Do we moan too much about bailing out the banks?

Tim Robbins

Ok,
So here's a thought. The state pays about 80 billion to bail out the banks.
Say the state never recoups any of this and it is only people alive who now pay it. That's about 20,000 per capita.

I'd argue in the grand scheme of things that that's not's too much.

1. Anyone who bought property before 2000 has made way more than 20,000 on that property for doing nothing other than buying a property "at the right time".
2. Anyone who bought "at the wrong time" has arguably lost way more than 20,000.
3. Whether you bought at the wrong time or the right time, you'll be paying way more than 20,000 in interest.
4. If you didn't buy or never want to buy you'll be paying a lot more than 20,000 in rent.

So relatively speaking I don't think it's that much.

Another thing that really annoys me is that for all this mess as a society we haven't really changed. For example, Fingal CC have a development plan for 2011 to 2017. They are taking public submissions now and as usual the public are apathetic. There have very few submissions. And some of them are rants from people who haven't even bother reading the plan.

This means we'll keep making the same mistakes. The public should be demanding the highest standards so that when the council have to vote on things, the councillors will know they are being watched this time.

Instead all we are doing is coming up with pretty poor macro economic analysis and somehow deluding ourselves that some magic wand will fix everything.

Discuss...

Liam Byrne

Tim Robbins wrote: »

The state pays about 80 billion to bail out the banks.

3. Whether you bought at the wrong time or the right time, you'll be paying way more than 20,000 in interest.

I find it curious that you were detailed enough to include interest in the personal loan, but none on the 80 billion.....

Borrowing that 80 billion will cost, and it will also increase the interest on every other type of borrowing.

So while 80 billion divided by 4 million people (which includes kids, OAPs and unemployed) is indeed 20,000......it's not the full story.

And that's ignoring the fact that kinds and a lot of OAPs no longer "contribute", thereby passing that cost onto others.

Ireland's average workforce is about 2 million, rolling at either end as people graduate and retire.

So that would make 40,000 each.

In addition, people are already paying those different 20,000 amounts to greedy & corrupt banks and developers and other people who ensured that the prices were too high.....so you could easily argue that they're paying 10,000 too much because of the ridiculously inflated prices.

So the total cost per person of the boom and resulting bailout could equally "logically" be viewed at 50,000 plus interest.

And given that Greece is currently borrowing @ approximately 10% (Source : http://blog.taragana.com/business/2010/04/26/greece-sees-market-borrowing-costs-jump-despite-assurances-that-rescue-loans-will-come-soon-54156/) even if we were half of that (and therefore - say - double a "standard" interest rate) it will add significantly to the overall bill to the tune of 2 billion per annum, or another 1,000 a year - each! :mad:

So, over an average 35-year working cycle, every individual in this country could have paid a grand total of €85,000 for this madness! :mad:

Cookie_Monster

he may not be taking into account the above, but he was also ignoring the fact that we'll get most of it back, if not all + more with the various discounts and interest returns.

I didn't buy but have rented. But the 20k you imagine I have put into rent I have gotten a return on, ie a place to live. I could never afford another 20k on top of that to pay the state, and I could no longer afford to rent... leaves me needed a further bailout :D

Fighting Irish

Yes we do

At the moment people are bitching because banks won't give out loans/mortgages
Imagine back in the day of the celtic tiger the banks took the same approach, people would be blasting the banks.

The banks gave us what we wanted.

RichardAnd

Yes we do because that's what the Irish do. Listen to Liveline on any give day and you don't hear problems being discussed, you hear people whining over often absurd things.

Anyway, it's not the bank bailout that people should be really worried about, it's the fact that we're spending 5 euro for every 3 we bring in. If we weren't in such a frightening deficit, then NAMA wouldn't be so bad as we could pay it back over the next few years and possibly get some of the 80 billion back. The thing is, when cuts are made, people just think that it's the state putting bankers before people which would naturally grind gears when in actually fact, cuts are made because we don't have any money.

ardmacha

Anyone who bought property before 2000 has made way more than 20,000 on that property for doing nothing other than buying a property "at the right time".

Anyone who bought property before 2000 and sold in 2007 has made way more than 20,000 on that property for doing nothing other than buying a property "at the right time".

Fixed that for you.

Most people who bought property before 2000 did not profit in any way from the "boom" as they still live in their house. OK they had a few wage increases, but these are now long gone and they have to pay off the banks for those who showed bad judgement in the "boom".

