UK Households wealthier than ever before

chucknorris

Carl31 wrote: »

Asset wealthy, but cash poor

Is it much better to be both asset and cash poor?

EDIT: The return is so poor on my cash right now that I want to invest a substantial part of it in property, I am waiting for a suitable property to become available.

Mr._Pricklepants

Graham_Devon wrote: »

Alright ISTL.
I don't believe I'm muddling. You still can't disagree with what i said, so let's leave it there eh. You call me a muddler, I'll state you are only doing that because you can't bear to agree with what was stated.

wotsthat

Graham_Devon wrote: »

Your point was to try and state this was "accessing your wealth" and therefore increased paper wealth is fundementally changing your life / lifestyle. Both yourself and Hamish will not disagree with what I state. Instead, you claim I'm muddling (again), but STILL can't bring yourself to disagree with it even when challenged to do so on two occasions.

The thread is about the increase in household wealth. You really don't like the thought of households becoming wealthier, for whatever reason, so want to talk about liquidity.

It's really very simple. Every penny of your wealth will be spent or transferred. If your wealth increases there's more money to be spent or transferred.

If the increase in wealth is due to increasing house prices then it's less liquid than cash but it will still be spent and, in terms of wealth, £1 in cash is worth the same as £1 in any other asset subject to different levels of liquidity and cost of access.

Talk about whether this increase in wealth is 'fundamentally changing people's lives' is where the muddling accusation comes in - what's that meant to mean? Not to worry though - your mission was a success - well done.

N1AK

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/personalfinance/houseprices/9979554/Housing-market-at-three-year-high-says-RICS-survey.html

:beer:

Can't really see anything to complain about here :T that's a decent rise in wealth even accounting for inflation.

N1AK

IveSeenTheLight wrote: »

Ask yourself, what interest are you obtaining in you bank?
What interest are you saving by overpaying?

If the interest saved is greater than the interest earned then you are far better overpaying the mortgage.

Previously I calculated that by incurring the ERP, within 4 months I had saved enough on the interest to recoup the ERP costs and then was saving more.

This is something more people should consider. It could save a lot of people a considerable amount of money if they manage their money properly. The opposite can also sometimes be worth considering. I wish I'd gone for a longer repayment term because with interest rates this low I am confident I can outperform my mortgage interest rate with other investments.

DaddyBear

Carl31 wrote: »

Asset wealthy, but cash poor

Absolutely. Most of the increase can be attributed to increased value of housing. An asset that forms a fundamental need and is both difficult (currently) and costly to sell. I would guess that disposable income has taken a nose dive over the same period.

wotsthat

DaddyBear wrote: »

Absolutely. Most of the increase can be attributed to increased value of housing. An asset that forms a fundamental need and is both difficult (currently) and costly to sell. I would guess that disposable income has taken a nose dive over the same period.

Real household disposable income was up 2.1% in 2012.

Up 3.8% since 2007.

http://www.ons.gov.uk/ons/rel/naa1-rd/united-kingdom-economic-accounts/q4-2012/index.html

IveSeenTheLight

Graham_Devon wrote: »

Alright ISTL.

I don't believe I'm muddling.

You never do, but are quite apt at it.
Try sticking closer to the topic. It may help.

Graham_Devon wrote: »

Alright ISTL.

You still can't disagree with what i said,

I did disagree, that's why I initially replied to your post.
You can't disagree with what I said.

Let's try to clear this up.

IveSeenTheLight wrote: »

Graham_Devon wrote: »

[You said]Only if the asset is debt free can ou access the wealth.

[I replied]
Lets suppose I overpay my mortgage by £500 per month for a couple of years.
Not only have I reduced my mortgage debt by £12,000, but I have also reduced the interest payable, hence further increased the repayment part of the mortgage.

Could I not then choose to access this equity at remortgage?
I am assuming you are agreeing therefore you CAN access the wealth without the asset being debt free.

So I demonstrated that you can access equity (wealth) without the asset being debt free

Graham_Devon wrote: »

Your deby junky nonsense is on page 1. Another poster has also quoted it and called it debt junky stuff. Hardly difficult to find and you surely don't need me to link back to page 1?

Yes, I read dry hat's post calling me a debt junky.
I never used that term.
I have since responded to his post

So to clarify, it was dryhat's debt junky nonsense, not mine

IveSeenTheLight

N1AK wrote: »

This is something more people should consider. It could save a lot of people a considerable amount of money if they manage their money properly. The opposite can also sometimes be worth considering. I wish I'd gone for a longer repayment term because with interest rates this low I am confident I can outperform my mortgage interest rate with other investments.

Indeed, as mortgage rates have lowered it has eased the opportunity to earn more elsewhere.
That said, you must consider the investment net return with the mortgage product rate.

chucknorris

DaddyBear wrote: »

Absolutely. Most of the increase can be attributed to increased value of housing. An asset that forms a fundamental need and is both difficult (currently) and costly to sell. I would guess that disposable income has taken a nose dive over the same period.

:rotfl:Thanks your post made me laugh, much better of course to have no wealth at all :rotfl: than asset wealth.