I've been tripped up so much, even about doing web dev, people thought I became weird and basically hated me for being nerdy, and they told me just to take any job.

And this is what i've been focusing on recently is changing my path, but just think actually I was doing fine in the beginning, I got tripped up by people, listened to their advice, listened to when they said "your not at degree level just yet" and don't do degree, that's what they told me on my last course, it's so bad, I just can't believe some people, if I had never listened to or even had their discouragement I would of kept on going. Ever since I've been listening to what they've told me to do, it's set me back quite a few years, really it was better just being arrogant. Telling me to do a delivery driver job, then I end up buying a car wasting all my money on fuel, insurance, tax, repairs, then in the end not even getting a delivery driver job, or saying work as stacking shelves or something, or whatever, not even being able to start as an electrician, despite buying all the tools, so my gut feeling all along was right, you end up getting taken the p*** out of and messed around.

Well the thing is actually if I just kept doing what I was doing I would have been alright but i'm 26 now and this course has wasted my time, people have tripped me up, pulled me down, misdirected me, given me bad advice etc. They just won't leave me alone to the point you just give up. Not only that employers will often just take the p*** out of you. I do realize now people have wanted to trip me up as much as possible and when they do, they'll show you they weren't a friend anyway, I find the more I listen to people the further i'll be lost away from the path I'm supposed to be on, so yh people only want to screw me over, in every aspect of my life I have people who want to see me in the ground and they did that to me, I'm not sure if i'll ever be the same again.

I'm trying to get back on track but really it's not the same as what it used to be so I just feel like there's no point.

Edited July 8, 20206 yr by NullDrone

5 hours ago, NOCK said:

1. Make your own decisions

2. Stop blaming others

3. Work hard

I used to think getting a mortgage was so much better than renting and there was genuine opportunities for investing the housing market, then reality smacked me in the face very hard, now I know that basically the interest on a mortgage is the same as rent, actually I would be paying more in interest than I would renting, so yh I've just lost motivation for life completely, would really like to get it back but there's just an absense of hope, it seems to me when your young you think you can avoid the rat race, but it seems pretty much inevitable now, reality hits you and hurts you.

I used to wake up every day and do my work but now just can't get motivated again since I realized this. Doesn't mean you can't save money though. I was thinking maybe you could be criminal instead and deal with say £100,000 bounty instead of being tied down by mortgage having kids and wife to feed.

Edited July 8, 20206 yr by NullDrone

9 hours ago, NullDrone said:

I used to think getting a mortgage was so much better than renting and there was genuine opportunities for investing the housing market, then reality smacked me in the face very hard, now I know that basically the interest on a mortgage is the same as rent, actually I would be paying more in interest than I would renting, so yh I've just lost motivation for life completely, would really like to get it back but there's just an absense of hope, it seems to me when your young you think you can avoid the rat race, but it seems pretty much inevitable now, reality hits you and hurts you.

I used to wake up every day and do my work but now just can't get motivated again since I realized this. Doesn't mean you can't save money though. I was thinking maybe you could be criminal instead and deal with say £100,000 bounty instead of being tied down by mortgage having kids and wife to feed.

One thing I know about is houses and investments.

You're right that the interest on a mortgage can be looked at as rent, so renting isn't 100% dead money.  However financially renting over time will make you worse off — Especially in the long term.  Let me explain

1. Interest on a mortgage is typically much lower than equivalent rent.  I currently pay about £500/m in interest on the mortgage for my house which I've owned for 2 years.  However if I were to put the property on the rental market it would cost a prospective tenant around £1600pm to rent.  Remember a mortgage has two portions when you pay it:  the interest and the principal, the principal is essentially building your equity, only the interest portion is going to the bank.  Given the historically low interest rates we're getting a superb deal right now.  Even if they were to rise to 5% it's still a MUCH better long-term deal than renting.
2. The payments on my mortgage will stay fairly stagnant (with some fluctuations with interest rates, which reduces over time as the principal gradually falls), however when renting over a long period your rents would go up with inflation.  Fast forward 20 years assuming and inflation rate of 3%/y the rental on my house would be £2600pm.  Compare that to the mortgage at the time, there's 5 years left to pay and the interest at that point would be about £300/m assuming a 5% interest rate.
3. Eventually the mortgage is paid off and you have no rent to pay.  You can always release equity to invest elsewhere - perhaps in the stock market or some Buy To Let properties.

