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The high cost of snake oil
Topic Started: 7 Jan 2017, 10:18 AM (10,301 Views)
Terry
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Khaderbhai
8 Jan 2017, 03:05 PM
Waffling won't make your blunders vanish Roddy.
Closing off the latest repertoire MC.
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Khaderbhai
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Wealthy Suburbanite

Chris
8 Jan 2017, 03:46 PM
You are an embacile!
Imbecile.
Terry
8 Jan 2017, 04:07 PM
Closing off the latest repertoire MC.
That's the way Roddy... start waffling about repertoires and perhaps your blunders will be forgotten.
Edited by Khaderbhai, 8 Jan 2017, 04:34 PM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"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."
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zaph
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Chris
8 Jan 2017, 03:46 PM
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?

You are an imbecile!
Have you reached puberty yet?
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Chris
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Khaderbhai
8 Jan 2017, 04:33 PM
Imbecile.

Thank you.

Amendment made, this time it was a brain fart and nothing to do with technology.
zaph
8 Jan 2017, 04:37 PM
Have you reached puberty yet?
I think a few people would be asking the same about you after that comment.
Trollie
8 Jan 2017, 04:02 PM
Absolutely you are a millionaire. Having an asset that you refuse to sell doesn't make you less wealthy, it just gives you options.


Not the question f***tard. Iif you just live in until the day you die, no leveraging off it, no reverse mortgages etc just live in it until they bury you do you die a millionaire?
Edited by Chris, 8 Jan 2017, 04:43 PM.
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Sydneyite
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Khaderbhai
8 Jan 2017, 03:01 PM
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.
+1 - same response pretty much I was going to write.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Rufus
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Chris
8 Jan 2017, 03:05 PM
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 take your point, an OO doesn't generally profit much from his/her house in the way an investor does, although it does afford the owner some benefits.
Buying a house has risk, and it requires an owner to make some effort to make extra payments and look after the house well, but then anything that you might gain from always requires effort and probably an element of risk. The world tends not to reward people who do nothing, that's the way it is.

I think the gains for a single home owning person or couple come in retirement where they don't have to pay rent, and when the last survivor has to be put into a nursing home, which is a high expense, the family can sell the house to fund that cost. People approaching and in retirement, are quite worried they will be left penniless poorly cared for in a state owned institution in their final days. Selfish I'm told by some, but I think everyone will have the same fears when they reach that age.

That isn't something available to a person or couple who don't own a home unless they have saved quite a bit for retirement, and in that case the government will penalise them for those savings because they probably won't meet the assets test or the income test for the aged pension.

Not sure where you stand on that issue Chris, but in any case we are wasting our time moralising on the issue, we all need to plan with the rules as they stand, not how we think they ought to be.
Edited by Rufus, 8 Jan 2017, 05:00 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Chris
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Rufus
8 Jan 2017, 04:57 PM

Not sure where you stand on that issue Chris, but in any case we are wasting our time moralising on the issue, we all need to plan with the rules as they stand, not how we think they ought to be.
My arguement is not that renting for life is a better option. No one wants to be paying private rent in retirement that is by far the worst case scenario.

My arguement is based on the falsities surrounding the idea you are richer because your PPOR you OO goes up in value, this is simply not true while you are living in it.

In no way am I advocating that people rent for life.
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herbie
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Rufus
8 Jan 2017, 02:31 PM
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.
Yep. Couple I know bought in 2001 - For $115K. (In outa bumf*** Shitvegas - where I am.)

Tha joint is now 'worth' maybe $335K (?) - Give or take a bit.

Hubby lost his job a while back (thru ill health). 'N he's not got another one yet.

They're not in clover. But are getting by. Wif interest ta tha bank now only bein' $5K pa (or less?).

'N $200 odd K in home equity bein' a pretty handy buffer for 'em ta have/be able ta draw down on a bit as 'n if 'n when circumstances should incline 'em too.

So they's definitely one home owner couple I reckon, wot's pretty happy house prices have gone up - 'N not down.

Wif tha fact they've gone up, genuinely seemin' (ta me at least) ta have genuinely made their financial situation better than if they woz tenants.

Wot would be tha situation if they woz tenants? (In similar circumstances).

Dunno. But it don't sound too flash ta me? (Unless of course, they'd invested wisely in tha stock markets and/or some such in tha interim I 'spose?)
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Rufus
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herbie
8 Jan 2017, 06:06 PM
Yep. Couple I know bought in 2001 - For $115K. (In outa bumf*** Shitvegas - where I am.)

Tha joint is now 'worth' maybe $335K (?) - Give or take a bit.

Hubby lost his job a while back (thru ill health). 'N he's not got another one yet.

They're not in clover. But are getting by. Wif interest ta tha bank now only bein' $5K pa (or less?).

'N $200 odd K in home equity bein' a pretty handy buffer for 'em ta have/be able ta draw down on a bit as 'n if 'n when circumstances should incline 'em too.

So they's definitely one home owner couple I reckon, wot's pretty happy house prices have gone up - 'N not down.

Wif tha fact they've gone up, genuinely seemin' (ta me at least) ta have genuinely made their financial situation better than if they woz tenants.

Wot would be tha situation if they woz tenants? (In similar circumstances).

Dunno. But it don't sound too flash ta me? (Unless of course, they'd invested wisely in tha stock markets and/or some such in tha interim I 'spose?)
If everyone chose to not buy a house, then the government would have to pay additional rent assistance for pensioners, in fact everyone on welfare, and they would have to provide a lot more public housing. I doubt that they really want either of those two responsibilities and costs.

Not sure if everyone is aware of this but when renters are receiving welfare they get extra in rent allowance to try to even things out with home owners, who don't receive rent assistance. Even couples receiving family allowance receive a rent allowance if they don't own a house. Collectively non-home ownership is a huge cost for the federal government.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Trollie
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Chris
8 Jan 2017, 04:38 PM
you just live in until the day you die
Well, I think it's safe to say we all live until the day we die.
Chris
8 Jan 2017, 04:38 PM
no leveraging off it, no reverse mortgages etc just live in it until they bury you do you die a millionaire?
No one dies a millionaire, but the kids who inherit it will for sure.
Chris
8 Jan 2017, 05:08 PM
My arguement is based on the falsities surrounding the idea you are richer because your PPOR you OO goes up in value, this is simply not true while you are living in it.
Dingus, if your net worth goes up you are richer for it.
Edited by Trollie, 8 Jan 2017, 06:39 PM.
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