So normally we get on with how people can save money on buying 3rd party clippers or using 2nd hand models and a whole rafter of other hobby focused methods which we use and advise others with when people are on budget. However I thought it would be good to look at things from the other end and consider ways in which we can save money in our day to day life. Not quite at the "just eat noodles for 12 months" level, but more practical tips and tricks that you've found that help you save money. Since every bit saved means a chance at having more disposable income.
A few to get the ball rolling:
1) Eco Eggs. These are small plastic eggs that you put in your washing machine for cleaning laundry, instead of using chemical detergents or those little plastic sachets. You simply put the ball in and the mineral based balls inside it churn up and make the soap. Cleaner for the environment and also FAR cheaper since the egg will last for ages and ages. You can refill them very cheaply. They work best on cooler washes, so sometimes you might want to pop a stain remover powder in if you've got very stained clothes; but otherwise they work great on their own.
They also make some paired balls for the dryer, which have an incense stick inside them (also refillable) which help tumble around to spread air in the load (speeds up drying time) and also scents your clothes too. This is instead of those little fabric scent sheets. Again if you use them its a big saving yet again.
2) Electric firms (UK) I've noticed have started charging based on estimations of your meter reading far more so than in the past. They also seem to like overcharging on the estimations. Their argument is its building a "buffer" for the winter when you might use more electricity. However we've found that it can build up quite a considerable amount of overpay that they are holding onto. So a good poilcy is to check every so often and if its building up consider asking for a lower rate and also request a withdrawal of your money.
Unlike an oil firm that might hold your money for months so that you've got money there to buy oil directly with in one go; the electric firm doesn't need to hold a big surplus of your cash.
Get rid of credit card debt and/or loans asap. Also, if you do need to utilise credit facilities be it loan or cards, try to remain within 20-30% of total credit utilisation (£300 spent on £1000 card balance).
Basically, it costs you potentially huge in the long run. The difference between a 2% mortgage and a 4% mortgage over 25 years on a 250k house - just above average uk house price - is the best part of £80k extra in interest over that 25 years...
In line with the above, make a concerted effort to save anywhere from at least 10% of all pay checks, 20-30% if possible (or even higher) after deductions (including pension deductions).
If you can keep it around 20-30% it really makes you realise the value of money and curbs spending...
Then have an additional 10% being saved as an emergency fund, the idea being that it is money to be accessed if there is a dire need but doesn't impact on savings. Ideally you will have a few years of good luck so when a big car bill, or new boiler is needed, this should be able to cover it in full, or be a decent help without digging into your wages.
Lastly, and something I've had in place for this year that has been working very well for me... Rather than a spending limit for my disposable income, I have an item/experience/entertainment limit per week. Clothing is also included in this. I allow myself 1 item a week. If I want to accrue a few items, I have to save up weeks to do so. It makes me really consider whether I want an item before spending on it usually. I include all none essential items in this 1 a week limit, and include eating out etc.
I'm saving the best part of an additional £300-400 each month due to this specific tactic... Forcing myself to be more frugal is really paying off.
Even though that might be trivial for most people: cooking yourself and buying really basic ingredients instead of finished meals is often (at least here in Germany) much cheaper.
A bag of flour, a large bottle of olive oil, some yeast and a bit of salt and you can make a lot of pizza/bread for example for much cheaper than buying the "ready to go" stuff.
It's also astonishing how much food you can prepare from 100 € worth of potatoes, rice, flour, oil and seasonal vegetables compared to instant food and it's also much healthier.
If you are in a country with cheap, drinkable tapwater drinking water and tea instead of soda and other fizzy drinks also adds up over time.
Last but not least: it's amazing how cheap furniture you can get on Ebay classifieds (Ebay Kleinanzeigen in Germany). You always have people that just want the stuff gone and offer it for a couple of bucks or even for free if you just come and get it. I did the same a couple of times. Had a large sllightly damaged wardrobe and table I didn't need any more but who would have been a bit** to get to the dumpster. Put it in for free and a couple of guys came over and took it gladly. Win Win situation.
In line with the above about food and making your own... Make your own damn coffee.
If you get the average 4 weeks off work a year (so work 48 weeks a year), and spend £2.50 a morning, monday to friday on a coffee on the way to work, that's £600 a year. You can make a half decent coffee at home for around £0.10 (£0.30 if you want something a bit more high end out of a machine), and it's way better for the environment to use your own travel cup/mug every day. So yeah, anything from a saving of £528-576 per year saving... Best part of an army if you are so inclined.
On the topic of savings by not buying a cup of coffee a day:
Track your spending. Sit down for a month and log every penny. You would be surprised how “microtransactions” like a cup of coffee or a candy bar from the vending machine will add up. Like counting calories on snacks when loosing weight, tracking what you spend is eye opening. For those who hit the vending machines, a little foresight can save a TON of money. Buy in bulk at the grocery store. Portion things out at home (to prevent grazing the whole bag of chips in one sitting) BYOSnacks. For the cost of one pack from the vending machine you can get the family sized bag at home and munch all week. A couple bucks here and there every day add up a lot faster then you’d think.
While not technically in the letter of the thread, I think this is in the spirit of it: If you're having money problems, consider trying to make more money.