The main benefit to not having a mortgage is freedom to move around quickly say a big opportunity presents itself in another city, houses are a very illiquid investment, costly and time consuming to buy/sell etc.  You should be settled and prepared for the long haul if you want to buy, but long term it's one of the best investments you can make.

Another benefit to owning is security - you'll never be in the position of your landlord wanting to sell out, forcing you to move.  You can decorate or alter the house to your taste, when you eventually pass away it can be passed on as part of your estate to your loved ones.

I personally try to treat my home as a home, and not an investment.  I know long term it will put me in a good position but my "actual" investments are in the stock market where the YoY gains far outstrip what you'd typically make from your primary residence, is more liquid and diversified.  (Ignoring Buy to Let here for simplicity)

Edited July 9, 20206 yr by rbrtsmith

10 hours ago, NullDrone said:

I was thinking maybe you could be criminal instead and deal with say £100,000 bounty instead of being tied down by mortgage having kids and wife to feed.

Instead you'd probably have somebody who want's to kill you tying you down for stealing £100k from them.

Out mortgage will be paid off in 3 years. I can then stop work and enjoy life. The only money I need will be to pay for food and utilities plus a little bit for fun stuff.

Yes, in the initial years you pay more interest but after time you start paying off the principal. It doesn't take long for the mortgage to fall very quickly. I remember my Dad telling me his last mortgage payment was under £50.

I'm taking a slightly different approach, at least while the interest rates are so low and that is I'm extending the mortgage over the longest possible period in order to keep payments low.  I am investing the rest in a cheap index fund that has historically returned 8-9% YoY as an average over the past century.

given the stocks earn far more than the interest on the mortgage I should see a very nice return and in say 20 years time I could pay the mortgage off and have a load of savings still invested.  If interest rates were to rise beyond say 5% then I could aggressively overpay on the mortgage.  I know a number of people who've done very well off interest only mortgages and investing what would have been the principal payment.

3 hours ago, rbrtsmith said:

 

1. Interest on a mortgage is typically much lower than equivalent rent.  I currently pay about £500/m in interest on the mortgage for my house which I've owned for 2 years.  However if I were to put the property on the rental market it would cost a prospective tenant around £1600pm to rent.  Remember a mortgage has two portions when you pay it:  the interest and the principal, the principal is essentially building your equity, only the interest portion is going to the bank.  Given the historically low interest rates we're getting a superb deal right now.  Even if they were to rise to 5% it's still a MUCH better long-term deal than renting.

My flat is evaluated at around £130,000, and I pay around £80 in rent a week so i'm getting a pretty good deal IMO, the interest on a mortgage would be around the same price per week, and I see flats on gumtree/rightmove all the time around this price to rent, except i'm getting better deal on my place.

In my case all a mortgage would do is tie me down really, and if you don't keep up with repayments they'll take your house from you, not only that a drop in house prices would leave you screwed.

How much was it evaluated at?

Edited July 9, 20206 yr by NullDrone

7 minutes ago, NullDrone said:

My flat is evaluated at around £130,000, and I pay around £80 in rent a week so i'm getting a pretty good deal IMO, the interest on a mortgage would be around the same price per week, and I see flats on gumtree/rightmove all the time around this price to rent, except i'm getting better deal on my place.

In my case all a mortgage would do is tie me down really, and if you don't keep up with repayments they'll take your house from you, not only that a drop in house prices would leave you screwed.

Based on an interest rate of 1.5% on a £130k mortgage you'd be talking about £37.50 per week.  Much cheaper than your rent.

Also consider as mentioned earlier you rent will increase over time, whereas the extra £43.50 going towards your mortgage principal would be earning you equity + the flat value rising over time.  In 20 years time you'll be tens of thousands of pounds better off.

