevitable downturn. I am looking at a dehydrator so I can store foods for a long time without the need for a freezer. Things that can lower my cost of living and have a high payback rate like insulation etc.

Frugalsod

moneyistooshorttomention wrote: »

So, I cant see that "ordinary people" owning houses is something that has been going on very long, but I would think high property prices will still prevail at least until the generation down from mine struggle to buy homes and then things might change. But whilst its still the norm for people to own their own homes then I think there is so much invested (both financially and emotionally) in keeping the status quo that I think any "sea change" is a few decades in the future.

It is already happening. A first time buyer needs a salary of more than £100 000 to get a step on the ladder in London. The young graduate probably already has a sizeable mortgage already called student loan to pay off before they can really enter the property market safely.

In the US the percentage of home owners is already back to levels not seen in nearly 20 years and is still declining. When in some cities the level of rent repayments approaches 50% of wages there is little left over to save after pensions and student loans to put into a mortgage. What this does mean is that first time buyers will be as rare as hens teeth and you will struggle to find someone to sell to realise that "wealth" in your home even if you downsize. You will also be competing with first time buyers for those smaller homes.

mardatha

Thank god I got a council house in the 60s when they were freely available for those who needed them. I have had far more security in the last 40+ years than any home buyer, and long spells out of work didn't mean the S hitting the F for us. I really feel bad for young people, life has got a hell of a lot harder for them.

Frugalsod

mardatha wrote: »

Thank god I got a council house in the 60s when they were freely available for those who needed them. I have had far more security in the last 40+ years than any home buyer, and long spells out of work didn't mean the S hitting the F for us. I really feel bad for young people, life has got a hell of a lot harder for them.

Exactly though as a nation we need to be building millions of affordable homes and not these mansions that few can afford to buy anyway.

GreyQueen

Evening all. just stopping in for a contribution before heading into the kitchen to do something creative with mince - bygorry, do I know how to live or what?

What I encounter in my work is that a lot of small single-family homes are being bought to turn into student lets, or larger homes into houses of multiple occupancy (HMOs). We are a university city, and there are other educational establishments, so there's the need for a lot of student accomodation. But the uni is also purpose-building some, over and above the traditional halls of residence.

I do wonder how long the higher ed sector can continue to expand, what with graduates often struggling to find any employment at all, never mind anything worth their investment in their education. I know people with economics degrees doing p/t shop assistant work several years after graduation and they've struggled to get even that.

It seems to me that rising student costs, and reducing student employment outcomes, will probably cause a contraction in the numbers of students and/ or more choosing to study at places where they can continue to live with their parents, out of financial necessity. How this will pan out for the student-let investor, or when it will take effect, is something I can't call, but I get the feeling that we might be close to peak student.

Moving into rental property is part and parcel of the financial uncertainty in the economy, as people can see that it is the only way to go. The trouble is, when very many people do something, the returns for everyone can slip. There are no easy answers to this one.

If I had investment money (full disclosure - I don't) I would try to think about other things in addition to the buy-to-let housing sector. Such as small retail units, a garage block, light industrial. With the idea that you spread your exposure to potential downturns. A rental garage in the right place can punch well above its weight in terms of return over investment. I might also (with my speculator head on) look at a bit of landbanking, such as an undeveloped plot in an urban enviroment, or a field. If nothing else, a fenced field can be rented for grazing...........

For me, the onus is on living well below my modest means, having savings, taking my pleasures simply and cheaply and not allowing myself to worry too much.

My Plan Z (for when all else fails) is to find out where the rich people live and which ones of them have done Bad Things to the working poor - and rob them. I'm sure there's a cell somewhere waiting to accomodate me when I get caught.;)

Frugalsod

GreyQueen wrote: »

For me, the onus is on living well below my modest means, having savings, taking my pleasures simply and cheaply and not allowing myself to worry too much.

My Plan Z (for when all else fails) is to find out where the rich people live and which ones of them have done Bad Things to the working poor - and rob them. I'm sure there's a cell somewhere waiting to accomodate me when I get caught.;)

Considering how many people are already struggling and have not even started their prepping, that would indicate that there would be millions more opting for plan z long before you and I. Though come the day I will get a pitchfork though should I get a two tine version of four tine version? #plebdilemmas

http://www.amazon.co.uk/Spear-Jackson-54-inch-Agricultural-Fork/dp/B00440YCE2/

http://www.amazon.co.uk/Silverline-GT20-Muck-Handle-1300mm/dp/B000LFVUT4/

Personally a mob with these will definitely get attention.

GreyQueen

You'll be glad you got your pitchfork ahead of the rush, come the revolution. And bought one whilst you can still afford it. I favour the trad two-pronged model, myself, although I haven't invested yet. I do have various pieces of rural hardware attached to wooden handles, including a hedging hook which is just begging to be attached to a much longer handle and effectively become a pole-arm.

We're having fun and games in the Towers tonight with the neighbours; what's going on just outside right now could mostly be covered by the term running amok. I'm debating whether it's enough amok to call the polis, or just drug-fuelled high spirits. Decisions, decisions.