Are you saying an older pensioner living in a $10mil home in Potts Point but living solely off the pension is worth $10mil? Does she die a millionaire but spends decades in abject poverty?
No, with a $10M home she would be living a life of absolute luxury.
Even if she only had a pension, she could rent out or Airbnb just one room of her house for more than you probably earn in a year, or she could tap into her massive net wealth using a reverse mortgage.
She could even rent out the whole house for about a quarter of a million dollars a year and go live somewhere smaller. Wealth opens up lots of possibilities and options like that.
She would also leave a very valuable asset to her kids/grandkids.
"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
Roddy, we were discussing your blunder when you said "Nobel prizes require a body of groundbreaking research" and your subsequent blunder when you said there's a Nobel prize for economics.
Asking me to name prize winners isn't going to make your blunders go away.
I was referring to how a suburbanite would not challenge the likes of Shiller in the likelihood of being offered a Nobel Prize, because the probability that you will be awarded one will be close to zero without a body of research.
Likewise, Robert Shiller won't win a Nobe Prize for literature for the obvious reasons.
Rising asset values can offer a home owner additional options though, like the ability to use that house as security for a business and other investments, borrow against it in the event of an emergency (medical, loss of employment, financial loss etc) and reverse mortgage it to supplement the pension when they retire.
I don't think you can just dismiss those advantages.
I'm not dismissing them, I actually highlighted them in number order in my first post. But it doesn't take away from the fact that as a single asset that. your PPORs value is irrelevant and you have acknowledged this.
As you've stated the only way to realise any value from your PPOR as an OO is to take out debt against it, what I'm saying is that debt has risk.
My overarching point was that house price escalation is sold to the masses in suburbs as a great thing but this is a fallacy. House price growth rewards investors only, it has no value to OO who do not have investments. So in short house price rises assist the 1.7mil investors and either do nothing or detract from the majority of the community. On the previso the investor doesn't spend every extra gain in order to stimulate the economy and fulfil a civc duty of course.
I was referring to how a suburbanite would not challenge the likes of Shiller in the likelihood of being offered a Nobel Prize, because the probability that you will be awarded one will be close to zero without a body of research.
Likewise, Robert Shiller won't win a Nobe Prize for literature for the obvious reasons.
"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
You keep proving time and time again you just don't get it, leave this discussion to the grown ups ok.
You means the grown ups who purchased PPOR's? Time for you to sign out.
Chris
8 Jan 2017, 03:05 PM
But it doesn't take away from the fact that as a single asset that. your PPORs value is irrelevant
Most people's biggest asset is irrelevant? Look I know it must burn you in a sensitive place, but it's not irrelevant - when a PPOR goes up in value so does your wealth.
Most people's biggest asset is irrelevant? Look I know it must burn you in a sensitive place, but it's not irrelevant - when a PPOR goes up in value so does your wealth.
Pete and shadow seem to get it, so does everyone else but you.
Explain to me in these terms. If I own a $10mil home in Potts Point I've had for 50yrs but live solely on the pension does that make me a millionaire? I'm not going to sell it, reverse mortgage or draw from it for investment, I'm just going to live on it.
An I a multi millionaire trollie? Do tell.
And if I die in those circumstances do I die as a millionaire?
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