ForgeCorvus wrote:Cynic, two questions.
First, do you love your job? I don't mean like or don't mind it, I say love as in you'd do it for free if you didn't need to work
The second one is, do you know that your job is secure for the rest of your life (or at least until you've paid the mortgage off) ?..... This includes you being able to carry on working
If the answer to either of these is "No" you'll see why killing the mortgage as quickly as feasible is often classed as a prep.
Always remember Micawber's Law.
Micawber wrote:Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. T
You nailed it!
In three words I can sum up everything I have learned about life: It goes on.
Robert Frost.
Covid 19: After that level of weirdness ,any situation is certainly possible.
I do love my job, and it's pretty secure for now but I don't think any job is truly secure...
Definitely being debt free and a home owner would be ideal and financially it makes sense to do it quicker rather than slower. I just wonder if perhaps investing in things like vehicle/solar power/house improvements would put me in a better position overall than paying off the M 3-4 years earlier...
The last taboo is the myth of civilisation. It is built upon the stories we have constructed about our genius, our indestructibility, our manifest destiny as a chosen species. - The Dark Mountain Project Manifesto http://dark-mountain.net/about/manifesto/
CynicalSurvival wrote:Very good points ForgeCorvus!
I do love my job, and it's pretty secure for now but I don't think any job is truly secure...
Definitely being debt free and a home owner would be ideal and financially it makes sense to do it quicker rather than slower. I just wonder if perhaps investing in things like vehicle/solar power/house improvements would put me in a better position overall than paying off the M 3-4 years earlier...
That's the 64 thousand dollar question. We all have to 'risk assess' that one. If we knew what was round the corner life would be a lot easier. We all have to strike a balance between the 'real' world and 'prep' world, there's a distinct lack of hollowed out volcano's ready to be turned into lair's in the UK. I suppose on the 1 to a hundred scale of where you are as a prepper we all set our own mark. Assuming 1 means you like to have a torch and a hundred is spending every single moment and penny getting ready for the apocalypse there will be very few of us that are in the 80's never mind hitting the hundred. Life goes on and using the prepping as insurance analogy, who spends all their money on insurance ?
I personally have no qualms about having a mortgage. People have to have a roof over their heads just as much as food in their stomachs. Owning your home these days is a good idea as your not lining the pockets of unscrupulous private landlords and gone are the days of cheap social housing. When I was a child we lived in council housing and the rent was probably not more than the weekly shop. These days renters have to provide for people's pensions so they buy homes to let and charge exorbitant rents, a lot of them do not take on the responsibility of maintaining them and they force their customers to live in squalor. Having a mortgage does cost me, but it's well worth it for the peace of mind it provides, and at the end of the day if the SHTF all bets would probably be off. Oh and don't forget to put your home in your kids name or someone that you trust when you get older, as you would not want to have to sell it to pay for your care if you get Dementia in your retirement.
Phil
PS I do agree that you have to live within your means though
The rent on my second house doesn't even cover my maintenance costs, let alone the mortgage. I've got to pay gas certificate fees, insurance, agent fees and now Liverpool council is piloting a new tax that costs me about £300 a year (which is nothing but a tax no matter what they say).
There is a constant battle between tenants and landlords, the tenants feel like they're paying too much but most landlords (like myself) are losing money than they're earning and fulfilling basic maintenance duties. I get the same phone call every year from my tenant - the boiler doesn't work. So she, the same woman, has called out a plumber to come and increase the pressure at a cost to me of £50. Plus, I also get an average of one phone call a year asking for some sort of home improvement, like a new door on the bathroom or a new carpet upstairs.
My mortgage is already higher than the rental income, but I justify it because I just have to hand on to the house like this for another fifteen years before it should generate me a small income. It's my pension, my nest egg. But how could rent ever stay low when house prices are so high?
The reputation landlords have is a bad one, but it's not true in most cases. Most landlords want to keep their tenants happy because they want them to stay living in, and taking care of the house. Landlords are in just as bad a situation as the tenants. The real one to blame for the lack of social housing would be Thatcher (so I believe).
I love motorcycles like a fat guy loves cake. I also love cake.
The question I've got to ask then Dangerman is why do it, who need that hassle for very little return? You say it's your nest egg/pension, but there must be a better way to invest your money than this. When I returned to Liverpool a few years back; I rented for a year as that was the contract. The electrics were a death trap, there were bare electrical sockets and this was when I moved in. I won't bore you with all the hassle I had, needless to say I could not wait to move out. As you say not all landlords are bad, then again not all tenants are either, but on my experience of private landlords; I would much rather have a mortgage. I totally agree with your last sentence.