I'm not being flippant. Most money advice tends to focus on cutting costs, skipping that latte, and so on; but you should also consider trying to increase revenue, when possible. Yes, a lot of people can only get raises at certain points, the economy is bad right now, yadda yadda, but it something to think about if you are pinching pennies: can you make more money someplace else? Can you switch to a different role in your current job? Can you negotiate a raise? Are you getting compensated to the degree you value your labor? Would you be eligible for a promotion if you took a class, or classes?
These are all questions you should regularly address if you're having money problems, or really just in general if you are not where you want to be financially. Spend less, obviously... but also, make more, if you can.
Saving money goes hand in hand with astute ways to make income also, so I agree with the above... Though, diversify your income if and where possible. It means you are less susceptible to changes in the market, some of which you cannot control.
I have two businesses alongside my main income from my job, I'm looking to add a third soon. If my jog goes belly under for any reason, I at least have some income coming in as a safety net to tie me over. Alternatively you can get additional part time jobs utilising your skills here and there and choosing your own flexibility.
I actually believe this will be the norm in future mind, I think full time jobs will be a rare thing in the future.
Keep in mind that they grow so fast, that there are pieces of clothing they will only wear once or twice if at all. There are lots of people out there with loads of children clothes that are nearly new and that they don't need any more or at least not for the next couple of years. You can either buy them for cheap or try to find an "Exchange circle". We have something like this in the church my wife goes to. Besides from shoes I did not BUY any children clothes so far.
Don’t go food shopping when you’re hungry. Go after lunch, or have a snack first. This will reduce impulse spending.
And Shop By Meal. Work out what you fancy for dinner that week, and plan accordingly.
Learn to make soup. I’m super (souper?) lazy, so invested in a Soup Maker. It’s basically a kettle with a built in blender, but you don’t need one really. Soups are a solid way to increase your veg intake, and make use of wonky veg, or veg that is just about to turn. Even relatively fancy soups like Mulligatawny are a doddle to make. Serve with a crusty roll, and that’s a cheap, nutritious lunch right there.
Automatically Appended Next Post: Oh, and to avoid false economy, look at the shelf label for the ‘price per 100g’ info. This is something Dear Old Mumsie snowed me when I was a kid.
It’s especially useful for weighing up Special Offers.
Example? Diet Coke. Right now, using Sainsbury’s website for reference, a 2 litre bottle is £2.05, or 10p per 100ml. A 1.25 litre bottle is on offer at £1, or 8p per 100ml. The more lunch convenient 500ml? £1.40, or 28p per 100ml.
There, and without considering other brands, the 500ml offers crap value. So why not grab the 1.25ml, and use a glass/swig from the bottle?
I'd go one step further than just paying off credit card debt. Stop using them altogether. The entire point of credit cards is for people to spend money they don't actually have.
Buy stuff in one go as much as possible, even if you have to save up to do so. Downpayments always cost more in the long run.
On a related note, don't use your debit card to pay for everything. Get cash - say $/€/£100 a week and use that for groceries and miscellaneous stuff. You'll have much better insight into what goes out than if you use the card for everything and only check what you have left every now and again.
Get a second bank account. One main one, then every month the day your salary arrives, put whatever's left in the main account on a secondary account. Just leaving it in the main tends to make you spend it. A colleague of mine even has multiple accounts, each for different purposes - one for vacation, one for emergencies, one for the house, etc.
Get your groceries one week at a time. A month if you have enough storage space. The more trips you make to the shop, the more extra stuff you don't really need finds its way into the shopping cart.
Don't throw stuff you no longer want or need away (assuming it's still in working order). Put it in boxes or other storage, and sell it a car booth sale or change it for stuff you do want/need at a swap meet. While you're there, have a walk around for cheap stuff you do want/need while your wife/buddy/parent/whoever's trustworthy takes care of your stall.
Know what things cost (especially true for big expenses, but smaller items add up too). If you don't, don't buy it the first time you see it. Look around until you have a good idea what's expensive, what's a reasonable price, what's cheap, and what's too good to be true - and maybe it'll randomly go on sale somewhere in the meantime.
Credit Cards are useful, especially under UK Law. They provide solid consumer protection, and you only need to pay part on credit to trigger the relevant Consumer protection law.
I'll post the whole quote, since it works better that way:
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
Terry Pratchett, Men at Arms
As for how I got out of dept:
1. I 'shared a house' with someone, instead of living alone, and
2. Pay off the high-interest debts first. It sounds obvious, but the marketting of debt is meant to make you think about interest rates oddly.
On the subject of cheap goods - auction rooms!
You'd be amazed at the cheap cost of sofas, chairs, tables, wardrobes and even electrical goods. We've got a £30 fridge which has lasted for years and the only downside was the door handle was damaged when we bought it. An easy fix and now we've had good service for years. That's a vast saving over perhaps £300 or so for a new one. The only trick is having a vehicle/trailer/access too one big enough so you don't get stung on delivery costs; otherwise you can pick up a lot of household stuff very cheaply. Granted it might not be cutting edge new, but much of it will be functional.
