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On investing to accumulate

Discussion in 'Personal' started by Duke of York, Feb 20, 2020.

  1. Duke of York

    Duke of York Star commenter

    The phrase invest to acculumate has been around all my life and I can cite instances where it served me well, from the earliest examples when I bought a season ticket to reduce my expenditure on commuting, to buying a house, so that one day I would be able to live rent-free and to the time I was able to use the equity in my property to invest in a business, from which I would be the sole recipient of the profits of my labour.

    Investing to accumulate though has meant many things throughout history. I was intriged when I read James Clavell's Tai Pan novel as a youngster, in the notion of the broken token thing being a Chinese tradition of investing for the future as a way of trading favours that would need to be hounoured generations later on fear of death if the favours hadn't been returned.

    I confess I know nothing more about this than I read in the novel, but nobody, let alone a Chinaman has said it was total b.ollox, so it may well be true.

    I hear stories all the time about third world countries paying to have their children educated in the hope it might be the way of releasing them from poverty and I'm trying to get my head around what happened after 1979, when British people totally lost the plot; and more importantly, how they came to lose it.

    To get to the point, I was fortunate enough to be brought into a world at a time when Britain was investing in the future of all its citizens and as a result was able to do better than my old man did and thereby be able to accumulate enough to invest further.

    What changed it all? I have my own views, based on the history I lived through and my opinions, but I'd like to hear from others why they think their children have to pay for the education my generation never had to and why their children are being excluded from being able to afford to own a home of their own.
  2. LondonCanary

    LondonCanary Star commenter

    The great majority of your generation didn't get a university education, just paid for a minority to have the benefits. .
    Your generation bought all the property they could and object to anyone wanting to build more homes near them l.
    needabreak and ajrowing like this.
  3. Duke of York

    Duke of York Star commenter

    I'd be fascinated to learn how you imagine my supposedly illiterate generation managed to accumulate the wealth to buy all the property. It all costs money that has to be earned you know.
    monicabilongame likes this.
  4. lanokia

    lanokia Star commenter

    not having a university education doesn't equal illiterate.
    needabreak and Kandahar like this.
  5. grumbleweed

    grumbleweed Lead commenter

    Property is relatively so much more expensive, even in my buying lifetime. Our first house,2 bed semi cost less than 3 times my husband's annual salary. Even 3 times my current salary full time equivalent wouldn't buy a one bed flat in the same place.
    People possibly travelled less to work and had fewer holidays. As a child we had a holiday every 4 years which my parents saved for. Many people didn't run a car and public transport was cheaper. People lived nearer to work. No internet, Netflix, mobiles. People made clothes and repaired them rather than throwing away.
    There are many reasons why that generation could afford their own homes, or prioritised it in their lives.
  6. burajda

    burajda Star commenter

    Getting to be Financially Independent usually means spending less rather than investing more.
    needabreak likes this.
  7. sunshineneeded

    sunshineneeded Star commenter

    @grumbleweed, I agree with you. Our first house was also way less than 3 times our (joint) salaries - I worked part time in those days. I walked to school; my husband drove our ancient car the couple of miles to work. When the children were born, holidays were in very low rent caravans at the coast. Days out were trips to parks, the seaside or free museums, etc - and we always took a picnic. We never threw food away (I still don't) - the Sunday joint was served cold with bubble and squeak on Monday and leftovers made into a stew or casserole the next day. We were a very thrifty generation!
    stopwatch likes this.
  8. magic surf bus

    magic surf bus Star commenter

    The average salary has only just recovered to the point where it exceeds the average salary in 2008, and we wonder where all the money's gone.

    Putting half of 18 year olds through University and charging them for it, economic slump, the post-crash increase in buy to let, and zero hours contracts must have something to do with all this.
  9. Mangleworzle

    Mangleworzle Star commenter

    It's difficult to compare such things as relative prices of many things have changed significantly.

    Travel abroad is a lot cheaper than it was for instance, so for youngsters today a flight to Europe, Airbnb and eating out can be cheaper than the equivalent in the UK.

