the state of the UK economy

[Ansel]

off the radio last night:

http://www.divshare.com/download/16904384-a9b

[squeezyjohn]

Thanks for the link Ansel - it condenses what I already know in to a very short listen!

If everyone listened to the now distant voices of our very wise grandparents then we'd all realise the problem.

Never, ever, owe anyone anything. It is a shameful way to live your life, you will always end up richer by saving up for what you want and paying with real money than borrowing, and if you ever go bankrupt - that is essentially a legal form of theft from other people (your debtors) ... sorry Iceland, that's what my Grandma always said and she was correct.

And what do I get from living my life this way? Shafted because for decades the rest of the population (including the people who run the UK) have borrowed beyond belief, believing the lie that growth will continue forever on a wave of optimism. The non-politicians have been subjected to a barrage of propaganda telling them that they need to borrow huge sums like everyone else to make their life worthwhile fuelled by the rhetoric of our short-term moral-free politicians hoping they will get re-elected if they can make everyone feel happy under false pretences.

The result - despite living without borrowing a penny, I now owe 9.5 x my annual income thanks to the mis-management of my country, along with every single one of my compatriots.

And you wonder why I'm grumpy about some things?

[Frosted]

So you get a job. You can't go to work unless you get a car. You need to save £10,000 to get this car to go to your job but you can't save the money unless you've got a job.

I have no problem with people borrowing money so long as it's done within their means.
The major problem is people being given mortgages that they can't afford. Another major problem is credit cards - banks dish those things out like sweets....it's bloody criminal. I've never used a credit card and never want to.

[squeezyjohn]

I take your point to some degree. And totally agree about credit cards. Borrowing within your means ... that means if everything goes completely tits up, worst case scenario, you can still get out right? That's pretty close to having enough money to buy the things you need to live isn't it?

But no-one needs £10k to get a car! I've never paid more than £3k for one and if well chosen they normally last for ages (if you look after them)

I suppose if you're prepared to live your life a certain way, then you'll find a way.

[Frosted]

But no-one needs £10k to get a car! I've never paid more than £3k for one and if well chosen they normally last for ages (if you look after them)
.

It economically works out cheaper to buy a new car.

My example - My Peugeot 207 diesel £12,000 new. First 3 years, no MOT - warranty included. £30 a year tax. It does 54 mpg in town - 70mpg on the motorway. Tyres are £50 each.
This car is now 6 years old and I've not had to do a thing to it. It's even got the same windscreen wipers on it.
If I bought this car now at 6 years old it would cost me £6,000 as they hold their value. I wouldn't want to buy this car now as it's at a stage where it WILL need some work doing to it at some point - whether it be clutch, gearbox seals, bearings, timing belts etc.

Another example - my Peugeot 407 diesel second hand and cheap. Problem after problem after problem. It's a feckin heap.

Anyway, it's a bit silly comparing cars with debt. There's always value in a car. So I took out a loan for the Peugeot 207 over 5 years. I broke even after 2.5 years and if that cars bought new you'll not have to do a thing to it. As it happens, I'm keeping it. The costs have been amazingly low.

[WickedKitchen]

i use my credit card primarily for purchasing snus.

[sgreger1]

I only use credit when purchasing large quantities of crack, what could go wrong?

Debt is good and at the same time bad. It can help an entrepreneur start a company, help educate a college student etc, but like with any investment you have to be sure that the ROI is there. If you are getting a loan for a $20,000 car and you only make $2,000 a month, than surely you can see how any potential ROI you may realize on the car (from being able to drive to work etc) is outweighed by the rate of interest.

The key to financial success is to pay yourself first. Of all the gold you earn, pay yourself 10%, set it aside. Once you have enough, invest it wisely, as each gold is a slave which will go out and bring more slaves that will work for you around the clock to bring in even more slaves yet. Invest poorly, get into debt etc and quickly you will see your wallet becoming lighter and lighter, until eventually you are a failed superpower reminiscing about that one time back in high school when you beat the nazis and won the cold war but now live in a trailer park smoking meth with nothing to show for your previous successes.

[Darwin]

There is an old rule of thumb to the effect that one's domicile should cost no more than twice one's salary and one's transportation should cost no more than one half one's salary. These two areas get pushed across that line more, far more usually, than any other and virtually always to one's regret. No rule of thumb I know of concerning one's personal suite of electronic gear but there's hardly anyone alive these days that's not in over their heads on that score.