Edited July 9, 20206 yr by rbrtsmith

5 minutes ago, rbrtsmith said:

Based on an interest rate of 1.5% on a £130k mortgage you'd be talking about £37.50 per week.  Much cheaper than your rent.

Where do you find interest rate of 1.5%? I can only find 3-4%. Are you confusing the initial rate with the rate you'll pay after the initial period?

It may become worth it, cos my friends ex's parents had the flat reduced to half price buying it off the council, so say £70k which would actually be worth it.

Edited July 9, 20206 yr by NullDrone

2 minutes ago, NullDrone said:

Where do you find interest rate of 1.5%? I can only find 3-4%. Are you confusing the initial rate with the rate you'll pay after the initial period?

I pay that on my current mortgage, people with better LTV than me pay even less.  3-4% is VERY high given the current base interest rate set by the BoE.

1 minute ago, rbrtsmith said:

I pay that on my current mortgage, people with better LTV than me pay even less.  3-4% is VERY high given the current base interest rate set by the BoE.

Who's that with? I've check moneysupermarket and all the mortgages are between 3-4% after the initial period.

18 minutes ago, NullDrone said:

My flat is evaluated at around £130,000, and I pay around £80 in rent a week so i'm getting a pretty good deal IMO, the interest on a mortgage would be around the same price per week, and I see flats on gumtree/rightmove all the time around this price to rent, except i'm getting better deal on my place.

You can't guarantee the price you're paying will stay the same or your circumstances won't change. Don't forget, with a mortgage you're paying back something that you own, but with rent you don't own anything. Even if your mortgage payments are the same as rent, after a period of time you'll have something to show for the money you have put in, instead of being at 0 still.

Pretty much everyone where I live wants to be on the property ladder because of how lucrative it can be here and because of how unsafe renting can be. In well under 2 years the typical rental price for a one bedroom flat where I live has gone up from £900 to £1200 for the same style of accommodation, and it's looking to increase even more. The same can't be said for wage increases, which leaves people with uncertainty and puts them in a very difficult position, this can also happen unexpectedly.

At any time you can lose your job through something like Covid and you'll be stuck with rents to pay and no way to do it. Mortgages can give you options, like the ability to freeze or reduce payments and work alongside the bank. No landlord will give you the same options or time to work it out so there's a very good chance you could lose everything.

There are obviously pros and cons to both, but It's better to give yourself options as early as possible, just in case you decide it is for you after all or circumstances change. My parents paid much more than the current rate of interest on their property, you might look back when you want to buy and think 1.5% - 3% was an absolute steal.

35 minutes ago, NullDrone said:

Where do you find interest rate of 1.5%? I can only find 3-4%.

here:

https://www.moneysupermarket.com/mortgages/rates-table/first-time-buyer/?propertyValue=180000&mortgageAmount=150000&remainingTerm=25&repaymentMethod=Repayment&sortState=MonthlyRepaymentAmount

This is what I'd be looking at if I were to remortgage now https://www.moneysupermarket.com/mortgages/rates-table/first-time-buyer/?propertyValue=417500&mortgageAmount=312500&remainingTerm=33&repaymentMethod=Repayment&sortState=MonthlyRepaymentAmount

Interest rate as low as 1.14% on a two year fix.

1 hour ago, fisicx said:

here:

https://www.moneysupermarket.com/mortgages/rates-table/first-time-buyer/?propertyValue=180000&mortgageAmount=150000&remainingTerm=25&repaymentMethod=Repayment&sortState=MonthlyRepaymentAmount

The initial interests of 1.5% are there to bring in customers but then the rates go up to around 3.5% after 2 years.

You could say well yh it's paying into something your going to own, but how would that be any different to just saving the money, I suppose house prices do generally increase over time but they could also crash - isn't this what happened in 2007?

I used to think buying a house was great but think actually no it's not much different to renting, well in my case anyway.