Tim Robbins

Cookie_Monster wrote: »

he may not be taking into account the above, but he was also ignoring the fact that we'll get most of it back, if not all + more with the various discounts and interest returns.

I didn't buy but have rented. But the 20k you imagine I have put into rent I have gotten a return on, ie a place to live. I could never afford another 20k on top of that to pay the state, and I could no longer afford to rent... leaves me needed a further bailout :D

In our case, we are down 100K on what we paid for. We are also down one fulltime job.

However, we both got:
- 3 / 4s of our education for free. In other countries you wouldn't get this.
- Got jobs out of college and lived in an economy for 5+ years with low tax - i.e here. If you graduate now you probably have to emigrate.
- A nice tracker mortgage.

I am sick of listening to moaners who probably bought in 1991, 1981 or 1971 and despite the worst economic recession ever have still made a fortune on their property. I am also sick of these moaners because none of them ever do anything about it. Why don't they go and write a decent submission for the next draft development plan for their area. Or join a political party. Do something.

Yes, we may be handing a debt onto the next generation but show me one generation that didn't do that. We are also handing them much bigger problems. Climate change for example.

We are a nations of moaners. Not doers. Simple as.

douglashyde

And don't forget that alot of our highly educated young work force will not be paying tax in Ireland - because they wont live here.

Is it me - or is Ireland becoming a more and more depressing place to live in everyday!

RichardAnd

Tim Robbins wrote: »

However, we both got:
- 3 / 4s of our education for free. In other countries you wouldn't get this.
- Got jobs out of college and lived in an economy for 5+ years with low tax - i.e here. If you graduate now you probably have to emigrate.
- A nice tracker mortgage.

These are actually very good points but it reminds me of the saying "a loaf of bread is soon forgotten".

The reason I bolded that one line is because it's an over statements. Some graduates will have to emigrate to find work in what they graduated in, like construction, but if you're did computing or something similar you'll likely find a job. I did at least.

Liam Byrne

Cookie_Monster wrote: »

he may not be taking into account the above, but he was also ignoring the fact that we'll get most of it back, if not all + more with the various discounts and interest returns.

We might get something back, but how much and at what stage is pure guesswork. To get "most of it back", we'd have to pretty much have another boom.

NAMA is "banking" on this, of course, because otherwise we would have had "fire-sale" by the banks : the laws of supply and demand would have applied.

As for interest returns, or even capital returns......well, if a development company goes bankrupt, then that won't apply.

Like I said, proper,responsible evaluation involves looking at the worst-case scenario and seeing if that can be stomached.

I'll admit mine is the "worst case" scenario, but it's based on the facts, and it's both scary and sickening ! And it's a lot worse than 20,000 each!

The truth will lie somewhere in-between, but anyone who claims that it's 20,000 is pretty much - while maybe not actually there, in a plane to - cloud cuckoo land; even if you look solely at the "working population" it's immediately doubled (and then some, if FF don't get their act together and start stimulating jobs and making businesses viable again).

dirtyden

No we do not do enough compalining. We are as of yet not holding anyone accountable for making the lives of every citizen in this country more difficult.

Why are we bailing out the banks? Where is the benefit to us? Why bail out Anglo?


For all of the money we have given the banks what if any changes have been made?

Until the bankers who defrauded the state are held accountable and changes are made to the banking system I will whinge, not mere window dressing.

Tim Robbins

dirtyden wrote: »

No we do not do enough compalining. We are as of yet not holding anyone accountable for making the lives of every citizen in this country more difficult.

Why are we bailing out the banks? Where is the benefit to us? Why bail out Anglo?


For all of the money we have given the banks what if any changes have been made?

Until the bankers who defrauded the state are held accountable and changes are made to the banking system I will whinge, not mere window dressing.

Ok - I hear you moaning but what are you going to do about it?

Tim Robbins

ardmacha wrote: »

Anyone who bought property before 2000 and sold in 2007 has made way more than 20,000 on that property for doing nothing other than buying a property "at the right time".

Fixed that for you.

Most people who bought property before 2000 did not profit in any way from the "boom" as they still live in their house. OK they had a few wage increases, but these are now long gone and they have to pay off the banks for those who showed bad judgement in the "boom".

No you have made money even if you haven't sold. You have an asset that has gone way up in value.

dirtyden

Tim Robbins wrote: »

Ok - I hear you moaning but what are you going to do about it?