Also do check out local ads for things like sofas - big bulky stuff is a nightmare to get rid of. There's also a thing with fire-labels in that auction houses won't take furnishings that don't have them unless they are antiques. So there's a body of sofas and chairs and such which are unsaleable through that avenue and yet are perfectly fine.
You do want to go a few times and spot some of the patterns, eg a pile of spades and shovels outside might sell for nothing; but cleaned up and polished they can sell for more when they are sold in the "modern interior design sale". So you do need to watch for patterns like that. You also have to decide the value of things to you and be firm on your budget and not get drawn into bidding wars. Sometimes you can do this by leaving a bid and not taking part in the auction itself (which might be what you have to do if time doesn't allow you to attend). Many are also well tied into live online bidding too.
Bran Dawri wrote: On a related note, don't use your debit card to pay for everything. Get cash - say $/€/£100 a week and use that for groceries and miscellaneous stuff.
A good few superstores are now no longer taking cash and this will likely remain till health concerns about corona are gone. It wasn't even that they didn't want to touch money, but also because they weren't getting deliveries from the bank/doing runs to the bank etc... So whilst I do think this is sound advice its becoming harder to follow.
In the same line of thinking I've noticed its easier to monitor digital spending by doing digital banking. Don't rely on the monthly statement, get signed up digitally so that you can check your balance regularly
Always checking your statements is solid advice. Not only does it give a summery of what you spent, but you can make sure there are no fraudulent charges. Or payment posting issues. Back when I was married, we had an issue where due to the way checks cleared, we dipped into our overdraft fund without realizing it. That we then started accumulating interest we owed on.
Credit cards should be used for convenience, not credit. They are incredibly handy to have. And some will let you strech you money. I’ve got one through Amazon, and get points back that translate into free gift cards. As long as I pay it off every month, I’m not paying anything extra. But always look at the terms and fine print. Not all cards are created equal.
Ask for discounts. I work for a medical billing company. We don’t expect to get 100% of every charge paid. By the very nature of how it works, we write off thousands of dollars every day. The doc will bill a $2,500 procedure, but the contracted rate with the insurance company might get them paid $300 for that. If you don’t have insurance, ask about their charity care plan; they have one. Or tell them you are uninsured, and ask to pay at the medicare rate (which a lot of contracts are based on). You do NOT want to pay the full rate. But we’ll be happy to collect it from you. I’ve talked to patients on the phone who let their pride get in the way of their finances. “I pay my debts” is a great life philosophy, but with a little paper work we’d have cut your bill in half. And would not have noticed the loss, as we don’t expect full payment.
The other issue with using and carrying cash, is the temptation to buy small things because you have the money in your pocket. I dread to think how much I've blown on vending machines over the years, so getting a contactless card is actually a blessing for me.
I'm not being flippant. Most money advice tends to focus on cutting costs, skipping that latte, and so on; but you should also consider trying to increase revenue, when possible. Yes, a lot of people can only get raises at certain points, the economy is bad right now, yadda yadda, but it something to think about if you are pinching pennies: can you make more money someplace else? Can you switch to a different role in your current job? Can you negotiate a raise? Are you getting compensated to the degree you value your labor? Would you be eligible for a promotion if you took a class, or classes?
Or a side job or personal store kinda thing, doesnt have to be big.
Make money buying things at garage sales, then selling on ebay or craigslist(Yes it works)
Or find a way to make money off your hobby, buy and sell armies and stuff.
I think the barrier for a lot of people on buying and selling is often the mechanics of the sale itself.
It's very easy to do a bit of home garage sales or carboot sales or online sales; but ifnd that you're not actually making that much per hour in travel and sale times; or in fuel and packaging costs etc... Especially if you're not selling low buy super high value sale items.
I know that even just for casual secondhand selling I try and hang onto every box and packaging material that I get from deliveries so that I don't have to go out and find a random cardboard box etc...
- DIY whenever possible (food, repairs, services, etc...).
- Not buying fast depreciating assets (ex: a new car). If needed, acquire 2nd hand for a somewhat similar condition but with considerable discount.
- Not buying products with extra costs based on brand if a similar but perhaps not-so-fancy alternative is available (ex: tech products or clothes. But happens to be very true for this hobby too!).
- If buying non-essential item (so most things), wait for discount periods (ex: black friday).
- Track every spending/income. Do monthly summaries, check possible saving areas by comparing alternatives (ex: commuting by car or public transport? Based on cost+time).
- Add more income: extra job, appreciating assets, passive income.
- Investing but do not have all eggs in one basket. Financial engineering if viable to reduce certain... uh... "expenses". Always DYOR.
- Try not to have addictions. Food cravings, drugs (even the socially accepted ones), etc... Accustom the palate, your body and wallet will thank you.
I'm definitely going to second keeping track of every payment and limiting your microtransactions.
I'm still only relatively young compared to most of the people on here, but stopping myself from picking up the little things here and there have really built up for me in the long run.
Ouze wrote: While not technically in the letter of the thread, I think this is in the spirit of it: If you're having money problems, consider trying to make more money.
