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Topic: Debt!!!!

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  1. #1
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    Debt!!!!

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    This morning, the Chancellor informed the British people that debt here, is at historically low levels.

    Phew!!!! For a moment there, I was under the misunderstanding that he and Gordon were a pair of prize pricks.

    So no worries now, thank goodness.

  2. #2

    Re: Debt!!!!

    I guess that means it's time for your government to spend.
    Rob

  3. #3
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    Re: Debt!!!!

    Quote Originally Posted by robh View Post
    I guess that means it's time for your government to spend.
    Rob

    What government would that be Rob?

  4. #4

    Re: Debt!!!!

    It applies to just about every government, I guess! I hear the same song here in Canada.
    Their logic seems to go like this: "We have reduced our debt to _____ (*pat each other on the back*) no thanks to that irresponsible previous government. So, what should we spend the extra money on?"

    Rob

  5. #5
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    Re: Debt!!!!

    Well, what would you like to spend the extra money on Rob?

    You understand that our government doesn't have any money Rob? You do realize that Rob? Right? You understand irony Rob? You're Canadian right?



  6. #6

    Re: Debt!!!!

    Quote Originally Posted by PaulR View Post
    Well, what would you like to spend the extra money on Rob?

    You understand that our government doesn't have any money Rob? You do realize that Rob? Right? You understand irony Rob? You're Canadian right?


    Well, I am a Canadian and I moved to the US 10 years ago so I would make more money. Now my friends and even my oldest son who still lives in Canada, are making way more money than I am. I just can't seem to get it right! I rent my house in Canada to my son for $800 a month and pay a $3,000 a month for a mortgage in California. C'est la vie!

  7. #7
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    Re: Debt!!!!

    Quote Originally Posted by Kaatza Music View Post
    Well, I am a Canadian and I moved to the US 10 years ago so I would make more money. Now my friends and even my oldest son who still lives in Canada, are making way more money than I am. I just can't seem to get it right! I rent my house in Canada to my son for $800 a month and pay a $3,000 a month for a mortgage in California. C'est la vie!
    I understand and if I may so, I like the way you put this. Here in the town I am temporarily finding myself, a beach hut was recently sold for $188,000 (approx rate ex.). About 14' by 14' and rotting out.

    $3000 a month is approx £1500 ( I have to convert or it makes no sense) - that is a fairly sizable amount (dependent on income of course). What I mean by that, is if monthly income equals $20,000 - then it's not really anything. If monthly income equals $3500 - then it's a problem. I'm sure you'll get it right in the end though.

    The way I see mortgages is probably out of kilter these days. I don't have one myself and I don't rent - but if I did I would probably look at the market value of the house I was mortgaging/renting and take a ball-park 5% investment figure as a guide.
    Say a place is worth $350,000 (which is not a lot) - then 5% of that is $17,500 which is approx. $1450 a month. That would be a fair rent I would guess. Compare that to whatever the mortgage would be on the same place and you can draw your own conclusions. Simplistic I know. One of the slight complications of rent versus mortgage is of course with a mortgage it's interest PLUS capital. Not applicable obviously with rental. Plus when you own a place - repairs etc.

    The problem in this country is now beginning to really get going - very predictable of course. The trouble with people here is - they don't understand finances in the first place - and because they cannot differentiate between needs and wants - what happens next is - the actual mortgage becomes the thin end of the debt wedge. The mortgage always gets blamed - but the reality is usually quite different.
    We now have people screaming for more rate cuts. They have no conception of inflation quite conveniently - and why savers should subsidize their pathetic mortgages, cars, tv's, screaming kids, restaurant bills, more cars, more tv's, sky television and even more ongong debt - I really have no idea.

    Why has housing become yet another nightmare here? In a couple of words - PENSIONS and Gordon Brown.

    Anyway - good luck and I hope things come good soon.

  8. #8

    Re: Debt!!!!

    Well basically, I live in a small town in the outbacks of Northern California in the Sierra Nevada Mountains. Don't get me wrong, it is absolutely beautiful here and I am only 45 minutes from Yosemite, 30 minutes from Big Trees National Park and there are 4 decent lakes within a few minutes drive, so in most ways, it is paradise. I paid $375,000 for a decent 20 year old 1800 sq. ft. 3 bedroom, 2 1/2 bath house on 1/3 acre lot. That accounts for my $2,900 per month mortgage.

    But I work all over Northern California, mostly in the Bay Area, I-80 corridor and Central Valley, so I drive anywhere from 5 - 7 hours a day, 2 or 3 days a week, depending on traffic. Thank God I get paid for mileage as we are almost $4.00/gallon now for the ~~~~tiest grade of gasoline. Fortunately I work out of a home office on the days I don't have to travel, so that helps.

    I originally lived in Davis, a university town on the I-80 corridor near Sacramento. But when my wife and I decided to buy a house, the best we could do there was $500,000 plus for a 40 year old, 1200 sq. ft. "fixer upper" which in real estate lingo means bulldozer material or due for at least a serious upgrade which would cost another 100k - 200k. Something equivalent to what I bought in here in Sonora, was going for $700,000. That would have given me close to a $6,000 a month mortgage, which is my gross income before taxes. That wouldn't work very well would it?

    To put things in perspective, my father had our dream house built in 1960, in a small town in British Columbia. The lot cost him $150. The total cost to build the house was about $10k. My father made about $1,000 per month gross income at the time. So his total cost to build his dream house was 10 months gross income in 1960. The house I bought two years ago in Sonora, CA cost me about 62.5 months gross income. so my cost to buy a house is 625% higher than my father's if you tie it to gross income. So am I doing better than my parents? Not by a long shot!

  9. #9
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    Re: Debt!!!!

    Quote Originally Posted by Kaatza Music View Post
    So am I doing better than my parents? Not by a long shot!
    I don't think any of us are in terms of the cost of housing - or anything else for that matter.

    I think petrol/diesel here is around $15 a gallon right now.

    If I lived in that area I would like to live around where they filmed The Birds or The Fog if it hasn't changed too much.

  10. #10

    Re: Debt!!!!

    We bought our house here in Cornwall for £60,000 ($120 000?) in 1982 which was the three times what I earned a year. Its now worth over ten times that more like 12 times my earnings now.

    I couldnt afford to buy here now, I dont understand who could. I'm a professional but who earns 4 to 5 times as much as me right out in the country.

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