Ill exercise my civic duty at the polling both if I get a chance soon.

Do you think it was a reasonable course of action to out as much as 18 billion into anglo with no chance of return.

I am only asking the question as to why we are doing this. It is understandable to help BOI and maybe AIB to an extent as there is chance of some return, and it is possibly necessary for the state but the dead banks should have been let die.

Can you explain why we are shovelling money into Anglo, Irish Pernament etc.? Noone as yet had explained this logically to me anywhere.

dunsandin

Tim Robbins wrote: »

Ok - I hear you moaning but what are you going to do about it?

First Im going to qualify as an astronaut, then I will become taoiseach and change all the economic policies, then Im going to become an opthalmologist and a train driver.
Why do we the people have to DO somthing? I was under the foolish impression we had regulators and elected representatives for that sort of thing. I love this - "all ye do is moan" What else are we meant to do?? Storm the bastille??? Set up a guillotine?? Im too tired and I cant find my "storming the bastille"gloves. So, Im going to moan. It makes me feel better.

djpbarry

dunsandin wrote: »

Why do we the people have to DO somthing? I was under the foolish impression we had regulators and elected representatives for that sort of thing.

So we absolve ourselves of all responsibility because we have elected representatives? Even though we're the ones responsible for electing said representatives? Responsibility begins and ends in the polling booth?

dunsandin wrote: »

I love this - "all ye do is moan" What else are we meant to do??

Propose an alternative course of action? It's all very well complaining about the fact that vast sums of money are being pumped into banks and the state is being saddled with debt through NAMA (I don't like it either), but has anyone suggested a realistic alternative?

dunsandin

djpbarry wrote: »

So we absolve ourselves of all responsibility because we have elected representatives? Even though we're the ones responsible for electing said representatives? Responsibility begins and ends in the polling booth?
Propose an alternative course of action? It's all very well complaining about the fact that vast sums of money are being pumped into banks and the state is being saddled with debt through NAMA (I don't like it either), but has anyone suggested a realistic alternative?

I have till i'm blue in the face. Banking is a business. Business make profits and losses. Note that bit-LOSSES. Life is hard, tough. Guarantee deposits up to say 50k, the joe soaps. Use a few of the billions we have to throw down holes to start up an enterprise fund, businesses apply to it for W.Cap, etc. Private enterprises such as PRIVATE banks, deal with their Debt issues privatly. Now, is everything fixed? No? Well thats why we elect governments, sadly, we didnt elect this taoiseach, and I for one, don't agree with him. What a silly question to ask-what do you want to do Dunsandin? Who cares what I want to do? Im a nobody like most others on here, my voice counts for precisly nothing. If I want to whinge and say I dont agree with Nama, thats my right, I dont need an alternative, nobody ever voted for me, and I run no banks, Why the hell should I come up with a solution? I get it hard enough to run my own life, never mind everyone elses.

johnmcdnl

I'm 18 years old... I've only ever worked a few summer jobs and I'm happy with the 200 euro a week I'd get for my weeks work... i doubt I'm gonna be able to get any job anywhere this summer now either so that's just gonna be great isn't it for me... wonder how I'm gonna be able to earn some money to have just a few euro's spending money for myself... not looking for anything excessive.. just a few euro so I can go out at the weekend and enjoy myself now and then...

I'm going to college next September but I really can't see what job I'm gonna get when I'm leaving college.. Neither of my parents invested in this property boom even though they had enough money that they could have if they wanted to but they didn't because they seen themselves that there was gonna come a big collapse some day...

now you tell me that my mother, my father, my sister, myself, my grandmother should all pay 20,000 to bail out the few bankers and builders that never once stopped to think about "what happens if this goes badly" 100,000 for my household to bail you's out... that 100,000 for just my household... what could that do for my house if you gave it to us.... but no... you say "DO WE MOAN TOO MUCH"

we've done absolutely nothing that caused this mess... why should I be asked to pay...

LavaLamp

The thing that annoys me most is that there seems to be endless money to throw at the banks to bail them out for the "mistakes" they made.

Yes, people were willing to accept money offered to them during the tiger by banks, why? because they foolishly belived that banks were responsible, regulated financial institutions that were partaking in sensible lending, not humping fractional reserve to within an inch of it's life. Have we not been taught all our lives that we can trust banks, that if you need financial advice that you can go to your bank, that they are able to make informed financial decisions?!?

