Credit deflation and the reflation cycle to come (part 3)

[WICAO]

23 minutes ago, Yadda yadda yadda said:

The point is the wage spiral not whether you could attain your lifestyle on the wage.

I've never been a cocktail bar tender but I suspect buying a home has never been the norm. £35-40k plus tips and a meal five days per week is not bad for bar work. The fact that the wage is the biggest text on the advert demonstrates that it is the selling point. It is also a job that a 22 year old could do and is hardly working like an idiot as the job finishes at home time. No emails to check at home.

We're not going back to the working classes buying a home on one wage any time soon. Not in the UK. Supply is constrained and will remain so. In a crash interest rates will be higher, lending tougher and the monthly cost similar. Some people will take advantage, those with lots of cash.

I wasn't trying to compare it to my lifestyle but merely show that there must be better options elsewhere even when earning less money.  It's not always about the hourly rate.

Not an expert and it doesn't affect me so will do this quickly.

So after tax and NI our £35,100 turns into £2,271 per month.  Now let's say our bar tender has somehow managed to rustle up the £33,000 deposit for said shit flat so we're borrowing £297,000.  Let's say 30 years and let's go with the big mortgage boys, Nationwide, on a 2 year fix hoping we can do the same again in 2 years and so forth.  That's £1,227 per month.  So our bartender has £1,044 left after paying taxes and a mortgage.

Plan B is to get out of London and pay, what, £150,000 for a flat...  But instead of earning the big bucks we're now at the minimum wage of £9.50.  So £22,230 per annum.  After tax and NI we're at £1,555.  With our £33,000 deposit now we're borrowing £113,000 meaning our repayments are now £479.  So now our bartender has £1,076.

So our fantastic £15 per hour wage in Norwood is no better than minimum wage in a part of the country with more affordable housing.

London is a place for the rich or the benefits class IMHO.

[Democorruptcy]

10 minutes ago, HousePriceMania said:

 

 

WTF !!!

I hope it's a temporary lower CGT before it goes up annually to 60% then 80% then 100%!

[feed]

3 minutes ago, Democorruptcy said:

It depends how much they are prepare to thieve from others to pay for it.

With an election in '23 or '24.  You know the answer to that question.  

[WICAO]

9 minutes ago, Democorruptcy said:

Single income is a bit yesterday?

2 x £35,100 = £70,200 x BoE's no more than 15% of mortgages over 4.5x income = £315,900 which is where the price comes from not 9.4x single income.

Agreed, but what a life.  Living in Norwood in a shit flat with both working 45 hours per week until 11pm for the next 30 years to pay for it.  I assume that means no kids either.

Our Central Bankers and Government really did destroy family didn't they...

[WICAO]

5 minutes ago, Democorruptcy said:

I hope it's a temporary lower CGT before it goes up annually to 60% then 80% then 100%!

More pandering to the BTL brigade.  Does this mob even know there is a productive economy out there that is being taxed into oblivion.

[Yadda yadda yadda]

19 minutes ago, WICAO said:

I wasn't trying to compare it to my lifestyle but merely show that there must be better options elsewhere even when earning less money.  It's not always about the hourly rate.

Not an expert and it doesn't affect me so will do this quickly.

So after tax and NI our £35,100 turns into £2,271 per month.  Now let's say our bar tender has somehow managed to rustle up the £33,000 deposit for said shit flat so we're borrowing £297,000.  Let's say 30 years and let's go with the big mortgage boys, Nationwide, on a 2 year fix hoping we can do the same again in 2 years and so forth.  That's £1,227 per month.  So our bartender has £1,044 left after paying taxes and a mortgage.

Plan B is to get out of London and pay, what, £150,000 for a flat...  But instead of earning the big bucks we're now at the minimum wage of £9.50.  So £22,230 per annum.  After tax and NI we're at £1,555.  With our £33,000 deposit now we're borrowing £113,000 meaning our repayments are now £479.  So now our bartender has £1,076.

So our fantastic £15 per hour wage in Norwood is no better than minimum wage in a part of the country with more affordable housing.

London is a place for the rich or the benefits class IMHO.

People are different, have different expectations, aims and objectives. Which is just as well. Your aim has been achieving financial independence with the objective of having the ability to retire early when you decide to do so. That is fine and at least you know what you want and stuck to a plan.

Someone working in a bar is likely to have very different motivations. Could be that they enjoy it. Wouldn't suit me but does suit others. Owning a home may well come well down their priorities. Their life, their choice.

Edit to add the working class in Durham and Teesside probably can buy a home on one wage. Parts of Cumbria too.

[Democorruptcy]

6 minutes ago, WICAO said:

More pandering to the BTL brigade.  Does this mob even know there is a productive economy out there that is being taxed into oblivion.

Could it be partly to help bankers, as usual? It's CGT so only a profit must exist, overstretched landlord on Interest Only paying less tax might help their overall position and so their bank?

