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barcaospre
Posts: 2 Newbie
Hi Guys, We have owned our house for a number of years and are now in the process of selling. My partner thinks its straight forward. We sell. We buy. As normal.
What I am proposing is we sell and invest the equity responsibly. I calculate that our investment returns should cover the rent we need to pay for a modest rental property.
My wife objects on the ground that we are 'throwing our money down the rental drain". I take the view it is money we would never have had if we simply purchased another house.
Of course there is a risk to investments but I feel we should be able to manage that. Am I failing to take account of something so obvious or might it be worthy of consideration?
Your views will be gratefully received.
What I am proposing is we sell and invest the equity responsibly. I calculate that our investment returns should cover the rent we need to pay for a modest rental property.
My wife objects on the ground that we are 'throwing our money down the rental drain". I take the view it is money we would never have had if we simply purchased another house.
Of course there is a risk to investments but I feel we should be able to manage that. Am I failing to take account of something so obvious or might it be worthy of consideration?
Your views will be gratefully received.
0
Comments
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barcaospre wrote: »Am I failing to take account of something so obvious or might it be worthy of consideration?
Yes.
This......
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Your wife's feelings, how long do you want to rent for, if the housing market crashes you still have a roof and a place to live, if you lose money on the stock exchange, well I am with your wife on this one, it's a daft plan IMHO.0
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“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Im with the wife on this for the reason above.
Id be fuming if i had paid off a mortgage pretty much and my partner suggested we rent.... everything i had worked for, for it sit in an investment which could result in me losing everything.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Inflation...
Taxation...
Investment risk...
Opportunity cost...I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Id be fuming if i had paid off a mortgage pretty much and my partner suggested we rent.... everything i had worked for, for it sit in an investment which could result in me losing everything.
Yep.
Gotta love those 'blue chip' stocks like Enron, Polly Peck, and Marconi....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
barcaospre wrote: »Hi Guys, We have owned our house for a number of years and are now in the process of selling. My partner thinks its straight forward. We sell. We buy. As normal.
What I am proposing is we sell and invest the equity responsibly. I calculate that our investment returns should cover the rent we need to pay for a modest rental property.
Why not buy a modest house instead?
Rents will rise with inflation, house prices will almost certainly rise by more than inflation (and already are), and if you're extracting the yield form stocks to cover rent then you have no chance of growing the portfolio in a meaningful enough way to beat inflation.
Over the last 100 years, property plus rental yield (realised or imputed) has beaten stocks plus dividends hands down.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Your house is also an investment which wont go to zero, other kind of investments carries more risk than an housing investment, get professional advise when investing your hard earned retirement money.0
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HAMISH_MCTAVISH wrote: »Over the last 100 years, property plus rental yield (realised or imputed) has beaten stocks plus dividends hands down.
The two do not have to be mutually exclusive.
http://www.independent.co.uk/money/spend-save/shares-or-property--whats-best-8722809.html
Most financial experts believe that when it comes to cash or shares, the answer is have a bit of both.
http://www.lovemoney.com/news/savings-investments-pensions/savings/10684/shares-vs-property-which-is-best-for-saversIn case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
I would want to own a roof over my head before I started investing spare money.0
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