The banks screwed up big time, yet they have not been punished for their mistakes. People who trusted the banks are now left carrying the can, is there a bail out package for those people who have as a consequence of the global recession lost their jobs and now cannot afford to pay their mortgage? No chance! Are the banks that have been bailed out by these very people, and those that are lucky enough to still have a job hounding those who are now falling behind on their mortgage payments? Of course they are!

This money doesn't really exist - people are having their lives ruined over numbers that appear on a computer screen. We are going to have to pay taxes as are our children, our children's chidren and even their children in order to pay back the money for these bail outs, when in reality it never existed.

OK, rant over!

dunsandin

But John, simple soul, do you not realise that we are all collectively responsible for the banking crisis? By your very existance and drawing of breath, you are one of the culpable ones. Do you have a better idea for a solution? No, then shut up and pay up. Sure if we didn't bail out anglo, we were all going to die by dragon fire and have to eat grass for 75 years. What can be done? It is as it is and we have to make the best of it. You contributed to the debacle by not witholding your support for the system by killing yourself at the age of 5. Sure didn't you help create the problem by overpaying for food and your braces? Nama is great and will create a surplus for the exchequer of at least 259.98456%. Here is a colourful pie chart with 9million statistics to show how wrong you are. David Mcwilliams is a boll1x.

Prepare for a variation of the above sh1te being flung at you.:)

LavaLamp

dunsandin wrote: »

Who cares what I want to do? Im a nobody like most others on here, my voice counts for precisly nothing.

Oh, and while I'm at it, if all you "nobody's" actually bothered to get together and do something about anything, you'd find you are actually a very big somebody that would be listened to!

Ahem!

Yeah - finally someone has the guts to say it!!!!!!!!

Personally I'm sick of all those special needs kids, carers with terminally ill loved ones, blind people, pensioners on trollies, unemployed lay-abouts and young emigrating traitors moaning and groaning about having to deal with the consequences of the the banks greed and stupidity.

Greed is good remember!!! It needs to be encouraged. Free-market and all that!!! And everyone knows you can't have a free-market and expect people to take risks if there's the slightest possibility they might end up losing any of their enormous wealth.

I've got my 40 grand here. Well actually it was my children's college fund and my late mother's life-savings but hey?!?! Do you have an address we can send it to? I just can't wait to do my patriotic duty.............

dunsandin

Yeah Lava, probably involving battens, tear gas and a quick ride in a mondeo. I'd have a new title though, I'd be one of the "Radical formentors" or "Lawless radicals", or I'd be an "economic terrorist", be branded an anarchist and sidelined, or else just be ignored. Like I said, I cant find my radical gloves, and I'd just be outmanoevered anyway. I'll just gather up my 20 grand so. How hard can it be, sure its a pittance. (In S.Dublin) Just to fill you in on reality, I was in Dublin not so long ago, and a large group of protesters were protesting about Israels treatment of the palestinians. The security staff in Jervis st(where it was happening) started to get very rough with these (peaceful) protesters. I tried to stop them arm-locking one of them, and was told what was what. Within minutes, the worlds supply of Gardai arrived and the protest came to an abrupt end. I have never seen so many cops in my life, arrive so quickly. Go try unrest, the best of luck with that.

Tim Robbins

dunsandin wrote: »

First Im going to qualify as an astronaut, then I will become taoiseach and change all the economic policies, then Im going to become an opthalmologist and a train driver.
Why do we the people have to DO somthing? I was under the foolish impression we had regulators and elected representatives for that sort of thing. I love this - "all ye do is moan" What else are we meant to do?? Storm the bastille??? Set up a guillotine?? Im too tired and I cant find my "storming the bastille"gloves. So, Im going to moan. It makes me feel better.

We live in a democracy. Anyone can run for public office, join a political party or join one of the thousands of activists groups that focus on specific issues. That's how things change.

Unfortunately the majority of the planet, still doesn't have the luxury we have. But, yet rather than get up of his *ss the Irish man will prefer to sit on his *ss and just moan.

Tim Robbins

johnmcdnl wrote: »

I'm 18 years old... I've only ever worked a few summer jobs and I'm happy with the 200 euro a week I'd get for my weeks work... i doubt I'm gonna be able to get any job anywhere this summer now either so that's just gonna be great isn't it for me... wonder how I'm gonna be able to earn some money to have just a few euro's spending money for myself... not looking for anything excessive.. just a few euro so I can go out at the weekend and enjoy myself now and then...

