Do people still leave their money to their children?

bigadaj

Thrugelmir wrote: »

Wealth doesn't just come from home ownership. Plenty of self made people who have simply worked hard over many years.

Yes, but the vast majority of wealth in most cases will come from home ownership.

Malthusian

bigadaj wrote: »

Yes, but the vast majority of wealth in most cases will come from home ownership.

And the house was bought with what?

Mojisola

Malthusian wrote: »

And the house was bought with what?

My parents bought their house for £7,500.

It sold for close to £200k.

They worked hard to pay off the mortgage but rest of the gain was just a windfall because house prices went crazy.

POPPYOSCAR

Mojisola wrote: »

My parents bought their house for £7,500.

It sold for close to £200k.

They worked hard to pay off the mortgage but rest of the gain was just a windfall because house prices went crazy.

If they had a mortgage they would have paid considerably more than £7500 over that time.

scd3scd4

BobQ wrote: »

Maybe because the stranger was even more handsome and just as young

Thats very possible but not going to happen. ;-]

ukdw

Out of interest for a £7,500 mortgage over 25 years - if say the average mortgage rate is about 7% - based on this graph http://www.bankrate.com/finance/mortgage-rates-history-0112.aspx and assuming an average debt of £3,750 - then appx total interest = 3750*.07*25 = £6,562. I suppose it would probably be slightly greater than this as the interest rates were higher when the outstanding sum was larger.
Using the google mortgage rate calculator it says monthly payments of £53, and a total payment of £15,903. - So a net growth in value of about £184k.

Or looking at it another way - using the HL regular savings calculator - if you saved £53 a month for 25 years, with 7% growth then your total saving would be £41,735

bigadaj

Malthusian wrote: »

And the house was bought with what?

Bought with cash and or a mortgage, but out turn value from excessive house price inflation I'd propose.

jamiehelsinki

I'd you left 100k to charity, how much would actually get spent where you intended it to be?

Very little I bet!

Mines going to my daughter.

phillw

ukdw wrote: »

if say the average mortgage rate is about 7% - based on this graph http://www.bankrate.com/finance/mortgage-rates-history-0112.aspx

A 7 grand house puts that a long way back, they could have hit %14 in that time. Back in the days of yearly interest calculated up front on the first day of the year, etc.

Rule of thumb back then was that you paid back double. Which isn't far off the value you calculated. I wouldn't mind paying double that interest, if I could get a £200k house for £7k. Although if everyone could get a house for £7k, then it wouldn't be good....

TheTracker

Jamiehelsinki wrote: »

I'd you left 100k to charity, how much would actually get spent where you intended it to be?

Very little I bet!

Mines going to my daughter.

Charity admin costs vary greatly. The Red Cross has long been near the top with about 5%. The worst of them more like 25-50%. It’s easy to search for the admin costs for charities that meet your interest. My rule of thumb is never to give to a charity that uses Chuggers.