Anyone concerned by interest rates rising re mortgage?

[Justin Passing]

Find it quite funny the ones in here boasting they and wife's have maximum which was 5ok each . And saying about getting the odd £££ here and there. Whilst in mean time the 100k I invested in a house over passed 9 years became 200k whilst getting getting about 70k in rent with minimal outlay . Mind I could have won the million at millions to one chance

just doodlin...:
Your return on the property is 8% pa over the 9 years, or 11.7% if you include the rents.
That ties up with my exp, ( without improvements), except HMOs which have got more.
Inflation since then is about 38% so you done good.
Currently of course, your property price return is maybe 4%, and with rent of 5.5% you're beating the bank but not inflation.

A simple tech index fund like the NASDAQ-100 Technology Sector Index (NDXT) would have won you 500% or so over 9 years. A savvy adviser would have been more active than that and done a bit better. Many are lazy so far too conservative.

Premium bonds are for the potential thrill of it of course not income.

 

[JohnD]

A savvy adviser would have been more active than that and done a bit better.

Or worse.

Most active funds, over time, do worse than the index (and charge more).

You don't find out who the lucky ones are until afterwards.

Like praising the winners after the race has been run.

 

[Harry Bloomfield]

£100,000 cash

At 20% inflation

Loses £20,000 of value per year.

This is not a "risk"

It's a certainty.

A calculation which ignores the interest the cash earns. My just short of 5%, makes up for that, to a large extent.

 

[SirGalahad]

just doodlin...:
Your return on the property is 8% pa over the 9 years, or 11.7% if you include the rents.
That ties up with my exp, ( without improvements), except HMOs which have got more.
Inflation since then is about 38% so you done good.
Currently of course, your property price return is maybe 4%, and with rent of 5.5% you're beating the bank but not inflation.

A simple tech index fund like the NASDAQ-100 Technology Sector Index (NDXT) would have won you 500% or so over 9 years. A savvy adviser would have been more active than that and done a bit better. Many are lazy so far too conservative.

Premium bonds are for the potential thrill of it of course not income.

Fair point but going forward next ten years can we get that return from the nasdaq vs property. Unless you see property prices cooling / falling.

Interesting.

 

[Ivor Windybottom]

One tiny example of how inflation fuels inflation.

I'm buying bricks for a building project. I will need more next year for another project.

Bricks are currently rising in price by more than the interest rate I'm getting on my savings.

I've bought the bricks I'll need this year, plus those I'll need next year, they'll sit around until needed.

Basically if you'll need something at some point in the future then buy it now instead of waiting, as the price may rise faster than your savings. My expectation of inflation means that my money is out of the bank and has been spent, which will fuel further inflation.

But... IF there's a recession then prices may fall. Nobody knows, there isn't a gamble-free option. I was also swung by the fact that one big delivery costs less than two small ones.

Interest rates should be higher than inflation, as they almost always were before 2000-ish, as things are you're a mug if you're not reckless.

 

[JohnD]

Fair point but going forward next ten years can we get that return from the nasdaq vs property. Unless you see property prices cooling / falling.

Interesting.

Commercial property has already fallen and is continuing to fall.

It is probably not sensible to assume that the price of housing will continue to grow faster than anything else for ever. That would mean the price of the smallest home approaching infinity.

We may need an economic miracle for home pricing to change. This is unthinkable but such things happen.

 

[diy_fun_uk]

Sunac said that home owners with a mortgage need to hold there nerve ref these massive hikes in repayments

Hold there nerve

Jeez us wept what a ladies Willy

What's the problem with his position on this? We're all in it together after all ...

 

[JohnD]

For some years it ran at 2.5% at less, and younger British people have less understanding of the damage it does.

https://www.bbc.co.uk/news/live/business-65653791

 

[Justin Passing]

Most active funds, over time, do worse than the index (and charge more).

I quoted an index, not a fund.
You need to learn the difference.
And you don't just leave it there.

Like praising the winners after the race has been run.

So you don't know which athlete is running faster, during the race.
God you must be thick. Of course you do.

You don't find out who the lucky ones are until afterwards.

That's what the losers always say - "It's all hindsight". Utter BS.
This is betting during the race, when you can see who's running fastest. Only muppets put their money in and walk away.