I'm going to college next September but I really can't see what job I'm gonna get when I'm leaving college.. Neither of my parents invested in this property boom even though they had enough money that they could have if they wanted to but they didn't because they seen themselves that there was gonna come a big collapse some day...

now you tell me that my mother, my father, my sister, myself, my grandmother should all pay 20,000 to bail out the few bankers and builders that never once stopped to think about "what happens if this goes badly" 100,000 for my household to bail you's out... that 100,000 for just my household... what could that do for my house if you gave it to us.... but no... you say "DO WE MOAN TOO MUCH"

we've done absolutely nothing that caused this mess... why should I be asked to pay...

Why don't you do something constructive?

Tim Robbins

dunsandin wrote: »

Go try unrest, the best of luck with that.

I am not suggesting all the moaners should take to the streets, I am saying they should just do something constructive instead of their moaning. That could involve joining a political party, be more active in your community or else join an activist group for example - there are plenty of good ones to just from.

dunsandin

Tim Robbins wrote: »

Unfortunately the majority of the planet, still doesn't have the luxury we have. But, yet rather than get up of his *ss the Irish man will prefer to sit on his *ss and just moan.

Heres the rub Tim. 1. I'm rich. 2.No mortgage 3.Dont give a damn what the banks do. 4.Still think it a crime what's happening 5.I work my *ss off day in and day out, including today, tomorrow and bank holiday monday.
6.Not everybody has 20k to spare, or 2k, or 2 hundred. 6.Lots have negative equity, overdrafts, childcare or the dole. 7.Nobodys gonna bail me or them out if hard times or if we mess up 8.Care to suggest your course of action. If its good, we'll all follow you, honest.Well, maybe.

johnmcdnl

Tim Robbins wrote: »

Why don't you do something constructive?

as in spend the last 6 years in secondary school studying so when I finish up I can get a good college course and maybe get a job for myself near enough to home...

wait can't see that happening now can I - now I'm going to college hoping that when I finish there'll be a job somewhere in the country because if there's not I'm gonna have to up ship and leave the country and leave all behind me here...



and can you tell me - wtf do you mean do something constructive.. I'm just like pretty much every other under 25 year old in this country... been made consider out futures because of the actions of the select few bankers who roll round in there big mercs and million dollar suits and live in their mansions...

LavaLamp

Dunsandin, protesting isn't our only option, it's what the "powers that be" have prepared for and expect us to do.

They are prepared for violent protest. However if EVERYONE refused to go to work for one day, and refused to consume for one day they would soon start paying attention.

Well done though for going to the protest, more people need to stand up for what they believe in, Israel are nothing but bullies, but that is for another thread!

dunsandin

Lava, I wasn't at the protest, I was having a burger with my kids. I admired the protesters guts, and went over for a look. I couldn't believe how badly they were treated and stepped in to help them, and by default, became one of them. Ended up on Youtube. I think protesting is the last right of the people and would stand full square behind anybodys right to protest, wether I agree with them or not. I was AMAZED at the Garda responce- they were literally everywhere within minutes, in seriouse force - the kids and me slipped out a side door seconds before they were sealed. A real eye-opener at what the state can do when it wants to. Hard to feck with. Really shows what the powers to be think of "their" people

dunsandin

Tim Robbins wrote: »

No you have made money even if you haven't sold. You have an asset that has gone way up in value.

No offence Tim, but this shows your economic naivety. A persons home is not an asset, it is a liability, if you don't see how, you can read up on it. If you have no real grasp of what is an asset and what is a liability, how can you tell me what should be done with the wider economy.

johnmcdnl

Tim Robbins wrote: »

No you have made money even if you haven't sold. You have an asset that has gone way up in value.

do i have an asset?? our house has been the family home for over 100 years now... is that an asset tim???

and tim... if i go and build a house in a few years time for myself is that an asset??? maybe i can sell it and make more money and then go and live in a cardboard box and have lots of money and assets in the bank so everyone in the banking circle is super happy...

tim - it's clear that your in the bankers circle or whatever... the fact that the rest of us moan proves we know that there's some bad s*** going down in this country right now... you on the other hand seem to think "on the grander scale of things it's not half bad" tim.. that just shows your naivety of the situation for the average joe in this country who didn't do a thing wrong apart from trying to make a living for themselves...