Could be a vote winner? Landlord happy and if he sells to a young couple who get a "Help to Exit Rent" equity loan, they could be 3 Tory voters.

[DurhamBorn]

30 minutes ago, HousePriceMania said:

 

 

WTF !!!

BTL is finished for anyone with 70% leverage,the signs are everywhere,just takes time,probably a decade to work its way through.Makes no difference of course while bennies fund immigrants rent,need to build 1000 houses a day just for them.

[DurhamBorn]

6 minutes ago, Yadda yadda yadda said:

People are different, have different expectations, aims and objectives. Which is just as well. Your aim has been achieving financial independence with the objective of having the ability to retire early when you decide to do so. That is fine and at least you know what you want and stuck to a plan.

Someone working in a bar is likely to have very different motivations. Could be that they enjoy it. Wouldn't suit me but does suit others. Owning a home may well come well down their priorities. Their life, their choice.

Edit to add the working class in Durham and Teesside probably can buy a home on one wage. Parts of Cumbria too.

If i was 23 again id be considering the fact i could nail dozens of women in that job,paid would be a bonus 

[WICAO]

5 minutes ago, Yadda yadda yadda said:

People are different, have different expectations, aims and objectives. Which is just as well. Your aim has been achieving financial independence with the objective of having the ability to retire early when you decide to do so. That is fine and at least you know what you want and stuck to a plan.

Someone working in a bar is likely to have very different motivations. Could be that they enjoy it. Wouldn't suit me but does suit others. Owning a home may well come well down their priorities. Their life, their choice.

Edit to add the working class in Durham and Teesside probably can buy a home on one wage. Parts of Cumbria too.

Oh I agree we're all different and as you say just as well.  It'd be a pretty boring place if everyone was like me.  Oh and if everyone was like me I wouldn't have been able to do what I've done so just as well.  

What I do think though is that to live our best life we need to think about more than maximising earnings.  Now I'm the first to admit that I chased the £ notes for a period but I did it knowing that it was for a period and also knowing that I could save hard while still living a very good life.  It was a specific use case.

We first of all need to think about what in this world will bring us and our loved ones deep joy.  Then we need to figure out how to get it and it's not always going to be by maximising earnings.

[WICAO]

10 minutes ago, Democorruptcy said:

Could it be partly to help bankers, as usual? It's CGT so only a profit must exist, overstretched landlord on Interest Only paying less tax might help their overall position and so their bank?

Could be a vote winner? Landlord happy and if he sells to a young couple who get a "Help to Exit Rent" equity loan, they could be 3 Tory voters.

Well it certainly isn't going to be to help the young first time buyer.  After all they're not going to give it away...

[Froggy2000]

27 minutes ago, WICAO said:

I wasn't trying to compare it to my lifestyle but merely show that there must be better options elsewhere even when earning less money.  It's not always about the hourly rate.

Not an expert and it doesn't affect me so will do this quickly.

So after tax and NI our £35,100 turns into £2,271 per month.  Now let's say our bar tender has somehow managed to rustle up the £33,000 deposit for said shit flat so we're borrowing £297,000.  Let's say 30 years and let's go with the big mortgage boys, Nationwide, on a 2 year fix hoping we can do the same again in 2 years and so forth.  That's £1,227 per month.  So our bartender has £1,044 left after paying taxes and a mortgage.

Plan B is to get out of London and pay, what, £150,000 for a flat...  But instead of earning the big bucks we're now at the minimum wage of £9.50.  So £22,230 per annum.  After tax and NI we're at £1,555.  With our £33,000 deposit now we're borrowing £113,000 meaning our repayments are now £479.  So now our bartender has £1,076.

So our fantastic £15 per hour wage in Norwood is no better than minimum wage in a part of the country with more affordable housing.

London is a place for the rich or the benefits class IMHO.

Agree. and that £1076 goes a lot further in most parts than £1044 in London. Plus I'd say the difference in flat prices is probably greater than that although appreciate you were probably being conservative. Can probably walk to work too rather than pay TFL. Less likely to get stabbed too.

[Bus Stop Boxer]

27 minutes ago, WICAO said:

More pandering to the BTL brigade.  Does this mob even know there is a productive economy out there that is being taxed into oblivion.

They'll have been told there's a house price wobble. 

There'll be another help to scheme along soon, and 40 year loans will be standard.

[Plan-b]

46 minutes ago, HousePriceMania said:

 

 

WTF !!!

"the Prime Minister is keen to do something radical on housing before the next election"

How about a subsidized right to buy like your predecessors did with council houses?

[WICAO]

2 minutes ago, Froggy2000 said:

Agree. and that £1076 goes a lot further in most parts than £1044 in London. Plus I'd say the difference in flat prices is probably greater than that although appreciate you were probably being conservative. Can probably walk to work too rather than pay TFL. Less likely to get stabbed too.