Gasser has done OK on his property, fine. It's not going to become worthless, fine.
Would you invest in domestic property right now? I doubt it.
Cab he get out quickly to go for something else - not very.
Anyone else remember people being in negative equity? 2-3 years running was it?
No, a bit more

As I'm playing with stocks right now, I noticed a warnng-off quote that 75% of private investors lose money.
That means 25% win.
So you get advice from someone in the 25% part. They do it for a job.

Here's a salient comment:

‘Unstoppable until they aren’t’: are tech market losses signs of a bust?

Apple is no longer the most valuable company, Meta took a $230bn hit, Amazon reported its first loss since 2015, but a slump ‘is a big question mark’

www.theguardian.com

As it says, bull runs tend to decelerate, - not collapse.
Here's another

My Meta shares are up 114%. Should I take profits or buy more?

Meta shares have soared in 2023 following AI enthusiasm and renewed focus on advertising. Gordon Best considers whether it is time to take profits. The post My Meta shares are up 114%. Should I take profits or buy more? appeared first on The Motley Fool UK.

uk.news.yahoo.com

So, if youre a casual observer, you can get on the bandwagon and grab some of it.
EG take a biggie, microsoft. There are more dramatic examples.
It jumped, everyone said "There's gonna be an AI BOOM" but since then it's gone up another 10%, in a month or so. That's a whole year's inflation, in a few weeks. No clairvoyance needed. As you can see, it's getting bouncy now, so when a rise seems to have stopped, pull out.
If you're watching it, you also profit from the falls if you can spot them, but that's my new and different game. You have to watch your hanging men and shooting stars, inverted hammers and bullish Haramis, or something like them, on the stock charts.

Several other stocks have done the same as microsoft so you can spread yourself between them.
I've been doing things something like that, or getting someone else to, all my life.

As I said, if you're a loser, you're one of the 75%, it is not just luck.

 

[mitch66]

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[mitch66]

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[JohnD]

A savvy adviser would have been more active than that and done a bit better.

Which is not the index fund.

You need to talk less garbage.

 

[Justin Passing]

Which is not the index fund.

You need to talk less garbage.

"The" index fund? There's only one?
Name it please.

Is there no beginning to this man's knowledge?

-

There's nothing special about "index" or "nasdaq", it's just an example of a basket of stocks. (Which can be in a S&S isa)
There are also groups of stock investments called "ETFs",
some of which give you price growth plus a divident payment.

I just plucked an unspecial one of those -
'Vanguard Global Equity Income' which shows a price increase of about 42% in the last 3 years and a dividend of 3.6%pa as well.
Its divis have been good for several years, but you can beat it by scanning down a list if you want to spot and hop about.

Your non-loser adviser will keep an eye on whatever you have and suggest changes when he thinks it's needed.. Right now for example the US market is looking too high, European and other zones including UK have better looking balance sheets.
There are complications of various fees. He evaluates. That way he more than pays for himself.

Of course if you want to say that's garbage you can put your money in the building society.
I don't know the figures exactly but you'd have got what, 8% in the last 3 years, total?
That makes you a loser.

A gobby one in some cases....


Incidentally
There is no financial advice here, but that NDXT fund will probably drop soon.

 

[Mottie]

I should move my money out of premium bonds really -wife and I have have max x 2 but returns are quite cr@p

With interest rates what they are now, if you each put your max pb holding into a one year fixed bond paying monthly interest, you’ll each get the equivalent of at least 9 x £25 premium bond prizes each and every month. Guaranteed for 12 months. Won’t be able to access your main funds for a year though so only okay if you are not likely to need it.

If you want instant access on the capital, you can still get the equivalent of 6 or 7 monthly £25 prizes each.

 

[Ivor Windybottom]

I get 3.75% instant access from Marcus. Pretty good, probably not the best rate, but hassle-free and I can move money in and out between this and a current account with another bank literally within seconds.

Most people do not get the average payout from Premium Bonds. It's the equivalent of buying lottery tickets with your interest every month. A few people do very well, most get little or nothing. They used to pay more than banks on average a couple of decades ago, and it was tax-free as it was a prize. It's still tax-free, but the amount paid into the prize fund is pretty rubbish now.