Scarab80

dunsandin wrote: »

No offence Tim, but this shows your economic naivety. A persons home is not an asset, it is a liability, if you don't see how, you can read up on it. If you have no real grasp of what is an asset and what is a liability, how can you tell me what should be done with the wider economy.

Kindly explain how a house is a liability, are you sure you are not confusing houses with mortgages?

djpbarry

dunsandin wrote: »

I have till i'm blue in the face. Banking is a business. Business make profits and losses. Note that bit-LOSSES. Life is hard, tough. Guarantee deposits up to say 50k, the joe soaps. Use a few of the billions we have to throw down holes to start up an enterprise fund, businesses apply to it for W.Cap, etc. Private enterprises such as PRIVATE banks, deal with their Debt issues privatly.

So let the banks fail is essentially what you’re saying? Is that a realistic option? Would we be better off had we let Anglo fail, for example?

dunsandin wrote: »

Now, is everything fixed? No? Well thats why we elect governments, sadly, we didnt elect this taoiseach, and I for one, don't agree with him. What a silly question to ask-what do you want to do Dunsandin? Who cares what I want to do? Im a nobody like most others on here, my voice counts for precisly nothing.

Heaven forbid someone should expect a member of the electorate to provide constructive criticism of government policy. I mean, it’s not like we’re responsible for electing the government or anything...

djpbarry

LavaLamp wrote: »

Yes, people were willing to accept money offered to them during the tiger by banks, why? because they foolishly belived that banks were responsible, regulated financial institutions that were partaking in sensible lending, not humping fractional reserve to within an inch of it's life.

That’s somewhat irrelevant, because if people didn’t default on their mortgages then there wouldn’t be a problem, would there? People borrowed way more than they could afford and they must accept responsibility for that.

LavaLamp wrote: »

...if EVERYONE refused to go to work for one day, and refused to consume for one day they would soon start paying attention.

Just what the economy needs right now, eh?

djpbarry

johnmcdnl wrote: »

tim.. that just shows your naivety of the situation for the average joe in this country who didn't do a thing wrong apart from trying to make a living for themselves...

Well actually, that’s precisely what Joe did wrong – he tried to make a living for himself that was quite obviously way beyond his means.

laurak265

dirtyden wrote: »

No we do not do enough compalining. We are as of yet not holding anyone accountable for making the lives of every citizen in this country more difficult.

Why are we bailing out the banks? Where is the benefit to us? Why bail out Anglo?


For all of the money we have given the banks what if any changes have been made?

Until the bankers who defrauded the state are held accountable and changes are made to the banking system I will whinge, not mere window dressing.

Because if we don't bail out the banks then we have no banks, therefor the country becomes bankrupt and therefor might as well not exist! We need a banking system so therefor needs must!

dunsandin

Scarab, Life is too short to give a full explanation, but if you regard your home as an asset, you are on the wrong track. I own many houses, so please dont anybody leap in to show me how wrong I am, but the one I live in, whilst the most valuable, is the only one that is not an asset. Mortgage or no mortgage. Right, I'll give it a stab.

An "asset" is somthing that puts money IN your pocket. In many cases, a 5k investment in an item of plant that can be hired out is a better asset than a house-it will generate an income. Your home does not generate an income. In many cases, "Investment" properties do not generate an income, and are not assets, they are liabilities. "I bought a lovely apartment and I rent it out for €800 a month, I only have to pay €100 towards the mortgage myself. Asset? No. Liability? yes.


Your home is a liability because it generates expense, not income. You pay insurance, finance, maintenance etc. That costs money, hence, its a liability. It does not generate an income for you. If you choose to sell it, it may change into a credit on your balance sheet, but unless you use this money to buy an income generating asset, it remains funds or a liability. And you still need somwhere to live. If you have even a 1k mortgage and regard your home as an asset, you are away with the pixies. Your home is sombody elses asset, it generates them an income - your monthly payment. I can go on and on with this, but nobody will read it, and most will say I'm wrong. And I don't care, but I'm not wrong, I know what an asset is, I know what a liability is, and I even recognise that what I call "my business" is in fact not a business, it is a job I have created for myself, but I am slowly changing that, and will soon own another asset - a true business. Sorry if I've bored or lost anybody.

LavaLamp

dunsandin wrote: »

I can go on and on with this, but nobody will read it, and most will say I'm wrong.

