Is it possible to become a millionaire (or near to) through investments?

Glen_Clark

bowlhead99 wrote: »

Well, if someone will pay you more for what you have than they previously would, that sounds like you are in a better position than others and that your relative wealth together with absolute wealth has increased. If you wanted to 'cash in', you could move to a smaller overpriced property, and bank the increased differential which has been created as part of the rise. Or move to a different part of the country. Or to a different country where politicians behave more in line with your own philosophy on how to run a country?

Or, you could say that your wealth generation is fake because you don't want to cash in your house and shares and other assets and continue to sit there moaning to the internet that billionaires are allowed to exist and that GDP and CPI is fiddled in your opinion and the queen doesn't pay council tax.

I don't wan't to live anywhere else, after living all over Europe I find Britain the most beautiful of all. And Her Unelected Majesty does pay Council Tax on Buckingham Palace, but she pays less than a 3 bed semi in a deprived area. (Officially thats because Westminster Council is supposed to be efficient. In reality its because benefit claimants can't afford to live there, and they in a position to derive most of their income from fleecing visitors with motoring fees and fines.)

Glen_Clark

Malthusian wrote: »

Unless this is the only house in the entire world that you can possibly live in, you are better off.



Utterly bonkers. "My investment bond has risen by £10,000 but I'm actually worse off because it charges a 1% exit fee and the exit fee's gone up by £100."



No, by your own logic he's the most miserable person in the entire country. Imagine the estate agents' fees and stamp duty he'd have to pay to sell £75bn worth of property!

The obvious difference you ignore is that the Duke of Westminster can sell or rent out properties because he has more than the one he needs to live in. If I sold my house I would have to buy another, and lose more in Estate Agents fees for the price of both being inflated by Osborne.

BananaRepublic

Malthusian wrote: »

Utterly bonkers.

Clearly you are a sound judge of character.:)

jamesd

Glen_Clark wrote: »

My house price has risen, so techincally my household wealth has risen, but I am no better off because I can't sell it as I need it to live in.

As the story explains: "the average British household is now worth an estimated £326,414, up by £48,730 ... A nine per cent rise in average property values contributed an estimated £452 billion meaning 39 per cent of total household wealth is now held in bricks and mortar... the biggest driver was an increase in the total value of financial assets such as bank deposits, government bonds, shares in companies, which contributed £996 billion."

Even if a person didn't want to downsize or move to a cheaper area with a longer commute, or retire to a cheaper area with no commute, to release value, there's still the matter of those other assets.

Glen_Clark wrote: »

People who have benefitted most are the likes of the Duke of Westminster, whose inherited wealth is reportedly now over £75bn after his inherited London property portfolio has apparently doubled in Capital value, plus astronomical rents, in 10 years. How does that affect your average figures?

Probably not at all because it's probably all held in a trust or company, not his own personal name and not his personal property.

BananaRepublic

grey_gym_sock wrote: »

osborne has been a failure for 6 years. most of the UK population is poorer, which is almost the definition of failure for the chancellor.

The million or so who were unemployed when he came to power and who are now employed would strongly disagree with you. And don't give me that guff about "Oooh, it's all fiddled, they're not real jobs, they're fake jobs, imaginary, chocolate jobs ... , ". I know from first hand experience that the job market for real jobs when Osborne took up his job was appalling, and it is now booming.

grey_gym_sock wrote: »

but more recently, what effect does china's slowdown have on the UK economy (as distinct from on the UK stock market)? it lowers commodity prices, which hurt the UK's extractive industries, but helps all other sectors of the economy by lowering their costs. overall, it should be positive.

We make a lot of cars, especially premoium brands such as Land Rover. The affluent Chinese buy Land Rovers as a status symbol. We make other products too. A Chinese slow down has a real impact on us.

grey_gym_sock wrote: »

if we have weak demand in the UK - which we do - that's nothing to do with china: it's because households are over-burdened with high levels of debt, which have barely fell since the GFC. we are trapped in the early stages of debt deflation (japan hasn't escaped from debt deflation after over 20 years). some of those debts need to be written down. also, government spending could be used to increased to make up for lack of demand in the private sector (instead of the austerity policy, which is reducing public-sector demand at the same time that private-sector demand is weak).

the UK (and other) stock markets - apart from the extractive industries sectors: it's more obvious why they have fallen - may have been spooked by china (though one should always take explanations of why the markets have fallen/risen with a large pinch of salt). but market sentiment can change for apparently trivial reasons - the market is a bit of a manic-depressive. perhaps this is just a hiccup which the market will get over, or perhaps it's just starting to pay proper attention to some of the underlying negative factors (such as weak demand) which have been ignored in the bull market.

There is a very real issue with a bubble in China. Everyone was buying shares, the markets were soaring. It had to end. And the Chinese government have been trying to let it down gradually.

grey_gym_sock wrote: »

to get almost back on topic, i don't have a strong opinion on where the market is going from here. happy to keep most of my really long-term capital invested in shares, but with the emphasis on more defensive sectors, which should do OK even is the economy is so-so.

I also have no real view except that in a few years it will be higher.

