Rats version involved putting consumables on the mortgage and letting the loan roll on to full term whilst you enjoy the ever ballooning 'equity'. You've come up with a different scenario
Isn't it wonderful that housing wealth gives homeowners so many scenarios and options to choose from.
We have a wide range of available methods for using our wealth, as I and others have explained.
Chris
10 Jul 2017, 06:48 PM
If person B doesn't leverage off the extra $200k, they don't undertake to draw off the extra $200k or get a form of credit from if it, they simple live in the house and pay the loan, how are they wealthier?
LOL, so you're saying if they choose not to use their wealth then the wealth is of no use.
Sure thing Chris. And if I won the lotto I wouldn't be any wealthier. If I choose to leave my money in the bank and not spend it, how am I wealthier?
Isn't it wonderful that housing wealth gives homeowners so many scenarios and options to choose from.
We have a wide range of available methods for using our wealth, as I and others have explained. LOL, so you're saying if they choose not to use their wealth then the wealth is of no use.
Sure thing Chris. And if I won the lotto I wouldn't be any wealthier. If I choose to leave my money in the bank and not spend it, how am I wealthier?
As explained, the vast MAJORITY of homeowners do none of these even though they have an option to. It has been like that since the boom started in 1996.
Your example of winning tattslotto shows how poor your ability to comprehend basic concepts is also somewhat retarded. When you win tattslotto the money is you put in the bank is realised, its tangible and can be spent. It bares no resemblance to money you theoretical have based on the value of an asset you really on for what is a basic human need, shelter. Are you so challenged you can't understand the difference?
When you win tattslotto the money is you put in the bank is realised, its tangible and can be spent
Equity is also tangible and can be spent. I and others have described multiple methods of doing so. And of course people can choose to not use their equity, or not use their lotto winnings. But that doesn't make the wealth any less real. Your thinking is very limited Chris, so it's probably best if you just rent forever.
Equity is also tangible and can be spent. I and others have described multiple methods of doing so. And of course people can choose to not use their equity, or not use their lotto winnings. But that doesn't make the wealth any less real. Your thinking is very limited Chris, so it's probably best if you just rent forever.
Winning from tattslotto are not theoretical values based on an asset, they are completely different things you fool. $10mil in lotto is $10mil realised in your bank account, no matter what happens it will never decline in value unless you spend it.
Equity however is based on a theoretical value based on marker conditions at the time, you could have $8mil debt and have prooety worth $10 mil today and in 12 months be worth $5mil but with $8mil debt, that can't happen with lotto.
For a PPOR the value can't be realised without taking on debt or raising your level of debt, this debt is then subject to the theoretical value of equity, that theoretical value could fall rendering you less wealthy or broke.
That can't occur to $10mil from lotto sitting in a savings account but again your simple mind can't comprehend what are extremely simple financial concepts.
As per my OP if someone sells their home they can realise the total net value but this would leave the inevitable conundrum of where do they live?
$10mil in lotto is $10mil realised in your bank account, no matter what happens it will never decline in value unless you spend it.
Money in a bank account is a string of digits stored electronically on a hard drive. It is completely theoretical and could vanish altogether if the bank collapses, or society collapses, or a government confiscates it.
But the homeower will still own his home if the bank collapses. And the home could potentially be defended in a collapse of society too.
Quote:
For a PPOR the value can't be realised without...
We've shown you at least five different ways the value can be realised, and they don't all involve taking on more debt.
Quote:
if someone sells their home they can realise the total net value but this would leave the inevitable conundrum of where do they live
1. Buy a smaller/cheaper home in the same area 2. Buy a similar sized but cheaper home in a rural area, smaller town, less desirable suburb etc. 3. Rent 4. Move in with family 5. Buy a camper van and hit the road 6. Yacht or houseboat 7. Move overseas
Plenty of options there. Selling a $2M home would allow retirees to live a pretty comfortable life just traveling around, or downsizing to a small unit.
Even better if it has doubled to $4M of course, because rising property values means more wealth.
But you won't have that option Chris, because you will have no home to sell, and you'll still be paying rent, so you'll have to keep working.
But you'll probably still tell yourself you're just as wealthy as those retirees who are cruising around enjoying their profits.
Money in a bank account is a string of digits stored electronically on a hard drive. It is completely theoretical and could vanish altogether if the bank collapses, or society collapses, or a government confiscates it.
But the homeower will still own his home if the bank collapses. And the home could potentially be defended in a collapse of society
Glad your sticking with logical realistic arguement when debating these matters. A collapse in house prices is a ridiculous notion to you but you'll entertain an apocalypse?! What a nutter
Rat
10 Jul 2017, 09:06 PM
1. Buy a smaller/cheaper home in the same area 2. Buy a similar sized but cheaper home in a rural area, smaller town, less desirable suburb etc. 3. Rent 4. Move in with family 5. Buy a camper van and hit the road 6. Yacht or houseboat 7. Move overseas
All options are available to renters who save diligently and invest in other areas outside your precious boxes.
Rat
10 Jul 2017, 09:06 PM
Plenty of options there. Selling a $2M home would allow retirees to live a pretty comfortable life just traveling around, or downsizing to a small unit.
Even better if it has doubled to $4M of course, because rising property values means more wealth.
But you won't have that option Chris, because you will have no home to sell, and you'll still be paying rent, so you'll have to keep working.
But you'll probably still tell yourself you're just as wealthy as those retirees who are cruising around enjoying their profits.
Unless that $2mil home drops under $1mil and you still owe $600k to the bank then you are effectively financially farked. But here I am suggesting prices could fall dramatically which is absurd, I should be worrying about the impending zombie apocalypse!
Having a home with a mortgage could be one of the greatest liabilities an individual can take on, you are dumber than you sound if you can't comprehend this.
I look fwd to more of your hyperbolic bull rhetoric in response.
Rat
10 Jul 2017, 09:06 PM
We've shown you at least five different ways the value can be realised, and they don't all involve taking on more se, because rising property values means more wealth.
Most of them require the home owner to take on more debt
The statistics show that most renters don't manage to achieve the same levels of wealth as homeowners.
The statistics include the value of the PPOR that is not tangible wealth if you simply live in it and don't leverage of it, reverse mortgage or draw on equity which as we've discussed the the majority do none of this.
Rat
10 Jul 2017, 09:37 PM
rise.
discussing what happens when house prices rise.[quote
This conversation was never exclusively about house price rises, where did you get that notion?
Rat
10 Jul 2017, 09:37 PM
Out of the four options I suggested, two involved more debt and two didn't.
You said there were 5 options now your saying there's only four.
Are you sure you know what's actually happening or has your impotent intellect hindered you once again?
Money in a bank account is a string of digits stored electronically on a hard drive. It is completely theoretical and could vanish altogether if the bank collapses, or society collapses, or a government confiscates it.
But the homeower will still own his home if the bank collapses. And the home could potentially be defended in a collapse of society too.
If society collapses your House is meaningless.....
I doubt you would have the Skills or the Resources to defend it....
Some soft Property Investor like you who spends all his time on a Forum would be easy pickings.....The weak go early......
But I bet I can take those Digits elsewhere........To a safer jurisdiction....Can you do that with your house....
Here's a good read from the Russian perspective when the USSR collapsed.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy