49 replies to this topic

[blacktulip]

I fall into the category of comfortable. I have never been out of work since starting a week before my 16th birthday. But I never learned a trade which I regret massively and had a steady dead end job for 7 years at first. Then I got out and have been working for plumbing merchants since and now earn a comfortable wage. I own my own home with the girlfriend and we have a son. I do wish I had more money each month to do things to the mini project. I often think about where people get all their money and what am I doing wrong after never being out of a job. When i see young people in very expensive cars and buying massive houses in expensive areas I just think this over and over. It could be down to mummy and daddy. I suppose it's more to do with the fact I could have learnt a trade and could be on £200 or more a day. I can gladly say what I have I have earned.

Edited by blacktulip, 07 July 2019 - 10:37 PM.

[r3k1355]

There is much talk about property prices, but 50 years ago you needed 25% deposit to get a mortgage and interest rates were in the region of 8%. We just did without things like foreign holidays, or any holidays really, and saved up, I was rallying back then, but it didn't cost me much and I did sometimes actually get paid for co-driving. I also fixed peoples cars in my spare time as well as working as an aerospace design engineer as a 'proper' job (on the Concorde I am proud to say).

 

So if we 'oldies' seem 'wealthy'. it is just that we structured our lives and didn't get into debt. We invested bit by bit and the rest is as it is. Now many of us OAP's have a comfortable life without too many money worries, but I think we have earned it.

 

Very much a different wold back then though, for example a foreign holiday was a proper luxury, while today it's just as cheap (if not cheaper) than a holiday in the UK.  So the two are a very poor comparison.

 

Likewise pretty much any technology was both expensive and rare, my uncle's built the first colour TV they had due to the cost of buying one from a shop.

Now you can't even give stuff away thats more than a few years old.

 

Access to money and credit is another example, interest rates were all over the place decades ago, driven by political instability, poor governance and like you said, Union's going around sticking their oar in where it didn't belong.

Now things are relatively more stable and the financial market has really progressed, opening up many more options for people.

 

Now if you don't have debt/credit you're in a worse position than someone who does.

[kit352]

I fall into the category of comfortable. I have never been out of work since starting a week before my 16th birthday. But I never learned a trade which I regret massively and had a steady dead end job for 7 years at first. Then I got out and have been working for plumbing merchants since and now earn a comfortable wage. I own my own home with the girlfriend and we have a son. I do wish I had more money each month to do things to the mini project. I often think about where people get all their money and what am I doing wrong after never being out of a job. When i see young people in very expensive cars and buying massive houses in expensive areas I just think this over and over. It could be down to mummy and daddy. I suppose it's more to do with the fact I could have learnt a trade and could be on £200 or more a day. I can gladly say what I have I have earned.

I have come to find out that a majority of the people I see with the fancy cars and houses are mostly buying with credit. Very few actually own what they are showing off and by owning I mean not having a loan out on it. Some of the richest people I have ever known dont show it. Drive older cars and are happy with a modest house sort of thing.
My brother is one of the wealthiest people in Hong Kong and you would never know it. Doesnt even own a car. It's only when you see his castle in the sky that you understand the depths of his wealth but other than that he seems ordinary unless you start watching his clothes. He has a weird phobia about used clothing now so he will only wear things once or twice before giving them away. You would think his wardrobe is epic but in reality it's just a new set of clothes every few days. It takes up about a normal single drawer .

If you guys have any interest in wealth building or just learning about money I suggest watching Dave Ramsey. It's all based in America but his principles and teachings can be adapted to the UK. He has tons of videos on YouTube.

[Curley]

When i see young people in very expensive cars and buying massive houses in expensive areas I just think this over and over. It could be down to mummy and daddy. I suppose it's more to do with the fact I could have learnt a trade and could be on £200 or more a day. I can gladly say what I have I have earned.

 

Go easy on yourself. Secret is they don't. The cars are leased, the houses on interest only mortgage and the designer good on the credit card. Very few are fortunate to have the bank of mum and dad. Most people are 6 weeks from going broke, they have less than 2 months money in savings.

 

Western economies are moving away from large CapEx cost models in which one actually saved/budgeted money to buy things. Instead market forces are moving towards an OpEx model with services like Spotify, 365 and Netflix all moving towards monthly billing. It's increasing less about your ability to buy a thing and more about your ability to service the debt.

Edited by Curley, 08 July 2019 - 12:41 PM.

[rich_959]

For me It's a mixture of hard work and good fortune. I'm 39 (not sure if that makes me young or old on this forum!) and consider myself in a reasonably good position. While I don't mind spending money on the right things, I tend to be cautious with my forward planning. I think this is partly due to values instilled by my parents, and also the fact that I've been a self employed consultant for the past 12 years or so. Business is good, but I always live by the mantra that it could always come to an end, and I'd have to go get a 'normal' job. So we pushed ourselves to get the house paid off early, and have saved hard/put money away in pensions.