[muddyfunkstar]

Not a hope in hell of buying a house for only twice an average salary in the UK.

[Fazer]

Unfortunately we have a fractional reserve banking system and live in a debt based economy, once you understand how that works you can see that every year, more debt is needed in the system for it to say afloat. The thing is, it can’t stay afloat indefinitely, and the system has to collapses in on itself under the weight of debt at some point in time. I truly believe that day is getting closer, that’s why I’m out of the worthless paper fiat currency system as far as savings go. All of my saving are now converted to gold and silver, i started doing this around a year ago, now i'm all in ...

http://en.wikipedia.org/wiki/Fractional_reserve_banking

I saw this guy in London last November on a two day conference about sound money, it really opened my eyes and confirmed to me at least, that what I’m doing is the right thing for me. It’s a long video (it's 1.5 hours), but the first 3 minutes make you think. Everybody really should watch this, or at least the first half hour.

[squeezyjohn]

Frosted, I bow to your superior knowledge of car economics ) I never had enough to buy a new one and didn't want to use debt to fund one and I suppose I must have been lucky (and I fix a lot of the problems my van has myself).

Fazer - thank you for the link. I ended up watching the whole thing - I have a feeling it's a little biased (and quite US specific at times), but it's very well explained economics none the less and I think everyone could benefit from watching it. I've been looking in to the whole gold thing, but was very confused as to how best to go about it. What are your opinions? Stuff it under the mattress or trust it to a bank? I'm not sure which is safer!!!

Cheers

Squeezy

[Fazer]

Frosted, I bow to your superior knowledge of car economics ) I never had enough to buy a new one and didn't want to use debt to fund one and I suppose I must have been lucky (and I fix a lot of the problems my van has myself).

Fazer - thank you for the link. I ended up watching the whole thing - I have a feeling it's a little biased (and quite US specific at times), but it's very well explained economics none the less and I think everyone could benefit from watching it. I've been looking in to the whole gold thing, but was very confused as to how best to go about it. What are your opinions? Stuff it under the mattress or trust it to a bank? I'm not sure which is safer!!!

Cheers

Squeezy

With regards to the video, yes it’s US specific at times, but the two day conference in London was UK specific. It’s all the same when you look at the big picture.

Look at it this way John. If you put your gold in a safety deposit box and the bank goes under, or the system collapses completely, then what, you can’t get at it, it’s absolutely the worst thing you can do. Why would anybody entrust their gold to the bank, the very same people that run the debt based fractional reserve banking system that got us into this mess in the first place. All I’m going to say is mine is in a safe place. Dig a hole in the back yard, put it under the floor, think outside the box

If you had £10.000 to invest, i’d do 60% silver 40% gold, I’ve a nice stack of silver but I wish I had more gold, which is what I’m working on this year.

This is who i use

http://www.bullionbypost.co.uk/

Most silver and gold investors are deceived by paper silver and gold. Gold and silver certificates and the like. Over 95% of precious metals investments are paper, rather than real silver and gold, or money … real money … not paper currency

Remember … If you cant touch it you don't own it

[squeezyjohn]

Well all I can say is that I wish I had your balls (figuratively speaking of course). I don't think that I could bear the stress of knowing it could be stolen at any time - it would make me more paranoid than thinking about the banking system.

[Fazer]

Well all I can say is that I wish I had your balls (figuratively speaking of course). I don't think that I could bear the stress of knowing it could be stolen at any time - it would make me more paranoid than thinking about the banking system.

I was a bit paranoid at first, only a bit, then i fugured what the hell, do it ... It's nice to get it out once in a while and just look at it all ... Just something about it that makes me smile

Another good video from Mike Maloney is this ....

And the book is all out good education

http://www.amazon.com/Rich-Dads-Advi.../dp/0446510998

[Frosted]

Frosted, I bow to your superior knowledge of car economics ) I never had enough to buy a new one and didn't want to use debt to fund one and I suppose I must have been lucky (and I fix a lot of the problems my van has myself).



Squeezy

It's actually six of one half a dozen of the other with cars but if you're able to fix them yourself you're obviously on a winner.