Fed Hike

michaels

Buying an iPhone rather than a generic android with the same functionality every 2 years probably costs 250pa more - that would pay for 10k of borrowing on my IO mortgage. £60 per month on Sky TV (rather than freeview for nothing) would pay for 30k of IO mortgage; 200 on eating out a month (rather than 20 cooking from scratch) pays for 90k of morgage etc

I know these days it doesn't really matter how frugally you live the mortgage rules will still not let you borrow but nonetheless it is easy enough to make a few lifestyle decisions that can quickly have a huge impact on abilty to borrow....

...now what was this thread about?

Has 'hike' always been used for an interest rate rise however tiny? always seems to me that the word itself makes it sound a much bigger deal than it is.

kabayiri

Incredibly, there are still people around who remember when the term "rates" meant money for street lighting and emptying "the bin"**.

** Yes, young people. I use the singular term for bin. Incredibly we made do with just the one bin. We didn't need one bin for paper recycling; one for bottles; one for all the wasted veg you try to hide under a few grass cuttings; one for last years iPhone; one for the games console out of favour *this year*; etc

cells

average rates of real return will fall towards zero with time else even a 1% real return given enough time would turn $1 into a figure higher than the GDP of the world

worldtraveller

Apparently the markets are calling a 30% chance of a rate rise according to the Fed funds futures market. That was a call earlier today, but, just in, jobless benefit claims are down, which can go into the "mix"..

However, I frankly don't see it happening today, but whatever does happen, there's the Greek elections this weekend to cause more potential market turmoil.

Decision is due at 2 PM ET (7 PM here).

Onwards & upwards....Well, you know what I mean!

mystic_trev

worldtraveller wrote: »

Apparently the markets are calling a 30% chance of a rate rise according to the Fed funds futures market. That was a call earlier today, but, just in, jobless benefit claims are down, which can go into the "mix"..

However, I frankly don't see it happening today, but whatever does happen, there's the Greek elections this weekend to cause more potential market turmoil.

Decision is due at 2 PM ET (7 PM here).

Onwards & upwards....Well, you know what I mean!

I agree, and don't think they'll be a rate increase this month. However, I do think they'll be one by the end of the year, unless the Economy changes dramatically.

wotsthat

michaels wrote: »

Buying an iPhone rather than a generic android with the same functionality every 2 years probably costs 250pa more - that would pay for 10k of borrowing on my IO mortgage. £60 per month on Sky TV (rather than freeview for nothing) would pay for 30k of IO mortgage; 200 on eating out a month (rather than 20 cooking from scratch) pays for 90k of morgage etc

Marketeers don't want you to think that way because you're turning a small number into a big number.

I do a similar thing but convert it into pension contributions. I've just cancelled Sky.

- it's only £40/ month (nothing)
- it's only £480/ year (getting bigger)
- it's £480 into the pension/ £96 tax rebate on top/ £96 tax rebate in hand/ £23 dividends each year

I suppose I could just keep paying it and having to earn £480 plus income tax on top every year instead?

Yes Iphones are a metaphor for waste but if anyone is truly serious about saving for a house in the current environment they don't have iPhones or Sky.

Thrugelmir

wotsthat wrote: »

- it's only £40/ month (nothing)
- it's only £480/ year (getting bigger)
- it's £480 into the pension/ £96 tax rebate on top/ £96 tax rebate in hand/ £23 dividends each year

Yet there'll be a whole generation soon complaining their pensions aren't big enough for them to retire early. From acorns grow oak trees as my late grandmother used to lecture me.

wotsthat

cells wrote: »

average rates of real return will fall towards zero with time else even a 1% real return given enough time would turn $1 into a figure higher than the GDP of the world

There isn't enough time. It would take 1000 years to get to $20,000.

It's an interesting theory but maybe rates trending towards zero for the last couple of decades is just randomness rather than an indication we're reaching the high water mark of humankind.

lisyloo

Yet there'll be a whole generation soon complaining their pensions aren't big enough for them to retire early. From acorns grow oak trees as my late grandmother used to lecture me.

I take a balanced viewpoint on this.
You can save all your money but once you get to your 40's some of your colleagues will die.
I'm spending a lot next year on an expensive diving holiday, but I don't expect to be scuba diving in 20 years time.

There has to be some balance which needs to be sensible for your financial situation.
But about 20% of us will never get to retirement (of course that means 80% of us will).

No pockets in a shroud and no point being the richest man/woman in the graveyard.
I don't advocate neglecting pensions, but I also don't advocate neglecting the here and now. Of course it's going to vary what's appropriate in each situation.

cells

wotsthat wrote: »

There isn't enough time. It would take 1000 years to get to $20,000.

It's an interesting theory but maybe rates trending towards zero for the last couple of decades is just randomness rather than an indication we're reaching the high water mark of humankind.

well i would hope the world and humanity will be around in a few million years.

it takes 2777 years to turn $1 into $1 trillion at a rate of 1% a year

2777 years is a long time but its not that long a timeframe, some trees are nearly twice as old.