BOE cuts base rate by 0.25%
07 December 2007, 04:37 PM
#63
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I don't understand the concern for retirement for those of us who rent.
If you live within your means, then by renting rather than buying in the present market conditions you have more left each month so you save or invest more. In the long run, property gives a good investment return, but depending on the period you take stocks usually do better in the long run as they should as there is a risk of total loss unlike with a property that you can insure and hold good title to. The only problem I have with our next house slush fund is protecting it from inflation and investment risk, both of which are concerns at present with the difference between base rates and inflation making it difficult to get a decent tax free return and most asset classes being arguably in bubble territory. Everything looks a bit risky at the moment (even/especially sterling in cash), and I'm not getting my risk premium to keep me happy.
If you live outwith your means you're ultimately stuffed anyway, and this little point is far more important than your view on what asset classes you buy or sell from time to time, since you won't have any money to buy anything except with debt which will enslave you.
If your income is steady (ie you are not a student or at the beginning of your career) then it makes very little sense to fund consumption out of debt to me. Yet that is what people are doing and this little rate cut is trying to keep it going a bit longer. It will just make the long term fallout worse IMHO.
I suggest there is an inverse correlation (not 100%) between television/mobile specification and indebtedness.
If you live within your means, then by renting rather than buying in the present market conditions you have more left each month so you save or invest more. In the long run, property gives a good investment return, but depending on the period you take stocks usually do better in the long run as they should as there is a risk of total loss unlike with a property that you can insure and hold good title to. The only problem I have with our next house slush fund is protecting it from inflation and investment risk, both of which are concerns at present with the difference between base rates and inflation making it difficult to get a decent tax free return and most asset classes being arguably in bubble territory. Everything looks a bit risky at the moment (even/especially sterling in cash), and I'm not getting my risk premium to keep me happy.
If you live outwith your means you're ultimately stuffed anyway, and this little point is far more important than your view on what asset classes you buy or sell from time to time, since you won't have any money to buy anything except with debt which will enslave you.
If your income is steady (ie you are not a student or at the beginning of your career) then it makes very little sense to fund consumption out of debt to me. Yet that is what people are doing and this little rate cut is trying to keep it going a bit longer. It will just make the long term fallout worse IMHO.
I suggest there is an inverse correlation (not 100%) between television/mobile specification and indebtedness.
07 December 2007, 09:03 PM
#64
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It's been inevitable for some time, and now it seems its happening! Jump out of a plane at a unknown height into a dark sky, and sooner or later you'll hit the ground!
I just hope the pound holds out long enough for me to get out the country and move to Oz, Switzerland or NZ, which I plan to do within 2-3 years!
I just hope the pound holds out long enough for me to get out the country and move to Oz, Switzerland or NZ, which I plan to do within 2-3 years!
07 December 2007, 10:03 PM
#66
As a few have mentioned on here - I also think dropping the interest rate is a silly idea. It's pretty obviously a cynical attempt to take pressure off the banks/building societies after their recent irresponsible lending attitudes which led to a massive over-valuing of the housing market.
07 December 2007, 11:15 PM
#67
07 December 2007, 11:38 PM
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