I'm not being flippant. Most money advice tends to focus on cutting costs, skipping that latte, and so on; but you should also consider trying to increase revenue, when possible. Yes, a lot of people can only get raises at certain points, the economy is bad right now, yadda yadda, but it something to think about if you are pinching pennies: can you make more money someplace else? Can you switch to a different role in your current job? Can you negotiate a raise? Are you getting compensated to the degree you value your labor? Would you be eligible for a promotion if you took a class, or classes?
These are all questions you should regularly address if you're having money problems, or really just in general if you are not where you want to be financially. Spend less, obviously... but also, make more, if you can.
Generally if your skills are in enough demand that this works, you're not hurting for money in the first place.
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Nevelon wrote: And would not have noticed the loss, as we don’t expect full payment.
THEN CUT YOUR RATES!
Seriously, you have no idea how many people NEED health care and don't bother even trying to get it because they 'know' they can't afford it.
Making more money isn't just relevant if you are having money troubles. It is a great way to boost savings or help clear credit faster, even if you are financially secure. I still work as an examiner in summer (although not this year) and occasionally do private tuition, as they pay for things like additional holidays, despite being on a comfortable salary. Make hay, as they say.
Ah, now if you're struggling the situation changes- most of these tips and tricks are for when your income is stable and good enough for your bills.
If you're hurting bad, take advantage of the medical scare and your own resources-
right now Biolife will pay you about 70 dollars a donation for plasma. You can give that once a month, so it'll help stabilize you. Hair's a less frequent resource, but all you have to do is not cut it, and you can keep 100-200 dollars of emergency fund hanging around on your head that you can cut and sell every few years.
I would consider these less money saving tips and tricks, and more desperation hustles.
If you live in an especially hot climate, and frequently run your air conditioner, get some really good black out curtains, or put 2 regular curtains over each window that faces the afternoon sun. It will reduce your heating bill. There's a reflective film they sell too that you can apply to your windows, and it's a bit of a pain to put up but it does reduce energy usage.
Nevelon wrote: And would not have noticed the loss, as we don’t expect full payment.
THEN CUT YOUR RATES!
Seriously, you have no idea how many people NEED health care and don't bother even trying to get it because they 'know' they can't afford it.
I very much get the impression you're yelling at the wrong person here. If Nevelon was high enough up the chain to be setting the rates, they'd be directly profiting from it, and if that were the case why encourage people to bargain for less?
I agree with the principle of the point, though - US healthcare is an absolute state financially, and I'd have to say that the point about saving money by asking for discounts applies far more to that industry than any other. In fact, in many it doesn't apply at all and will only earn people's ire (imagine the look a Walmart cashier would LOVE to give you, if they could do it without being fired, for asking if they'll give you their staff discount).
Nevelon wrote: And would not have noticed the loss, as we don’t expect full payment.
THEN CUT YOUR RATES!
Seriously, you have no idea how many people NEED health care and don't bother even trying to get it because they 'know' they can't afford it.
I very much get the impression you're yelling at the wrong person here. If Nevelon was high enough up the chain to be setting the rates, they'd be directly profiting from it, and if that were the case why encourage people to bargain for less?
I agree with the principle of the point, though - US healthcare is an absolute state financially, and I'd have to say that the point about saving money by asking for discounts applies far more to that industry than any other. In fact, in many it doesn't apply at all and will only earn people's ire (imagine the look a Walmart cashier would LOVE to give you, if they could do it without being fired, for asking if they'll give you their staff discount).
Yup. I’m just a minimum wage office drone, working the offsite billing department. I don’t set squat for policy or pricing. And while healthcare reform might cost me my job, I’m all for it. It is a hot mess, confusing, and full of traps and gotchas. I do what I can to explain things and work within the system to make things better, but there are rules I need to follow. And I do point out the loopholes that people can use when applicable.
If I can do anything to segue that back to the original topic - it's that the other field the point applies most to is insurance of all kinds, and that's not just a US thing.
By all means ask for any added extras you can with insurance, wherever you can, because you can bet when the tables are turned the provider will try whatever they can to weasel out of honouring payments in return.
I got very lucky with a car accident the other year - my car was parked, the offending driver was drunk so upon realising he'd crashed, ran from the scene... leaving the car in the middle of the road. So I was already in the lucky position of clearly being 100% not at fault. Per default insurance policy I would still have had to pay an excess (...why?! I've NEVER agreed with excesses, but anyway). I managed to get this waived by politely explaining to the agent on the other end of the phone that I had difficulty with the notion that I should have to pay anything for a known and accountable party's fault. She agreed... the excess got claimed on their insurance too. That would never have happened if I hadn't asked.
Please don't call me a redneck but I save a lot of money each year on food by hunting in the fall. Last year, I killed three dear and the year prior I killed two.I haven't had to buy any meat in the last two years.
When the wife is tired of eating red meat, I'll pack the freezer with quail and squirrels. Yes I said squirrels. If you've never had it, you'll never eat chicken again if its cooked properly.
I am not sure what the rules and regulations are outside of the US, but if your living here in the states, definitely look into hunting for providing protein. Not only is it cost effective and will save you money in the long run, but you are harvesting game that is healthier for you because its never been vaccinated or given antibiotics.
Not to mention that hunting in and of itself is a hotly political topic over here anyway, even before you work guns into the mix.
