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article in the guardian - Do you feel rich
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daveherne


Posts: 212
Joined: Jul 2012
Post: #1
15-09-2012 08:30 AM

What do you HOP people think about this? I certainly don't feel rich!


http://www.guardian.co.uk/money/2012/sep...-rich-poor

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robin orton


Posts: 716
Joined: Feb 2009
Post: #2
15-09-2012 10:06 AM

Interesting that they didn't interview any retired people.

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bensonby


Posts: 32
Joined: Dec 2010
Post: #3
16-09-2012 01:35 PM

I suppose because they are as variable as any other group of people: you have those pensioner who are rather well-off, having paid off their mortgage some time before they retired, have a lifetime of savings and have an occupational pension from a good job as well as the state pension on top of which they have very little outgoings (no housing costs etc). On the other end of the scale you'll have those who have suffered some sort of calamaty in their lives and have very very little.


Regarding the article: most wealth is rather relative and, therefore, very hard to measure. Someone on £25k a year but paying 90% of it into childcare is poor - someone on £25k a year but lives rent-free with their parents is really rather wealthy.

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Triangle


Posts: 133
Joined: May 2007
Post: #4
17-09-2012 02:42 PM

As Mr Macawber said:

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Nothing has changed. Regardless of what your income is, it's your outgoings which determine whether you feel rich or poor.

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robin orton


Posts: 716
Joined: Feb 2009
Post: #5
17-09-2012 04:04 PM

Quote:
Regardless of what your income is, it's your outgoings which determine whether you feel rich or poor.

And your capital, if any.

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Triangle


Posts: 133
Joined: May 2007
Post: #6
18-09-2012 09:20 AM

True. You can be capital rich and income poor.

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robin orton


Posts: 716
Joined: Feb 2009
Post: #7
18-09-2012 09:42 AM

That's one of the reasons I mentioned retired people, many of whom are probably in that position.

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Cellar Door


Posts: 356
Joined: Oct 2007
Post: #8
18-09-2012 11:58 AM

Thanks daveherne for your original post. I have come back to the article quite a few times and printed it off. It is a curious thing about what makes us feel rich or poor. And how that has changed in my own life. Sometimes from my circumstances, sometimes from a change in thinking.

The first couple of pages of comments afterwards were also thought provoking reading. (After that it turns into a bit of a bun fight between Guardian readers. As it sometimes does and can be quite entertaining, on occasion.)

The pictures were very good. My eye kept on darting to them as I read each piece.

Especially the picture (by Richard Saker) of the supermarket checkout worker, aged 50, from Derbyshire. Combined with her comments, they were so overwhelming. My heart broke reading her first couple of sentences…

"It's payday tomorrow, and I'm rich for a few hours. Then that's it.”

It felt like she was hopelessly trapped in her life. And I was quite despondent until the last sentence, where she mentions her dream of working in conservation.

The businesswoman, aged 45, from London certainly raised a lot of comment. But I think she was probably slotted into the article for precisely that purpose. I chuckled at someone’s comment that she made a really good baddy.

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daveherne


Posts: 212
Joined: Jul 2012
Post: #9
18-09-2012 07:49 PM

no worries Cellar Door, I like that kind of article! Think there are lot of people in the middle, probably like a lot of young (ish) families I think move to HOP - a bit like us. Decent income but huge expenses, but although we might moan we really don't have it so bad!

This post was last modified: 18-09-2012 07:49 PM by daveherne.

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ryananglem


Posts: 167
Joined: Apr 2009
Post: #10
19-09-2012 08:29 AM

It was a thought provoking article. I remember going down a zinc mine in Bolivia, where men work very hard in terrible conditions for a wage that comparitively is one of the better jobs to have in the area, but in reality (even for Bolivia) is a pitance. As a result it gives them an average life expectancy of something like 55. I thought at the time that I would never moan about my life or work conditions again - but sometimes you get wrapped up in your life and your own little issues and forget about the bigger picture.

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Medley


Posts: 87
Joined: Nov 2011
Post: #11
20-09-2012 08:57 AM

For me any comparison with miners in Bolivia is utterly meaningless. I make no pretence to understand what their lives are really like, or that there is any meaningful comparison between my income or lifestyle and theirs.