I read it! You're not wrong, and I think I can guess at least one book you have read!

dunsandin

djpbarry wrote: »

Well actually, that’s precisely what Joe did wrong – he tried to make a living for himself that was quite obviously way beyond his means.

You are being grossly unfair here. You are expecting ordinary people to have the sophistication to ignore sales spin and marketing on the part of the financial sector, when they seccumb, you are accusing them of living beyond their means. Disingenuouse in the extreme for a person of your intelligence.

dunsandin

LavaLamp wrote: »

I read it! You're not wrong, and I think I can guess at least one book you have read!

Lava, I am a voracious reader, and yes, I have read that book, but I also have pieces of paper coming out my buttocks on many subjects. The only one that made lasting sense is that one, I have made it my mission and am on property 8 at this stage, No mortgages, no borrowings. When I die, I hope my kids follow the same path. Roberts no fool, and really only expresses what I have always believed. And yes, I drive a beat up pick-up!:)

Liam Byrne

djpbarry wrote: »

People borrowed way more than they could afford and they must accept responsibility for that.

Here we go again with this fiction! :mad:

Some people did.

But quit justifying sickening bailouts by implying that everyone did.

djpbarry wrote: »

Well actually, that’s precisely what Joe did wrong – he tried to make a living for himself that was quite obviously way beyond his means.

"Obviously" :rolleyes: What a load of crap!

LavaLamp

dunsandin wrote: »

Lava, I am a voracious reader, and yes, I have read that book, but I also have pieces of paper coming out my buttocks on many subjects. The only one that made lasting sense is that one, I have made it my mission and am on property 8 at this stage, No mortgages, no borrowings. When I die, I hope my kids follow the same path. Roberts no fool, and really only expresses what I have always believed. And yes, I drive a beat up pick-up!:)

LOL! nothing wrong with being well read, especially if you read the right books, which obviously you have Well done with your mission to date and I wish you every luck for the future!

Scarab80

dunsandin wrote: »

Scarab, Life is too short to give a full explanation, but if you regard your home as an asset, you are on the wrong track. I own many houses, so please dont anybody leap in to show me how wrong I am, but the one I live in, whilst the most valuable, is the only one that is not an asset. Mortgage or no mortgage. Right, I'll give it a stab.

An "asset" is somthing that puts money IN your pocket. In many cases, a 5k investment in an item of plant that can be hired out is a better asset than a house-it will generate an income. Your home does not generate an income. In many cases, "Investment" properties do not generate an income, and are not assets, they are liabilities. "I bought a lovely apartment and I rent it out for €800 a month, I only have to pay €100 towards the mortgage myself. Asset? No. Liability? yes.


Your home is a liability because it generates expense, not income. You pay insurance, finance, maintenance etc. That costs money, hence, its a liability. It does not generate an income for you. If you choose to sell it, it may change into a credit on your balance sheet, but unless you use this money to buy an income generating asset, it remains funds or a liability. And you still need somwhere to live. If you have even a 1k mortgage and regard your home as an asset, you are away with the pixies. Your home is sombody elses asset, it generates them an income - your monthly payment. I can go on and on with this, but nobody will read it, and most will say I'm wrong. And I don't care, but I'm not wrong, I know what an asset is, I know what a liability is, and I even recognise that what I call "my business" is in fact not a business, it is a job I have created for myself, but I am slowly changing that, and will soon own another asset - a true business. Sorry if I've bored or lost anybody.

Yes i've read Rich Dad, Poor Dad too, and while it is a good way to think about structuring your finances it does not change the fact that your home is an asset. The income it generates is the rental income that you would otherwise have to pay. How Robert Kiyosaki defines an asset is not the usual definition of an asset, it is just a good way of pushing you to reduce risk and maximise returns.

dunsandin

Scarab80 wrote: »

. The income it generates is the rental income that you would otherwise have to pay. How Robert Kiyosaki defines an asset is not the usual definition of an asset, it is just a good way of pushing you to reduce risk and maximise returns.