I appreciate the sentiment though, and I can switcheroo it to make it a little more UK friendly.
Don't be afraid to try different, cheaper types of meat - not every roast has to be chicken or beef. Heck, not every meal has to have meat, there are plenty of other ways to get protein and you can open your eyes to some tasty dishes without necessarily going full vegetarian/vegan.
Here's your starter for ten - mushroom risotto. The ingredients should cost you no more than a fiver, you'll get enough to make dinner for 4 or 5 out of that AND you cook it all in one pot, so it's even easy to tidy up and wash up after.
Don't waste virtue. Seriously, I remember once when I was dieting I would go every morning to macdonalds and get coffee and a pair of egg macmuffins, which are suprisingly good food from a nutrition perspective for breakfast. I didn't cook it for myself because breakfast is a slightly cheaper meal to buy than lunch or dinner -- so I saved more money cooking my own dinner (and controlled the calories better) than I would have wasted if in my busy day I spent the cooking time on breakfast. Various foods, carefully picked, and thrown in my hotpot the night before would give rise to most of my dinners, or soups and stirfries (the two often having the same ingredients) in my wok.
Even though it sounds virtuous to start off virtuous (by taking the time to get up early and cook breakfast), the economic activity of expense vs income is necessarily a long war exercise. You can't white knuckle down your expenses in a sudden sweep of magic and then expect level of personal effort and attention to sustain -- because many expense reductions will have a cost in effort and YOUR effort is valuable, and scarce.
All I am saying is imagine you earn a certain amount of money for your time. Maybe its not much, but factor that into your cost savings. Do you save 1 dollar on produce by going to the slightly better market, but it takes you an hour longer to get through the huge place and through the checkout? Bad idea -- you could have probably figured out a way to save more than 1 dollar with an hour of your time to use wisely. So maybe your time is worth (to you) on average 1/3 your hourly wage at work (reflecting your free time being fairly inelastic with respect to work income, sure) .. but suddenly, if you are earning 18 bucks at work, you should look at 1 hour of cooking and cleanup as costing (independant of all other resources) 6 dolllars of YOU.
If that makes sense.
Good accounting for real expense (including apparent externalities) compared to and allocated rationally to real income (including apparent externalities) is a key for small businesses -- and for you -- in figuring out what assets and liabilities are wise to take on. A too ambitious failure of a major project has been the ruin of many an attempt at home economics!
Also note that hunting and FISHING are on the same page of cost saving, and you can get to fishing rather cheaper than you can probably get to hunting in many states of the union (and perhaps of the UK)
Loans are complete gak. Lol I haven't heard of these little washing balls, thanks for the information. Quite strange advice from people who say "watch your spending" it seems to me that this is done by people who do not stand out with huge funds
I don't really keep track of all my expenses during the month, but I understand how much money I have left after some major spending on something. I had a lot of free time and my brother recommended me yourmoneygeek.com on which I learned about various apps and installed a couple, now I spend my free time usefully and earn some money for various expenses, quite conveniently.
Dump cable tv if you have it, get a digital antenna and maybe something like a roku, get internet tv.
My bill for cable, internet and home phone was 192 USD a month. I dropped bacle altogether, dropped home phone and switched to a roku for tv and magic jack for my phone.
My roku is basically free after buying the 20 USD module, and you cna have like 3-4 of them on one account. I pay 30 a months for sling and 5 for one add on.
My magic jack gives good phone service and it like 5$ a month as opposed to what i was paying for phone thru my 'bundle'.
my tv bill is like 35 a month now and yes i do have to switch inputs from the roku to antenna to get local shows but its easy.
So i went from 192 USD a month total to 75 for my internet (Yeah, they jacked it after i dropped cable and phone) and maybe 35 a month total for phone and tv. So it's down to like 110 a month. With the antenna, a one time 30 USD purchase i ge m y local news and shows free OTA.
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Overread wrote: On the subject of cheap goods - auction rooms!
You'd be amazed at the cheap cost of sofas, chairs, tables, wardrobes and even electrical goods. We've got a £30 fridge which has lasted for years and the only downside was the door handle was damaged when we bought it. An easy fix and now we've had good service for years. That's a vast saving over perhaps £300 or so for a new one. The only trick is having a vehicle/trailer/access too one big enough so you don't get stung on delivery costs; otherwise you can pick up a lot of household stuff very cheaply. Granted it might not be cutting edge new, but much of it will be functional.
Also do check out local ads for things like sofas - big bulky stuff is a nightmare to get rid of. There's also a thing with fire-labels in that auction houses won't take furnishings that don't have them unless they are antiques. So there's a body of sofas and chairs and such which are unsaleable through that avenue and yet are perfectly fine.
You do want to go a few times and spot some of the patterns, eg a pile of spades and shovels outside might sell for nothing; but cleaned up and polished they can sell for more when they are sold in the "modern interior design sale". So you do need to watch for patterns like that. You also have to decide the value of things to you and be firm on your budget and not get drawn into bidding wars. Sometimes you can do this by leaving a bid and not taking part in the auction itself (which might be what you have to do if time doesn't allow you to attend). Many are also well tied into live online bidding too.