Having said that, it's important to recognise when you're damn lucky - and I am. Then someone drives past in a Porsche and you get jealous! In other words, it's all relative - but important to try to keep perspective.

To me the reality of Britain is that it is increasingly stratified, with a sufficiency of money counting for more than it used to in terms of access to education, housing, life chances and ability to provide for the next generation (although not so much, thankfully, in terms of access to healthcare). We're lucky enough to own several properties and the divide that is opening up between us and other friends who own property at sensible salary multiples and those who are still renting is just one visible part of this effect.

My father went to university with grammar school boys on scholarships. I'm no fan of damning the people who don't pass the 11+, but I can't help thinking that journey - using brains and hard academic work as a route up - is harder to make nowadays if you don't have money. I was in the last year that didn't pay tuition fees. If I have children, I know we'll have substantial bills to pay for them through university. Hence the property ownership need. And so round we go, somewhat back to the 19th century despite the vast sums the state spends in various ways supposedly redistributing income (but actually just redistributing money, rather than the ability to earn income).

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fernglory


Posts: 6
Joined: Sep 2012
Post: #12
20-09-2012 10:05 PM

I get really upset when I hear about multiple property ownerships - we can't buy property despite having save for a long time because the buy-to-let market killed the starter home. So I have little sympathy for the people claiming to feel poor over multiple mortgage responsibilities.

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Medley


Posts: 87
Joined: Nov 2011
Post: #13
21-09-2012 10:32 AM

Fernglory, that's part of what I mean - the gap widening. What's particularly harsh at the moment is that the rules of deposits have lurched back to the 1960s after house price rises partly fuelled by up to and beyond 100% mortgages! And there hasn't, especially in London, been any significant decrease in house prices.

But it makes no difference to you whether I own one or ten properties - it wouldn't make them any more or less affordable.

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fernglory


Posts: 6
Joined: Sep 2012
Post: #14
21-09-2012 03:19 PM

Sorry, I didn't mean to aim that at anyone personally! I do think there is a causal relationship - surely one person owning ten properties in an area takes those homes off the market for other buyers and pushes up the price of those remaining, which has a knock-on effect for deposit requirements and erodes occupant investment in the property/community.

It's a complicated issue. But being subject to the whims of the UK rental market (short-term leases, year-on-year rent hikes, little guarantee of stability) is another of those things that can make people feel poor, due to a perceived lack of control, regardless of the sums involved.

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Medley


Posts: 87
Joined: Nov 2011
Post: #15
21-09-2012 04:05 PM

Don't worry - not taking it personally, was hoping you weren't either.

Perhaps if it was as many as ten in one area that might have an effect. But my four properties are spread over London and outside it. I'm not sure I'm any more or less likely to sell and therefore release to market than anyone owning privately - my experience of SE22 is that people buying there tend to stick around, but that's just anecdote admittedly.

And on occupant investment, the two flats I rent out were never in better condition than when I got them ready to market - nicer than when I lived in them!

I totally agree about the whims of the UK rental market. My parents rented in London in the '60s (this being the time when you could afford a roomy flat on the edge of Hampstead on the salaries of a comp. teacher and a junior lecturer) and their rent was agreed for TEN YEARS!! Germany has far more renters for lots of reasons - but one of the causes/effects is that renters have a much better deal there. Ironically you do get property being kept off the rental market that way - people sometimes rent more than one place because it's cheap to do so.

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Cellar Door


Posts: 356
Joined: Oct 2007
Post: #16
22-09-2012 04:48 PM

Hi fernglory and Medley,

Very interesting conversation to follow with you both about property ownership.
You may be interested, or indeed already following, this week’s Economist Debate.

The motion is:
“Should home-ownership be discouraged?”

The Moderator, commenced with his opening remarks, last Wednesday with this:
“Does home-ownership have net societal benefits or does it mostly amplify nasty economic shocks?”


Defending the motion, Andrew Oswald, Professor of Economics at the University of Warwick, has posted his opening statement with this:
“Home-ownership has reached inefficiently high levels; it has become a distorting totem; modern generations have been brainwashed to believe there is something wrong with them if they rent. We do not want developing countries to mimic the West's post-war obsession with owner-occupation.”


