SOD IT!!! I'm giving up and having a damn good holiday instead!!!

Graham_Devon

Doozergirl wrote: »

This is me! It makes perfect sense to me. I will 'suffer' in rented accommodation if our money is working as hard as it can and allow us to buy outright sooner than working for someone else will. HPI won't help me buy a decent sized home for my family, so we have to beat it.

The fact that our money is put into other houses might seem a little odd though.

Obviously not to Graham_Devon though, because I still own a house. Does that make my business more secure

only in the sense that if someone did go wrong, you have assets which can be sold etc, which means you have a fall back. Not one you want to use admitidly, but still something there you can possibly use until the business get's back on it's feet or another client comes through the door.

With not owning any equipment or assets, your stuffed in every way if clients pull out, as you have nothing to fall back on.

I'm not saying either is right or wrong.

Alan_M_2

Graham_Devon wrote: »

So then your business and personal life is solely responsible on repeat business, or new business.

You have absolutely no assets. So if the crunch did come and you folded business, you would have diddly squat.

Might be working for you right now, but if you lost a contract, you would be scuppered (generally speaking, I don't know your business or your finances, I know business can't run without clients tho as I run my own).

That's obviously up to you and your business risk and plan, which is working, so it's fine. But the person you pay rent to, has the rent coming in, and that 300k equity. Theres no comparison.

If I were in a service industry you'd probably be right, but I'm not and I hold a very large amount of stock that's paid for (which is where my money is invested). The stock is the main asset in my business. That stock sat in my warehouse, plus the stock in transit to any customer at any one time far far outweighs the value of the house which I choose to rent.

You've made a lot of assumptions which simply aren't correct.

I also have enough advanced orders to run my business for the foreseeable future (that's years not months).

However it is a business, which in itself has inherent risks, but with the risks comes higher rewards which is why I can comfortably outstrip any HPI in monetary return. The down side is I risk complete wipeout. Alan Sugar didn't get where He is today by sitting by waiting for assets to grow, but then He's been Bankrupt twice, got it right third time. No risk no reward.

Alan_M_2

Graham_Devon wrote: »

only in the sense that if someone did go wrong, you have assets which can be sold etc, which means you have a fall back. Not one you want to use admitidly, but still something there you can possibly use until the business get's back on it's feet or another client comes through the door.

With not owning any equipment or assets, your stuffed in every way if clients pull out, as you have nothing to fall back on.

I'm not saying either is right or wrong.

If you had a modicum of business sense you would understand that you don't buy any plant or machinery that depreciates in value if you are a high stock holding business, it's much more financially viable to lease it as much due to the tax concessions as well as having no capital tied up in the depreciating items.

I want my capital in stock which is being sold and generating more capital.

There is an exception to this, when a business reaches a size that it has surplus cash in account and is looking to reduce it's tax liability (that's corporation tax) it may choose to buy outright it's plant and machinery in an effort to this end.

Alan_M_2

Dithering_Dad wrote: »

Wow! I've seen some sweeping generalisations in my time, but this has to be the biggest!! From one post, you deduced that the poster is living from one contract to the next and would be wiped out if he hit a barren spell! No thought to any stocks, shares, savings or other investments he may have. You also deduce (probably to fit your argument better) that the house he is renting is fully paid off and so the landlord has 300k equity. Perhaps his landlord is a BTL investor is barely covering the mortgage with the rental?

Not that it makes the slightest bit of difference to my circumstances, but my landlady is actually working three jobs to subsidise the mortgage as the rent I pay doesn't cover it.

Alan_M_2

Doozergirl wrote: »

This is me! It makes perfect sense to me. I will 'suffer' in rented accommodation if our money is working as hard as it can and allow us to buy outright sooner than working for someone else will. HPI won't help me buy a decent sized home for my family, so we have to beat it.

The fact that our money is put into other houses might seem a little odd though.

Obviously not to Graham_Devon though, because I still own a house. Does that make my business more secure

It means to a lot of people that you have an asset unconnected to your business, which I'd hazard a guess is not the case in nearly 80% of self employed people (including Ltd companies) as the bank will require a debenture to cover any business lending.

There's a perception that you're better off owning, which in a lot of circumstances is very true, I'm clearly pointing out that there are situations similar to mine that it's very sensible not to buy, at least not right now.

I also don't own the building in which I run my business, it was for sale if I wanted to buy for £800,000 + vat + refurbishment costs, or I could rent it (refurbished) for £25,000 a year. You don't need a degree in Accountancy to see I'd be crazy to buy, especially as commercial mortgages require 20% deposits and aren't exactly offered at great interest rates. All that money is far better off in the business generating more money.

Graham_Devon

Alan, did I ever say it was wrong or wrong? Did I say it was bad?

I simply put the two points across.

No need to start with the insulting lines and get so defensive about it.

Alan_M_2

No offence intended, I felt my post needed explaining in much greater detail due to the obvious misunderstanding of my circumstances.

sipar

Go for it i hope you have the best holiday money can buy. Do all the things you ever wanted to do in life spend spend spend. But 30 grand won't last for ever and the holiday will end quicker than it started and then what
no more holiday
no more money
no savings
no investment
back to square
think about what you say and do before you disrespect others on their plans for:rolleyes: :rolleyes: a better life in the future

empfun

Just get a property in Second Life and all is well. :-)

sipar

Go for it i hope you have the best holiday money can buy. Do all the things you ever wanted to do in life spend spend spend. But 30 grand won't last for ever and the holiday will end quicker than it started and then what
no more holiday
no more money
no savings
no investment
back to square 1
think about what you say and do before you disrespect others on their plans for a better life in the future