Bran Dawri wrote: On a related note, don't use your debit card to pay for everything. Get cash - say $/€/£100 a week and use that for groceries and miscellaneous stuff.
A good few superstores are now no longer taking cash and this will likely remain till health concerns about corona are gone. It wasn't even that they didn't want to touch money, but also because they weren't getting deliveries from the bank/doing runs to the bank etc... So whilst I do think this is sound advice its becoming harder to follow.
In the same line of thinking I've noticed its easier to monitor digital spending by doing digital banking. Don't rely on the monthly statement, get signed up digitally so that you can check your balance regularly
I don't shop at stores that don't take cash. A cashless society is a nightmare scenario.
Super Ready wrote: Not to mention that hunting in and of itself is a hotly political topic over here anyway, even before you work guns into the mix.
I appreciate the sentiment though, and I can switcheroo it to make it a little more UK friendly.
Don't be afraid to try different, cheaper types of meat - not every roast has to be chicken or beef. Heck, not every meal has to have meat, there are plenty of other ways to get protein and you can open your eyes to some tasty dishes without necessarily going full vegetarian/vegan.
Here's your starter for ten - mushroom risotto. The ingredients should cost you no more than a fiver, you'll get enough to make dinner for 4 or 5 out of that AND you cook it all in one pot, so it's even easy to tidy up and wash up after.
On this one, do also consider investing in a Slow Cooker. They come in different sizes, so best to get one suitable for your home head count.
These are pretty easy to use, and can turn cheap cuts of meat into very tasty food with a minimum of fuss.
In terms of credit? It’s nothing to be scared of if you plan properly.
Overdrafts are probably the worst, as they attract high APR, and they’re easy to see as not being Credit. Once in place, it’s easy to forget they’re costing you every time you use them.
Credit Cards are a smarter option for flexible credit. Just be sure to make inroads to your balance each and every month. If you can only afford the minimum repayment, you’re in trouble (especially as they Jack up the interest rate unilaterally).
Loans? Well....they do have their uses. Provided you can afford the repayments, and stick to them, they’re a set expenditure. But do check the fine detail. Whilst a bank can’t increase the interest rate (ever), they do often attach onerous costs for early repayment. So shop around.
Each do of course have their uses in specific situations (an overdraft allows you to deal with unexpected bills, provided you’re capable of clearing it in the next couple of months etc). I won’t make specific recommendations, because I’m not a financial advisor.
But always factor in your repayments each month.
In the modern day, we’re also suckers for convenience. No need to leave the house to watch a movie, you can just get it on Prime. Decent bargains can be had, but remember to check other ways, such as online second hand stores. If you can wait a couple of days, you can get older films for dirt cheap. Just watch your postage!
Just be aware and honest about your finances. Me? I do pretty well. Between my wage and my flatmate’s share of the rent, I have a solid amount of money to play with each month. What I could do with doing is trying to get all my Direct Debits and bills coming out the week after payday. Firstly it’s a weight off my mind, as I know they’ll all be paid. And in case of financial mishap (overspending, and forgetting about a pending bill) helps to avoid fees and charges for missed Direct Debits (got my timings wrong last month, and my £40 car insurance bounced. This lead to a £30 fee, which I’m less than happy about! My own fault though).
For getting finances back on track, at least here in the U.K. your online banking should show you your existing Direct Debit and Standing Orders, including due date and amounts. Use that information to get a clear and honest picture of what your outgoings are, and when they’ll be taken. From there, cut down your take aways and “luxury” spending.
Also pay attention to changes of cost for existing stuff. Example? Because I rarely use my mobile phone, I’m on Pay As You Go. Maybe £10 per month, and that’s it. But recently, Vodafone in their infinite greed wisdom, changed so I’m charged £1 a day for near unlimited use..... I’m not having that, so am currently looking to change provider. What I’m looking for is to just load it with a certain amount, and that amount to wait for me to spend it, rather than have it spent on my behalf.
I’m sure Vodafone’s new deal will suit others (people who use their phone regularly), but it’s not for me.
Netflix is another sod for upping its prices. When I started, it was around £4.99. When I cancelled it last month, it had risen to £11.99 or so. It may not sound a huge amount, but over the year it’s still £144 saved. Always check your using your full package as well. You often pay a premium for multi screen viewing and HD. If you’re not really using that, go as basic as you can so you’re not wasting money.
Other basics also apply. Don’t leave devices on standby, switch them off properly. If it’s a walkable distance, do so. Very basic car maintenance (changing bulbs) can be done cheaply yourself, likewise changing wiper blades. When filling up, go to the cheapest petrol station, not the nearest (unless you’re running on fumes, when needs dictate otherwise). Shower, rather than bathe (less water, less water heating costs). Bit chilly? Put on a jumper before the heating, see how it goes.
Get energy saving lightbulbs. Sure, part for part they are noticeably more expensive. But they last a helluva lot longer, and use less electricity.
Need new electrical or white goods? Check the energy rating as well as the price. More efficient ones will probably cost more off the peg. But if you’ve got a family, the energy savings will likely justify that expense. Remember to check consumer guides such as Which? as well, just in case a more expensive model is still a steaming pile of poop.
