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That explains that then..
That explains that then..
Pension, other investments?
SkodaMart
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SkodaMart
Easier just to spend the money to buy isn’t it?
You then have something to leave your children to give them a hand in life to.
Maybe, maybe not. The point is that buying isn't a NEED, it's a preference. Just look at Germany or Japan for example.
SkodaMart
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SkodaMart
Is this the ‘great reset’ playing out?
“You will own nothing and you will be happy?”
“You will own nothing and you will be happy?”
SkodaMart
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SkodaMart
A friend of mine has rented his long term family home all his life - he grew up there.
It’s a 300 year old farm house with stunning views.
He’s now approaching retirement and he’s utterly up the creak without a paddle.
It’s really a British thing to own your house. On the continent it’s far rarer to own your house.
I’m not sure if you’re joking or not, but almost every company is pushing hard to turn everything into a service with a monthly fee. Xbox games, cars on loan, TV series, MS Office, music, Sage, Adobe Suite, Starbucks, etc.
What's the issue with debt?
SkodaMart
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SkodaMart
debt is the shackles of the modern day slave.
In all seriousness though.
People actually cripple themselves just to have the latest ‘bling’ and yes it applies to phones too.
Surely people rely on debt in order to ultimately own things, though?
People are crippled with debt because they have a phone contract?
SkodaMart
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SkodaMart
Try to minimise where you can.
Some debt is unavoidable. The mortgage example in question.
The thread is buy or lease?
Not avoid debt at all cost.
My answer is buy always - even if that means having a lower specification car, reliability and to some degree residual value are the important things.
(Don’t buy a car that’s going to loose a fortune if your already short of cash to start with).
SkodaMart
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SkodaMart
People pay outrageous amounts for the latest phones.
Younger people in particular who tend to be on lower wages to start with.
Would you pay £60+ a month for a phone?
I run the oldest, cheapest last gen phone deal I can get as it’s an utter waste of money.
I would, yeah. But it works on balance of my incoming/outgoing so it's not really an issue.
As an example I pay monthly (interest free) for my phone, even though it's completely affordable as a lump sum.
Debt isn't bad. Unaffordable debt is bad.
SkodaMart
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SkodaMart
So what happens if your circumstances change? Find yourself unable to work because of a global pandemic for example?
Take time off sick or accident.
I take it this ‘debt’ that’s so good requires insurance to protect it too?
Leave you to your misguided way of living.
My method has stood me in great stead all my life and will continue to do so.
1. I'm covered for critical illness via work
2. I have 2 years worth of living expenses in savings/short-term investments (if I am unfortunate enough to lose my job)
3. No insurance needed for this debt.
I have no issue with your method, I'm just pointing out that it doesn't work for everyone and there are different approaches. It's a balance of risk - your appetite for risk is clearly very low - which is fine. Mine is a bit higher and my decisions are based on that balance of risk. There's no value (to me) in building a life around the worst possible scenario. But I appreciate for others that's comforting.
To call it misguided is a little misguided.
Soldato
- Joined
- 27 Mar 2013
- Posts
- 9,332
On the subject of leasing, one of the guys I work with swears blind he doesn't have the option to buy at the end but couldn't explain why? Any ideas, I think he's misunderstood it personally as he said something along the lines of it goes straight to auction with no option for him to buy it which seems odd?
When you lease, you don’t have the option to buy. It’s a fixed rental period. Some may let you buy it but there is no contractual obligation and many will not because they’ll have to warranty the vehicle for 6 months.
PCP includes the option to buy via the ballon payment or hand back/trade in for a new car.
PCP includes the option to buy via the ballon payment or hand back/trade in for a new car.
It's not odd at all it's exactly how it works. A lease is simply a long term hire car, nothing more.
People constantly confuse leasing with car finance. Just because you pay monthly for a car doesn't make it a lease.