TBH I'm not claiming to be an expert but instead just trying to be deliberately controversial to help with our thinking.

My strategy was all about living a good life while saving hard as step 1 which meant earnings - spending including taxes and NI.  The important piece is that it's not earning or spending individually but the delta between the two while not forgetting the living well bit.

For me that meant living in the South East but others mileage may and does vary.

[Chewing Grass]

Just now, Plan-b said:

"the Prime Minister is keen to do something radical on housing before the next election"

How about a subsidized right to buy like your predecessors did with council houses?

Right to buy off Private Landlords would do the trick.

[Axeman123]

1 minute ago, Plan-b said:

"the Prime Minister is keen to do something radical on housing before the next election"

The Prime Minister is just setting landmines for his imminent successor IMO.

[WICAO]

1 minute ago, Bus Stop Boxer said:

They'll have been told there's a house price wobble. 

There'll be another help to scheme along soon, and 40 year loans will be standard.

When does the sell a kidney for a deposit scheme start...

That said Australia isn't much better.  I've heard it described as a quarry with a real estate agency attached.  New labour government is also going to bring in something like Help to Buy as I understand it so they're still trying to continue to destroy the young here as well.  Anything but letting shelter revert to it's true value.

[Chewing Grass]

Apparently the 'World Economy Has a Buffer Against Recession', this must be one of Klaus Schwabs chicks.

[WICAO]

2 minutes ago, Chewing Grass said:

Apparently the 'World Economy Has a Buffer Against Recession', this must be one of Klaus Schwabs chicks.

Does anybody know what that buffer is?

[THE SOUP DRAGON]

3 minutes ago, WICAO said:

Does anybody know what that buffer is?

Monkeypox. Fire up the printers.

 

[Bricormortis]

15 minutes ago, Chewing Grass said:

Apparently the 'World Economy Has a Buffer Against Recession', this must be one of Klaus Schwabs chicks.

What she can be quite fairly interpreted as saying  (based on that article )link  is that the IMF growth forcasts may be over optimistic. ( She is saying " Look we forcast growth of 3.6 %. Thats the buffer . However things are going to shit all over the place and we are probably wrong about all that " )       ( Not her actual words though )

So she will either be right or she will be right. She gets paid for this sort of stuff you know.

[CannonFodder]

3 hours ago, DurhamBorn said:

The economy is trying to price discover in all areas,but the government is stopping it by trying to stop anyone on the state tit losing anything.Its a disaster to do that,but they dont seem to understand it.Of course up until now it was more hidden as monetising debt was how they did it,so still taking spending power from the productive,but most dont understand that.Now QE is finished they have to tax to spend more,and it seems they are deciding to just take saved capital direct now.Windfall taxes are just nationalisation without having to even pay for our shares.

I expect the collapse is more likely than you may be thinking.

In my experience, people do one of two things when they hit trouble - they either do more of the same thing or less of the same thing.

Its rare that they do anything fundamentally different

[King Penda]

1 hour ago, WICAO said:

I wasn't trying to compare it to my lifestyle but merely show that there must be better options elsewhere even when earning less money.  It's not always about the hourly rate.

Not an expert and it doesn't affect me so will do this quickly.

So after tax and NI our £35,100 turns into £2,271 per month.  Now let's say our bar tender has somehow managed to rustle up the £33,000 deposit for said shit flat so we're borrowing £297,000.  Let's say 30 years and let's go with the big mortgage boys, Nationwide, on a 2 year fix hoping we can do the same again in 2 years and so forth.  That's £1,227 per month.  So our bartender has £1,044 left after paying taxes and a mortgage.

Plan B is to get out of London and pay, what, £150,000 for a flat...  But instead of earning the big bucks we're now at the minimum wage of £9.50.  So £22,230 per annum.  After tax and NI we're at £1,555.  With our £33,000 deposit now we're borrowing £113,000 meaning our repayments are now £479.  So now our bartender has £1,076.

So our fantastic £15 per hour wage in Norwood is no better than minimum wage in a part of the country with more affordable housing.

London is a place for the rich or the benefits class IMHO.

This is the correct way to look at it ,I can earn 4 quid an hour less than other people and still be far better off no debt at all.I could even afoard another morgage on benifits (obviously they won’t let me do that ) because my life style has no debt and fewer out goings

[Joncrete Cungle]

2 minutes ago, CannonFodder said:

I expect the collapse is more likely than you may be thinking.

In my experience, people do one of two things when they hit trouble - they either do more of the same thing or less of the same thing.

Its rare that they do anything fundamentally different

Printy printy bennies up, pensions up, government spending up etc. There is an election due in 2 years in the UK and USA. I can't not imagine the printers getting put back on warp speed 10 in the run up. Classic polo can kicking and trying to buy votes in the face of the inflation caused by Putin