Glen_Clark

BananaRepublic wrote: »

The million or so who were unemployed when he came to power and who are now employed would strongly disagree with you. And don't give me that guff about "Oooh, it's all fiddled, they're not real jobs, they're fake jobs, imaginary, chocolate jobs ... , ". I know from first hand experience that the job market for real jobs when Osborne took up his job was appalling, and it is now booming.

So why is so much housing benefit claimed by people doing your 'real' zero hours contract jobs?

bowlhead99

Glen_Clark wrote: »

So why is so much housing benefit claimed by people doing your 'real' zero hours contract jobs?

It stands to reason that if housing benefit is available for the lower paid, people with zero guaranteed hours who may not do so many productive hours for as much money as you or me or banana will be in a position to claim more of it than you or me or banana. That does not mean the stats are all rigged by the evil government frauds. Certainly the employment prospects in my line of work do generally get better with the economy and are stronger now than in some recent past.

Also, the fact that three people are working 16 hours per week and all getting (with a bit of government support) enough to live on, does not mean it was a better state of affairs when one person worked 48 per week and the others were entirely unemployed and needed loads of support. Or the reality in some cases that zero were employed and the 48 hours has been created by economic factors and a variety of initiatives that are nothing to do with rigging house prices, rents, GDP or CPI.

Still I suppose those with zero hours contracts could make use of their spare time by ranting on online forums for us. We could consider outsourcing that process to these low income types, wich would improve the economy by helping them afford the high market rents and inflated cost of goods and in turn get us back some more of our own leisure time and productive work time.

BananaRepublic

Glen_Clark wrote: »

So why is so much housing benefit claimed by people doing your 'real' zero hours contract jobs?

It'd help if you stopped using hyperbole and argued on the basis of evidence e.g. independent statistics to back up all of your claims. And no "Oooh, they're all fiddled, it's a conspiracy" nonsense.

grey_gym_sock

jamesd wrote: »

Compared to say Do you feel 20% richer than last year? Average UK household wealth soars by almost £50k in sharpest increase since records began? Which numbers are you using?

i mean the real value of people's income. for nearly everybody, that is the key to how rich or poor they are. asset values are much less important, though they have some effect (and i'll come back to that later).

see this ONS bulletin: http://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/2015-06-29

interpreting that bulletin is not exactly simple, but for a start, see figure 3, which shows median "equivilised disposable household income" falling up to 2012-13, and starting to recover in 2013-14. there is no more recent bulletin, but i'd expect some continued recovery, given there has been some growth in real wages since 2014. there may or may not have be enough further recovery to take "disposable household income" back above where it started.

but that measure leaves a few things out: it is total income (including cash benefits) minus "direct taxes" (which they define as income tax + employee NI + council tax). so it leaves out indirect taxes, such as VAT, which has risen. and it excludes the value households gain from free public services (e.g. NHS, education), which has fallen a bit in real terms. allowing for those factors, that suggests the median household is worse off.

to look at it another way: the ONS note that retired households' real incomes have been rising in recent years, but those of non-retired households have been falling. and the latter outnumber the former. they note falls in real income (though they are talking about since 2007-8 here, not since 2010) for 4 out of 5 quintiles of non-retired households, with only the lowest quintile gaining.

now, for some people, the huge rises in asset values (including housing, shares, and bonds) we've seen over the last few years will more than compensate for lower income. but that is mainly for the wealthiest few percent, who own most of the assets. for people who own little beyond their own home, it makes little immediate difference if it's now worth more.

and for people who hope to buy their own home, rising house prices make them worse off. house prices are not included in the inflation figures, so this is not already allowed for by looking at "real" incomes. and indeed, we've seen a significant fall in the percentage of the population who are owner-occupiers, so this is having an effect.

overall, rising asset prices are making a few wealthier people better off, and a lot of younger people who haven't bought a home yet worse off.

A chancellor also gets to be judged buy things like change in public sector borrowing trend, economic growth and unemployment rate. Reduced public sector spending would naturally reduce household income levels but many would think that it's a good choice to reduce the public sector borrowing. And of course the UK leads the OECD in economic growth.

well, he's failed on the public sector borrowing trend, too. said he'd wipe out the deficit in 5 years, and didn't even halve it. when you'd expect it to fall quickly, given the economy was already recovering from a recession when he started.

however, i'd say most of those things are either means to and end, or secondary effects of greater prosperity. actually making the population better off is the primary aim.

Would you be meaning total household debt or debt per household? Because of the increase in the number of households one has been going up while the other has been going down.

ratio of household debt to income.

it has fallen a bit since the GFC. but very slowly. my point is that, while household debt was growing exponentially pre-GFC, households spending more than their income provided some (unsustainable) economic stimulus; and now that process has gone into reverse. if it were a short period of pain, after which household debt fell to a much lower level, that might be a price worth paying. but it's falling so slowly that households attempting to repay debt, or just paying interest, are likely to be a drag on the economy for decades. (compare japan since 1990.) so we need to think about other approaches to this problem.

Glen_Clark

BananaRepublic wrote: »

It'd help if you stopped using hyperbole and argued on the basis of evidence e.g. independent statistics to back up all of your claims. And no "Oooh, they're all fiddled, it's a conspiracy" nonsense.

You can google it if you want to educate yourself, or if you think I am wrong.