Energy saving bulbs aren't that expensive if you know where to shop. I had this debate with a person who was absolutely incapable of changing his views no matter what once. He claimed that the new ES bulbs were too expensive for poor people to afford and ended with the line "I love using (Sociopolitical view group) arguments to prove (Sociopolitical view group) are wrong about everything." and show a bulb costing 7$.
There were 4 packs of some of the new ES bulbs on sale at my local dollar tree store for a dollar. I bought them, took a pic of the box in my hand and a clearly readable pic of the receipt showing the bulbs were a dollar for 4 and posted it in reply to his message.
These were the older CF bulbs, but they were still a lot more energy efficient than the incandescent ones and lasted longer.
LED bulbs can be more expensive, but their lifespan more than pays for it plus the savings in energy.
The real issues I find are a of (at least in the UK) the traditional household bulbs have got cheap, really cheap in how they are made. We've had many where when they die they pop-off their base. So when you go to unscrew them the glass comes off in your hand and you've got to make darn sure the power is shut down and then get some pliers to unscrew the base.
Meanwhile LED bulbs last a long time, BUT they do not like heat. This means they can fail more often in a hot/human environment (eg a kitchen).
Keep in mind that they grow so fast, that there are pieces of clothing they will only wear once or twice if at all. There are lots of people out there with loads of children clothes that are nearly new and that they don't need any more or at least not for the next couple of years. You can either buy them for cheap or try to find an "Exchange circle". We have something like this in the church my wife goes to. Besides from shoes I did not BUY any children clothes so far.
The same is true for baby buggies etc.
Or just don't have children. Saves a ton! And also helps the planet.
Play a game for yourself. It's called "How long can I go without buying anything that isn't food." Perhaps imagine how folks would have tried to get by during the great depression. Putting your thinking, or identity into that space will drive a lot of discovery and behavior. Just be careful not to fill every other book in your house with cash "to keep it safe" like my grand parents did.
Bran Dawri wrote: I'd go one step further than just paying off credit card debt. Stop using them altogether. The entire point of credit cards is for people to spend money they don't actually have.
Buy stuff in one go as much as possible, even if you have to save up to do so. Downpayments always cost more in the long run.
On a related note, don't use your debit card to pay for everything. Get cash - say $/€/£100 a week and use that for groceries and miscellaneous stuff. You'll have much better insight into what goes out than if you use the card for everything and only check what you have left every now and again.
There are benefits from using a credit card to pay for everything, assuming you clear it every month:
Some cards offer points/cashback. I get something like 0.5% back on my Amazon card which lands me maybe $50 worth of gift vouchers a year.
Tracking. You can see from your ownline statements where the money goes, and get alerts for exceeding thresholds.
I'm terrible with cash, that £20 quickly becomes £10 + change and then the change vanishes on micro transactions. Without a paper trail it's a nightmare trying to remember where it went, though it is a lot harder handing over a pile of notes than it is to just swipe for a big purchase.
Automatically Appended Next Post: I find stopping and thinking about purchases helps, especially if you frame it with a comparison.
Do I need that now? Can I wait?
Is that really worth 4 hours salary? Is this a better spend than that?
I used to do the salary thing, but as i got more an more per hour i stopped.
I did realize that mine feeling like i dont have much money was my feeling of FOMO with armies and games. I typically come to terms with stuff like i will never build my dinosaur orc army and i shouldnt do every army that pops into my head.
The biggest things with saving/budgeting is to know where you are, and what you can improve. If you don't make enough money to support the lifestyle you want, you need to improve your income.
Once you make enough to support yourself (however you define that), you gotta focus on debt. If you have a lot of credit card or other non-secured debt (payment plans, medical bills, even student loans) you're probably better off paying them off before anything else. Car loans and mortgages are okay, and in some situations student loans may be worth deferring, but in general, unsecured debt has such a high interest that they're a big bleeder.
In terms of saving, there are big things you can do, which usually include housing, transportation, or starting a family, that dramatically change your finances. Buying a house or renting an apartment at the lower end of your budget frees up FAR more money than skipping your latte.
that said, once you have the big things squared away, the little expenses will add up. For people with a middle class job, eating out is probably the number one true expendable expense, although for some people it's spending on clothes or toys.
Oh yeah, for me i found out that for me my trips to 7/11 and eathing out where what where killing me.
The problem i had was if i bought the drinks i wanted i would drink way to many.
But with some discipline i got that down, no more trips to the store,
and i only eat out on payday!
1.Don't make eating out a lifestyle choice. It's a treat. I eat out about once a month, if that.
2. Drop STUPID habits. I don't know how many people I know that "can't" find money for their kids' school supplies, but seem to have an endless flow when it comes to buying lotto tickets or cigarettes. Seriously, cigarettes can cost thousands per year, not to mention the added health care costs and missed work.
3. Goodwill stores (or equivalent second-hand store in your area). I've found name brand clothing that has the tags still on it for less than you'd buy a cheap version of a Wal Mart.