    The cost of food in particular has dropped significantly, or at least if you cook from scratch it has. We cook from ingredients each day still and eat really well for a smaller proportion of our income than at any time in my life. Eating out and takeaways have become far more prevalent than they ever used to be and ready-meals too.

    Then again we had an incentive to buy a house as they were within our reach, today for many young people it will never happen without a significant inheritance or gifted large deposit. If they try to save a deposit the house price just runs away from them faster than they can save.

    While I agree that the idea of scrimping and saving is looked down upon in favour of enjoying the day, there isn't the same long term reward for saving in terms of owning a property.
  10. Duke of York

    Duke of York Star commenter

    I did say supposedly illiterate. I was making the point in reply to Madge, that although a university education wasn't universally available to my generation, we never needed one to progress and do very well for ourselves.

    It raises the question of whether education in its modern form, actually has the benefits it's claimed to have, or whether youngsters have been succerred into starting out their working life carrying an unneccessary debt, when they might have used their university years to get themselves a better start in life by learning valuable skills that university can't teach.

    The system has become weighted to exclude talented people who lack that piece of paper. I make again the point I previously made in another post, that John Harrison, a self-educated carpenter and clockmaker, invented the marine chronomer which made it possible to calculate londitude while at sea, something that Newton had claimed was an impossibility.

    British history is littered with similar talented individuals. I'm not saying that John Harrison wouldn't have been able to alter the course of history if he'd been to university, just that he didn't need to. These days he'd need a degree before being able to apply for a job sweeping the workshop floor.
  11. will_osweighton

    will_osweighton Occasional commenter

    Look at the change in net migration into the country since the 60s/70s and particularly since our accession to the EU.

    All those people have to live somewhere and property prices are influenced by supply and demand, like any other commodity.
  12. afterdark

    afterdark Lead commenter

    Thatcher. She poisoned the minds of generations. She started the selling of our social housing. Greed blinds people to mess it makes. She deregulated the banks leading the way the crashes of 87 and 07/8. She spearheaded the illegal attacks union members. Laws, that were hard fought for were undone.
  13. LondonCanary

    LondonCanary Star commenter

    How did Thatcher introduce tuition fees or make it more difficult to buy a house?
    border_walker likes this.
  14. emerald52

    emerald52 Star commenter

    By selling council houses and mot allowing local authorities to put the money raised into building more council homes.
  15. LondonCanary

    LondonCanary Star commenter

    How did that make it more difficult to buy a house?
    border_walker likes this.
  16. sbkrobson

    sbkrobson Star commenter

    The empowerment of the haves to perpetuate the have-nots.
    It was always so, but with population growth the sheer bulk of have-nots threatning to make good requires a more incisive form of greed at the top.

    Sits back. Slurps gin.
  17. Duke of York

    Duke of York Star commenter

    Thatcherite policies certainly allowed the wealthy to rip the poor off, but I don't think that's the entire story. Prior to the Thatcher years, although the opportunity to get into debt existed, the uptake among households was relatively low. People were more likely to save for a deposit on a home and were wary of credit cards.

    This ONS report tells us that personal debt has been increasing rapidly, particularly among those who can least afford to repay it. "The least wealthy 50% of households held 36% of total household debt in April 2016 to March 2018, but whilst they held less debt their total debt was a relatively large proportion of their total wealth, with less wealthy households being more likely to have financial debt."

    What I'm really interested in is what changed people's attitudes to make debt an acceptable thing, when previously the general feeling was to invest for the longer-term. Nobody was forced into unneccessary debt, but they seem to have acquired it by having no long-term plan to become better off, which is a cultural change.
  18. border_walker

    border_walker Lead commenter

    Possibly switch from cash to cashless did not help
  19. LondonCanary

    LondonCanary Star commenter

    People wanted to buy houses so they had to borrow money.
    (Are we not bothering with the OP now)
  20. Duke of York

    Duke of York Star commenter

    It might benefit you if you ceased trolling and read the OP.

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