Can I bank this Income. Wicked, imagine how much that cheque will be for next week, I'm elected! Fantasy land here we come! Imagine what the income is going to be on the oil well I generate income on because I have petrol in the tank of my car!!! Roberts definition is unlike most other peoples because it is correct, and most peoples definition is wrong. My sister has unwittingly followed both him and Timothy Ferris, having read neither, and she is the wealthiest person I know, with the best life, and I know(as friends) the guys who own d###### shopping centre. Some day they may well catch her up. Good luck D#### and J##!! Two very clever and decent men I have been priviledged to know. Scarab-hat, talking, of, out, pleease.

djpbarry

dunsandin wrote: »

You are being grossly unfair here. You are expecting ordinary people to have the sophistication to ignore sales spin and marketing on the part of the financial sector, when they seccumb, you are accusing them of living beyond their means.

Mortgaging yourself up to your eyeballs and leaving yourself with absolutely no room to manoeuvre should your circumstances change is sheer stupidity, plain and simple - marketing and sales spin has nothing to do with it. That’s certainly not to say that “ordinary people” (as opposed to extra-ordinary?) are stupid, but I have witnessed several otherwise intelligent people make some incredibly foolish decisions over the last number of years. Having said that, most accept responsibility for those decisions.

djpbarry

Liam Byrne wrote: »

Some people did.

But quit justifying sickening bailouts by implying that everyone did.

I never said everyone did, did I? And regardless of whether everyone did or did not mortgage themselves into the next millennium, preventing the banks from failing was still the ‘least-worst’ course of action.

OMD

dunsandin wrote: »

No offence Tim, but this shows your economic naivety. A persons home is not an asset, it is a liability, if you don't see how, you can read up on it. If you have no real grasp of what is an asset and what is a liability, how can you tell me what should be done with the wider economy.

I found this funny. You are the one with no grasp of what an asset or liability is.

A house is an asset. A mortgage is a liability. An asset does not have to generate money. You could argue (although I would not agree) that it should be capable of generating income but it doesn't actually have to generate it. Otherwise companies like tescos with massive land banks generating no income would have very funny balance sheets.

Are you saying that we should not view homes as assets? That is again an argument you can make on one level. ie advise people not to treat their primary residence as an asset for investment purpose. However this is more a view of the world people should have rather than anything more.

The simple fact is property you own is an asset and would be treated as such from an accounting point of view. TimRobbins was therefore correct when he described a home as an asset.

ronan0

Tim Robbins wrote: »

pretty poor macro economic analysis

That's where it's all at.

All we're really doing is ensuring that the banks can continue to lend out what is historically very high multiples of salary to buy property - so that particular sections of our society can live parasitically off the excess.

That seems very poor macro economics to me.

It's the politics of the thing - let's finish with allowing rent-seeking of all and any forms in our society.

Scarab80

dunsandin wrote: »

Can I bank this Income. Wicked, imagine how much that cheque will be for next week, I'm elected! Fantasy land here we come! Imagine what the income is going to be on the oil well I generate income on because I have petrol in the tank of my car!!! Roberts definition is unlike most other peoples because it is correct, and most peoples definition is wrong. My sister has unwittingly followed both him and Timothy Ferris, having read neither, and she is the wealthiest person I know, with the best life, and I know(as friends) the guys who own d###### shopping centre. Some day they may well catch her up. Good luck D#### and J##!! Two very clever and decent men I have been priviledged to know. Scarab-hat, talking, of, out, pleease.

Of course you can bank this income, next week instead of paying out 2 grand for rent you will pay out nothing. +2 grand to your account. Then you go on to talk about oil well income from petrol... and you accuse me of talking out of my hat.

Do you know how Donald Trump made his billions? Leveraged property buying, and i imagine he is richer than all of your friends and the authors you mentioned combined.

The problem with following one investing strategy religously is that, while it might work for you, when you assume that it is the one and only method that can work you start to look rather foolish.

dirtyden

laurak265 wrote: »

Because if we don't bail out the banks then we have no banks, therefor the country becomes bankrupt and therefor might as well not exist! We need a banking system so therefor needs must!

Anglo Irish is no longer a bank in real terms, its's a financial black hole.

If you can give me a logical reason for the state backing Anglo Irish and maintaining most of the same managment there in exorbitant salaries, including giving pay rises, which in the current economic climate is almost unheard of (I know I am not getting one this year and I work in an industry that is still making a lot of money unlike Anglo) I will reverse my opinion.

Half of the banks the government are supporting no longer function as banks and even our bigger banks AIB and BOI are barely providing that service to the economy. What was wrong with nationalising the big banks, allowing the Anglos of this world to fend for themselves. I for one refuse to accept that the world would have imploded if Anglo irish bank collapsed.