Quote

Representative example: a repayment mortgage amount of £150,000 over 25 years, representative APRC 3.8%. Total amount payable £231,942.12 includes interest of £80,737.12 product fees of £995 and other fees of £210. Repayments: 26 months of £616.25 at 1.73% (fixed), then 274 months of £783.63 at 4.09% (variable). Early repayment charges apply.

So yh, it doesn't appeal as much as it did.

Edited July 9, 20206 yr by NullDrone

Those are just examples. We have been paying 1.4% for over 8 years.

19 minutes ago, fisicx said:

Those are just examples. We have been paying 1.4% for over 8 years.

How though? Was interest rates different when you got a mortgage. It doesn't really appeal at the moment from what I see.

A few years back I was thinking aww yh I could be a property investor or something, and that you could put no money down on a house and let it out, not true and not only that if you were to do that it'd be declarable income, and i'd have to give up this council flat, renting it out you'd have nowhere to live, it's only an option for someone who already has a home.

There's these property investor videos on youtube, samuel leeds, well he says you can become financially free and it's easy, he's been investigated by the BBC to be a scammer, he makes his money from selling courses, not from property.

Edited July 9, 20206 yr by NullDrone

51 minutes ago, NullDrone said:

The initial interests of 1.5% are there to bring in customers but then the rates go up to around 3.5% after 2 years.

The two-five years are the length of the fixed interest period mortgage term.  Once that has ended you are free to remortgage onto a new fixed deal with the same or a different provider without penalty.  This is what literally everybody does.  

I'm paying about 1.5% now but that will probably drop if I took another 2 year fix when my period ends later this summer.  I might go for a 5 year fix which will increase the interest upto about 1.4-1.5%

Edited July 9, 20206 yr by rbrtsmith

11 minutes ago, NullDrone said:

How though? Was interest rates different when you got a mortgage. It doesn't really appeal at the moment from what I see.

Right now interest rates on mortgages are the lowest they have ever been in history and are unlikely to be this low again within our lifetimes.  If now isn't a good time then you'll never find a good time.

56 minutes ago, NullDrone said:

I suppose house prices do generally increase over time but they could also crash - isn't this what happened in 2007?

 

Prices did crash in 2008, however they've now risen beyond the levels they were at then.  A crash is only bad if you have low equity meaning you'd struggle to sell or remortgage and when you're selling.  If you own outright or have a lot of equity and you're not looking at selling then the prices don't really make any different you your day to day lifestyle.
Think of it like a rollercoaster, it's a bumpy ride up and down, but with houses and the stock markets they always trend upwards, each peak and trough higher than the previous.  Take a look at the attached chart of the S&P500 index since 1990, you can see the crash in 2008, however look how much it's risen since.  Funny thing is you don't hear much about this in the media…. It will be the same after covid, they'll rally again.

Edited July 9, 20206 yr by rbrtsmith

9 minutes ago, rbrtsmith said:

The two-five years are the length of the fixed interest period mortgage term.  Once that has ended you are free to remortgage onto a new fixed deal with the same or a different provider without penalty.  This is what literally everybody does.  

https://www.moneysupermarket.com/mortgages/search/summary

The APRC is still around 3.3% lol, I'm not sure who your mortgage is with

I suppose if I were to buy my flat out at a discounted price then it'd be a good deal

Edited July 9, 20206 yr by NullDrone

2 minutes ago, NullDrone said:

https://www.moneysupermarket.com/mortgages/search/summary

The APRC is still around 3.3% lol, I'm not sure who your mortgage is with

I suppose if I were to buy my flat out at a discounted price then it'd be a good deal

APRC doesn't matter.  Not one bit.  As I've already explained unless you are financially mad then you remortgage when the fixed period ends.  The interest rate that matters is the one for the fixed period which is nowhere near 3.3%.

Just now, rbrtsmith said:

APRC doesn't matter.  Not one bit.  As I've already explained unless you are financially mad then you remortgage when the fixed period ends.  The interest rate that matters is the one for the fixed period which is nowhere near 3.3%.

Ahh right, and it's that easy to switch? I guess that makes sense then.

3 minutes ago, NullDrone said:

Ahh right, and it's that easy to switch? I guess that makes sense then.