 

We don't do finance anymore, but we're fortunate that we don't have to and that in turn gives very small monthly outgoings. I rebel against all monthly payments!! It's nice to be in a position where I could have a couple of years off between contracts if I really wanted to, partly down to the small outgoings and partly down to savings. But our kids are still young, so we have lots of expense ahead of us, which also keeps me on my toes with forward planning. 

 

What I will say, is that I've had many people comment about our house, holidays, nice cars etc and make comments along the lines of "it's all on tick". Never assume! As some have mentioned above, different people hide or flaunt their relative wealth (or lack of it) in different measures.

 

I do wish someone had sat me down in my late teens or twenties and explained compound interest properly. With relatively little outlay, we could all be fairly wealthy in later years if we made the sacrifice and put more aside when we were young. I can see my daughters faces glazing over now as I try to explain this to them in 10/15 years time.....

[hhhh]

Unfortunately, working against compound interest is compound debasement of the currency. Gold is the preferred defence mechanism when it gets out of hand.

[JXC Mini GT]

I believe that if you are a risk taker that you may end up wealthier than someone like myself who is risk averse. My aim when I left school was to get a trade, get my own property and retire as soon as I could afford. 

 

I also believe that a good hard  worker will always do well in whatever profession they choose, my initial 5 year apprenticeship in the motor trade ended badly when the company folded, so at 21 while my friends were going out most nights I went to night classes 3 nights a week for 6 years whilst working as a trainee electrician to get my Electrical technicians certificate then moving into project management of major electrical installations and construction projects.

 

I consider myself rich and lucky as I have always been employed. I retired at the age of 60 and I have got to say its the best time of my life, I enjoy my Mini, my grandchildren, holidays and helping family, friends and neighbours with all aspects of building/electrical works.

Edited by JXC Mini GT, 08 July 2019 - 01:42 PM.

[rich_959]

There's a whole world of things potentially working against you. But saving/investing early can hardly be cast aside because of potential currency debasement.

[hhhh]

There's a whole world of things potentially working against you. But saving/investing early can hardly be cast aside because of potential currency debasement.

My point is that saving in currency is often a Sisyphean task. Investing is another matter since securities and gold will generally increase in nominal value with inflation.

[rich_959]

 

There's a whole world of things potentially working against you. But saving/investing early can hardly be cast aside because of potential currency debasement.

My point is that saving in currency is often a Sisyphean task. Investing is another matter since securities and gold will generally increase in nominal value with inflation.

 

 

Gotcha, I see what you're saying and agree (spread of UK/Overseas funds is important). I just wish someone had explained the importance of doing this earlier, rather than waiting until my mid-30's to do it. 

 

Also, you win the contest for word-of-the-day with 'Sisyphean'!! Have to admit needing to google that one.... 

[mab01uk]

As Curley says it's increasing less about your ability to buy a thing and more about your ability to service the debt.......I notice many young people no longer have any desire to ever own their cars outright, they prefer to have a new one on monthly finance or lease and then hand it back to the dealer for an 'upgrade' to a new model every 3 years or so and carry on paying an ongoing monthly amount. The car companies now heavily promote this after seeing how well it worked in the mobile phone marketplace. The 3-year old cars coming back to main dealers also supply the 'Used Approved' market for those 'old school' customers that still want to actually buy and own a car outright.

[Broomer]

What is the benefit of buying a car outright over financing one ?
I'm unsure how buying it old school makes you a better person, your either losing several hundred pounds a month in depreciation or in finance payments. Talking of new cars, not cars already worthless.

[Broomer]

The above opinion is based purely on my last car bought outright now worth 25% of its original price.

[rich_959]

You have to run the calcs, for sure. But mostly it's down to individual preference and state of mind. I wouldn't say either option makes anyone a better person. But for me, I prefer to save for and own my cars in order to reduce monthly payment commitments. Same with insurance - road tax etc. I also just dislike paying interest on financed purchase (I am a Yorkshireman after all).

 

It does mean I tend to buy cars that are a year or two old, when someone else has taken the initial hit of depreciation. It's still an asset that decreases in value, but I have spare cash each month to save/invest or spend on experiences rather than general day-to-day costs such as car ownership.

 

Doesn't mean I wouldn't lease a car in the future at some point - it is appealing in certain scenarios, if your mileage is low, your income is secure, and you're staying in a UK based job for the duration of the lease. 

[kit352]

The main difference to owning vs leasing is that you have an asset in the end. There is a lot of math but in a nut shell at the end of your lease you hand the car back and if your lucky you owe them nothing and you walk away. All that money you had been giving them is gone and you have nothing to show for it. If you buy that car at the end of the loan you have the car that you can now drive for free basically, sell, or use as leverage for something else. Of course you lost a lot in depreciation but some cars aren't as bad as others.
If you need a new car every 3 years and cant deal with anything slightly used then lease is the way to go. If you can hold onto a car for say 5-10 years then buy it.