Decaff wrote:Anyone struggling with debt should take a look at http://www.daveramsey.com there are a lot of good ideas to be found and you don't need to spend money to get books etc, its all out there on utube.
I hate debt, I have zero. No credit cards, no store cards, no loans. If I want it, I save for it. I have my budgets and I stick to them. It gives huge peace of mind and I never fear a knock at the door. Mr D on the other hand is drowning in debt. I've given up trying to help sort it out, didn't help that he ran up another debt on a credit card I had no idea he had. He wants everything NOW and doesn't save for it. He's stressed to the Max and sleeps badly.
I watched the video "What if you didn't have car payments?" on this website and it completely changed my attitude towards cars and debt. Until recently I have always leased cars. Now I drive an old but reliable car that I can either maintain and repair myself or at least very cheaply. I've been saving the amount that I used to spend on my lease car every month, which means that I now have plenty put aside for any repairs required and within a couple of years I will have enough put by to buy something a bit nicer if I want.
dangerman wrote: The rent on my second house doesn't even cover my maintenance costs, let alone the mortgage. .
My mortgage is already higher than the rental income, but I justify it because I just have to hand on to the house like this for another fifteen years before it should generate me a small income.
Christ on a bike. Sounds like an incredibly poor investment situation to have fallen in to, over a term that is impossible to predict things like interest rates and with an uncertain return in the end.
Unless you're feeling philanthropic towards your tenant, and assuming you're not in negative equity, have you considered selling up and looking at other investment vehicles?
Indeed, I'm not best pleased with my investment and I'm sure I could have done better. I mortgaged it while I was living in it, at just the moment that property values dropped. I lived in it until my family grew too big. I had negative equity and so I acquired a consent to let and the rest is history.
I've looked at selling it, but after all I've been through with it I'm rather attached. I could sell it now and I'd get about 20k back on it, it's not in negative equity anymore. But I don't think it's worth it, I'd rather just plow along and invest in something else later.
Meantime I look at it as a savings plan. Pay a bit too much now but then it'll start paying off when I'm older. Once I finish my course I'll sort something out with managing it myself and remortgage it etc. But it is nice to have just as a back up (in case I'm evicted from my primary residence again). I'm absorbing the deficit for now and so I'll persist. If I just hold out for the next couple of years and then get a lower rate of interest (chances of that?) I'll start to break even, and at that point the tenant will be clearing my mortgage and costs. Any surplus I'll just put towards clearing my balance. Hopefully I'll have it owned outright in 10 years or so, but I've not put a massive amount of planning into it as you can see.
I love motorcycles like a fat guy loves cake. I also love cake.
dangerman wrote:Indeed, I'm not best pleased with my investment and I'm sure I could have done better. I mortgaged it while I was living in it, at just the moment that property values dropped. I lived in it until my family grew too big. I had negative equity and so I acquired a consent to let and the rest is history.
I've looked at selling it, but after all I've been through with it I'm rather attached. I could sell it now and I'd get about 20k back on it, it's not in negative equity anymore. But I don't think it's worth it, I'd rather just plow along and invest in something else later.
Meantime I look at it as a savings plan. Pay a bit too much now but then it'll start paying off when I'm older. Once I finish my course I'll sort something out with managing it myself and remortgage it etc. But it is nice to have just as a back up (in case I'm evicted from my primary residence again). I'm absorbing the deficit for now and so I'll persist. If I just hold out for the next couple of years and then get a lower rate of interest (chances of that?) I'll start to break even, and at that point the tenant will be clearing my mortgage and costs. Any surplus I'll just put towards clearing my balance. Hopefully I'll have it owned outright in 10 years or so, but I've not put a massive amount of planning into it as you can see.
It might be worth speaking to a mortgage broker, if your circumstances are a bit tight at the moment you could go interest only for a few years, that helps in the short term while keeping it 'yours'. I've got 3 rentals, 1 is a repayment and I'm making about 75 quid a month on it although as you know, there are costs as well, I'm having to pay 360 this month to get windows fixed. The other 2 are interest only so I'm making money in the short term on those with the rentals, when I've paid off the repayment I'll be changing one or both of the interest only's to repayment. If you're not still in your tied in period its worth a wee nosey to see what's out there. I don't know your figures but even if you're having to make up a hundred quid a month, it will be worth it when the mortgage is paid off. Good luck with it anyway.
