Only freedom will do

gallygirl

edinburgher wrote: »

Yay, we've got to him! :T :rotfl:

He'll probably go out and buy a watch today

NorthernMonkey1

edinburgher wrote: »

At a gut level, we can all agree with that. On the other hand, why not include it?

Because it skews your calculations in a way that makes them less useful.

Compare person 1 who has a 400k house, and no savings, and person 2, who has a 150k house and 250k savings.

Person 1 is in no position to retire, he has no cash, so has to continue to work. Person 2 is in a position to possibly reduce hours, reduce work or whatever he wants.

really what is important the money they have available that can be liquidised if needed. You're always going to need somewhere to live, so counting your house in these calculations makes them less useful.

PS. I'm a naturally argumentative git Please don't see this as an attack, but a difference of opinion. This thread has been incredibly helpful to me.

NorthernMonkey1

Karmacat wrote: »

One of the biggest chunks of my pension provision (which has a huge gap, and I'm, erm, twice your age :o:o is from quite a short lived pension I set up when the mortgage interest rate came down from 15% to 10% in one go.

In a similar vein, I had a pension which I paid into for about a year and a half when I was 21/22, when I was earning no where near as much cash, and lived at home. I'd half forgotten about it until as part of getting rid of my debt, I updated the address held, and got a statement through the post. It's worth £14000 now.

If only I'd had the sense to pay into one between 23 and 29 I'd be in a really comfortable place :rotfl:

Starting a pension as soon as you start work is the best financial decision you can make by a long stretch

SuperSecretSquirrel

AlexLK wrote:

I am planning to start investing (when I've read the books and have £10,000 to start)

Hi Alex Where has the 10k magic number come from? All you need is £50 per month to start drip feeding. Many would argue that small regular investments are safer than large lump sums, depends if you're a slow and steady investor or a speculator. I'm a fan of low cost tracker funds, no plans to do any speculative stock picking, slow and steady wins the race for me Even if this wouldn't be your style, you could maybe do a bit of both? Very good articles on the monevator blog for getting started, no need to become an expert before dipping a toe

SuperSecretSquirrel

NorthernMonkey1 wrote: »

I've been thinking a lot about what you've said.

I think of my house the other way to you. I think of it as a liability not an asset.

It's not something I can get rid of and sell, as I'd be living in a hedge, and if I can't sell it, but have to pay for it, then it becomes a liability.

To minimise this liability, I need to get rid of the debt associated with it (my mortgage) so I'm trying to pay it all off by 2025.

I think I'll be a lot less worried about stuff once this is done. Everything becomes a lot easier once you don't owe people money.

It has been about 10 years since I read rich dad poor dad, but I remember the author advocating thinking of "assets" in a similar way. Cars would be liabilities, not sure if he felt the same way about primary residences. He was heavy on advocating BTL so can't have considered all property to be liabilities.

Personally I think of our home as a highly illiquid asset, the mortgage is the liability. I want to keep hold of the house, but more than happy to lose the mortgage Of course major repairs could easily see the house considered a liability for a while!

Funny how I'm more inclined to think of the cars as liabilities, even though they don't have a penny of finance owed on them. I guess it's down to them being depreciating assets, or a steady drain on net worth, that constant negativity must be what skews my thinking.

edinburgher

Compare person 1 who has a 400k house, and no savings, and person 2, who has a 150k house and 250k savings.

I think your example is unbalanced. A much more likely end point would be someone with 150k savings and 250k house. In this case, reduced hours etc. could still be an option. We should be careful not to put all of our eggs in one basket, but that doesn't mean that we should disregard some of the eggs

I'm a fan of low cost tracker funds, no plans to do any speculative stock picking, slow and steady wins the race for me

Seconded

edinburgher

Dammit, had stupidly forgotten that paternity leave wasn't paid at my full wages, have fallen about £250 short this month. I am aware that this is a first world problem and that worse things happen at sea :rotfl:

• Registered birth of DD, her first stealth tax with a £10 charge to get the full extract (required for a passport or bank account!)
• Took back some clothes that won't fit her in season (we now have c. £60 of gift vouchers for her)
• A work colleague gave me £1.50 for her, duly added to spreadsheet
• £150 added to S&S ISA for her
• Child benefit forms completed, will post these tomorrow morning

slowlyfading

All sounds good apart from your wages, obviously :rotfl:

edinburgher

Getting there SF, plenty of smiles and gurgles more than make up for it! Don't believe it when you are told that babies don't smile for x weeks, she is a happy girl

slowlyfading

That's lovely to hear