Against the motion, Richard K. Green, Director of the University of Southern California Lusk Centre for Real Estate, in his opening statement has beautifully commenced with supplying points that mostly don’t support his opposition to the motion!

But, I suspect, Mr Green is cunningly restructuring the question by finishing with:
“…this is not an argument against home-owning, but an argument against excessive leverage.”

I am looking forward to reading their rebuttals on Monday morning.


The featured guest Edward Glaeser (Fred and Eleanor Glimp Professor of Economics, Harvard University) posted some well researched and thought provoking observations yesterday. Naturally, Professor Glaeser cannot take sides.

And coming back to The Guardian article I was struck by something Professor Glaeser wrote:
“…owners are quite different people from renters, who are likely to save more…”

The golden thread, which appeared to me to tie all the people that The Guardian interviewed was “ready cash”. Dough. Mula. Call it what you will. It didn’t matter if they owned their own home or rented - if there wasn’t available cash until the next payday then they felt poor.

The managing director, 34, from London (with no savings) summed it up nicely by telling The Guardian that they feel, “Rich on paper – but in reality we’re poor.” That is despite owning a six-bedroom house and renting out a flat worth £500,000.

I know how they feel. I can have assets (not much, certainly no property, yet many lovely nick-nacks) but if I’ve only got 10 quid in my bank and a week before payday – I feel poor. No matter how many, or how pretty, my lovely precious bits-and-bobs that surround me are.

Anyway, here is the link to this week’s Economist Debate if it is of any interest.

Right now, of those viewing this debate, only 43% have voted to agree with the motion. But of course, that can wildly swing after the closing statements. The comments from the floor are always a must and a delight to read.

fernglory, I feel your frustration about having saved for a long time and still not being able to buy. One bit of background reading I found that may be of interest to you contains something that, in the short to medium term, might be an option? I’ve lifted this paragraph just below from Housing the “rentysomethings”.

“A group that Harry Downes of Fizzy Living, a residential-property firm, calls “the rentysomethings” may force change. Aged between 25 and 40, and earning £25,000 ($39,000) to 30,000 a year, they are too rich for subsidised housing but too poor to come up with the deposit (now usually 20%) on a house. They are uninspired by the rental homes on offer, sick of being turfed out at a moment's notice and likely to be renting for quite a while. What they want, Mr Downes thinks, is a place—perhaps to share—that is trendy, inexpensive and easy to run, with someone on hand to fix leaky taps, a fast train or Tube to work, a short, safe walk to the station, and a lively young community.”

I wish I was young again after reading about that! That sounds quite exciting. Evidently, one place has already opened with 75 flats in East London. And Epsom with another place coming later with 63 new units. That could be where the money is if you are an investor. (You heard it right here on SE23.com!)


Oh, BTW, different subject but one of my favourite debates, a few years ago, was this motion:

“If the promise of technology is to simplify our lives, it is failing.”

That was 2008. And would be quite interesting to be debated again just 4 years later.

Now then, I need to get outside while the sun is still shining on this gorgeous September day.

Good luck and enjoy the links, if you have the time!

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brian


Posts: 2,002
Joined: Apr 2005
Post: #17
23-09-2012 06:26 PM

Renting is fine until you retire and have very little income coming in ( does not apply to former state employed gold plated pensions ).

Paying for rent out of a pension does not leave you much , if anything , to live on.

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Medley


Posts: 87
Joined: Nov 2011
Post: #18
25-09-2012 10:19 AM

Rentysomethings is about right.

That's what I would be were it not for a previous much more lucrative job, a partner who earns far more than I do and an inheritance.

It's not just about those earning well above average earnings not being able to get a place of their own, although there is that; it's also about those on below average earnings.

Another effect of high house prices combining with house ownership being desirable for various reasons is of course that both partners need to keep working.

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IWereAbsolutelyFuming


Posts: 531
Joined: Oct 2007
Post: #19
25-09-2012 10:27 AM

Quote:
Renting is fine until you retire


Luckily that wont be an issue for most of us...and not because we'll all be home-owners...

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