Yeah it's easy to switch you just remortgage with another bank, and you can use a broker to do a lot of the work.   There's no penalty if it's after the fixed period.  You only pay a penalty if you switch during the fixed period.

4 minutes ago, rbrtsmith said:

Yeah it's easy to switch you just remortgage with another bank, and you can use a broker to do a lot of the work.   There's no penalty if it's after the fixed period.  You only pay a penalty if you switch during the fixed period.

k, i'm gonna check with the council to see if they would reduce the flat price by a half then I could consider buying it, my friends ex mum got it half price, if I did get mortgage and I was paying %1.7 or so that'd be £20 a week in interest. Would still need a job though, I think they said you need to be earning at least £25k a year, I'm wondering if it would be less for a smaller mortgage.

Edited July 9, 20206 yr by NullDrone

Next time I need some financial advice I'm going to ask a web designer. 😃

1 minute ago, Jo 90 said:

Next time I need some financial advice I'm going to ask a web designer. 😃

Going to an IFA costs money, they told me you need at least £100,000 for it to be worth it.

11 hours ago, rbrtsmith said:

APRC doesn't matter.  Not one bit.  As I've already explained unless you are financially mad then you remortgage when the fixed period ends.  The interest rate that matters is the one for the fixed period which is nowhere near 3.3%.

Thanks for that Robert i'm feeling quite a bit better now.

17 hours ago, NullDrone said:

Going to an IFA costs money, they told me you need at least £100,000 for it to be worth it.

Most financial advisors are very good at lining their own pockets by encouraging clients to go with high-fee investments and overcomplicating things to make sure you keep coming back.

Investing for the long term really isn't that complicated.  I spend a significant portion of my time reading through and talking with people who are striving for early retirement.  It's quite a big community with a lot of good blogs and the general consensus (like with coding actually) is the KISS principal.  Keep it simple.

All my investments (Pension—SIPP and S&S ISA) are using the Vanguard platform and are put in the S&P500 index.  I don't try to time the market or do anything clever to try and beat it as almost everybody that does looses in the long run.  I literally have direct debits setup to drip feed into it on a monthly basis.  If I get a bonus from work I just dump most of it into there and let it grow.  Maybe when I approach retirement age (known as withdrawal phase — I'm in accumulation phase now) then I'll diversify and put a proportion into bonds.

I've seen Financial advisors suggest gold, even when gold has historically returned very minimal gains and is costly to hold and unlike stocks it produces or innovates nothing.  Many also suggest using actively managed accounts (because they'll get commission) which charge fees of upto 2%.  Compare that to the S&P500 fund that costs me 0.07%.

There's a few pointers that I always follow when it comes to investing

• Never try to time the market.  Time in the market > timing the market
• Being diversified beyond a large stock index, bonds and your primary residence just adds complexity with no gain.  Buy to Let (BTL) can be good but it's labour intensive and recent tax changes have made this less attractive.
• Aim to keep fees as low as possible, they just kill long term growth.  Vanguard has the lowest fees for UK investors
• Keep an emergency fund in cash (easy access savings account) of about 3-6 months of expenses then you don't end up withdrawing from your stock portfolio to cover an emergency
• don't react to stock market changes.  At the start of Covid my portfolio dropped 30% costing me tens of thousands - or it would have if I'd withdrawn.  Now it's back up and only 5% below what it was in February.  There will be lots of crashes and rallies between now and retirement.  Accept they're going to happen and it's part of the course.  Think of it like climbing a mountain where you go up and down though overall you're trending upwards.
• Limit the amount of tax you pay.  Paying into a workplace pension will save you on NICs and income tax plus you'll get a minimum 3% match from your employer.  This is free money so it's a must!  For higher rate tax payers such as myself you'll get a 40% bonus.
• http://bankeronfire.com/ is a really good blog on this stuff, and the author is an investment banker - yet with his own money he invests passively and does not try to time the market or speculate on individual companies.  Says a lot.

Edited July 10, 20206 yr by rbrtsmith