4. Hunting/fishing. Not just a hobby, this can literally put hundreds of dollars of food on your table per year.
5. Plan your meals ahead of time. It makes buying in bulk easier (and cheaper), and let's you buy when prices are low.
6. Realize you have to balance money flow in with money flow out. I once had a chance to switch to a job that would have increased my income by $5 per hour. I turned it down because my current job meshed better with my wifes (thus no daycare costs), plus my current job was a 2 minute commute, while the new job was 35 miles away. That's about 75 minutes per day driving that I'm NOT getting paid, while putting an extra 18,000 miles per year on my car.
7. Get handy with your own repairs. Minor plumbing, electrical, and car maintenance isn't really that hard to learn and will add up quickly.
8.Research your local area for entertainment. You don't need to cross the country when something cool is 20 miles away. I got into Geocaching years ago. Thousands of tiny hidden packages all around the world with their GPS locations listed. Free, you get to see areas of your local community (or anywhere really), gets you exercise, and will take you to spots you never realized were fun.
9. Get to know your neighbors. You'll never know when having someone watch your back will come in handy. You'll get free home security, free rides, free entertainment, and much more. Yes, you'll have to give back too, but that's well worth it.
hotsauceman1 wrote: Oh yeah, for me i found out that for me my trips to 7/11 and eathing out where what where killing me.
The problem i had was if i bought the drinks i wanted i would drink way to many.
But with some discipline i got that down, no more trips to the store,
and i only eat out on payday!
Also your lunch for work.
Before The Plague, I’d usually spend £3 on my brekkie, and £3.50ish on lunch (sometimes more, depending on what the staff canteen had on).
In the grand scheme of things, it’s easy to see those as good value. Sandwich, snack and a drink for £3 is certainly pretty good. But....when you total it up over the month? That’s £182.00.
We can do better by bringing lunch to work. Had a roast chicken for Sunday lunch? Strip the carcass. Make some cous cous using veggie stock, add in some fresh veg (peas, pepper and onion for me, thanks) and some of the stripped chicken. A decent, filling lunch for relative pennies. Just takes a bit of extra discipline and effort.
When I lived on my own, I’d do a Chicken for Sunday roast (frozen veggies, because they last longer, ideal for the singleton). Monday night? Using the remaining breast meat, Chicken Curry. Legs and wings could be a small dinner on their own, or a couple of lunches. Break the carcass right down, and then the couscous explained above. And if you’re really mad for it, use whatever remains to make your own stock (which can be used for the couscous as well).
From one meal’s outlay, I’m getting three or four meals, all of which aren’t massive bad for you.
For similar budget type meals, I can recommend The Wolfe Pit on youtube. None are gonna win Michelin Stars, but they’re all pretty tasty, and serve a decent number of people. His vids on budget meals assume the lowest possible budget - so if you’ve got more to spare you can tart them up and make them a bit healthier. But they’re good points of reference for making a meal out of Not Very Much.
If my job pays me, say, 20 currency per hour, and I spend half an hour cooking my own meal from leftovers in order to save 5 currency of food, how much have I really gained there? Sure if I enjoy cooking it's great, but if cooking is just work to me...
Thr value of the time taken is definitely something that needs to be considered, but it's rarely that simple.
Most people can't just choose to work an extra half hour and collect the corresponding pay
Bran Dawri wrote: I'd go one step further than just paying off credit card debt. Stop using them altogether. The entire point of credit cards is for people to spend money they don't actually have.
^There are two problems with this approach (from my own personal experience of having done this for years)
1) credit rating. If you use a credit card like a debit card, i.e. just set it to pay off 100% of whatever you put on it, and don't spend more money than you have, it allows you to build up your credit rating which is how you get to the real money-saving things...like paying off a mortgage instead of pissing away money on rent.
2) most credit cards offer some kind of 'rewards program' that gives you cash back on some kind of purchase.
For years, I was INCREDIBLY fastidious about having zero debt, basically after an extremely lucky college scholarship allowed me to avoid the huge wall of student debt my generation was typically saddled with. I've straight up purchased every car I've ever owned, never ever used multiple payment plans for any expensive item I've ever puchased, and when it came to buying a house, they were basically like
"Welp, you grew up, went to college and got a full scholarship and straight As, graduated with a job and you've been an engineer ever since, you have....nooooooooooooooooooo credit score my dude!"
After having to scrounge together every bill I'd paid and rent check I'd ever written to convince the bank to give me a mortgage, I switched over to a credit card in order to make sure I keep that rating just in case I need it in the future. And I've actually tracked my rewards from that credit card, and over a year I've gotten an extra 2k cash back for basically just...nothing. Buying what I'd normally buy.
So I'd modify this advice with:
-Don't spend money you don't have
-Do have a credit card just so you can keep a good credit score
Automatically Appended Next Post:
Matt Swain wrote: Energy saving bulbs aren't that expensive if you know where to shop. I had this debate with a person who was absolutely incapable of changing his views no matter what once. He claimed that the new ES bulbs were too expensive for poor people to afford and ended with the line "I love using (Sociopolitical view group) arguments to prove (Sociopolitical view group) are wrong about everything." and show a bulb costing 7$.
There were 4 packs of some of the new ES bulbs on sale at my local dollar tree store for a dollar. I bought them, took a pic of the box in my hand and a clearly readable pic of the receipt showing the bulbs were a dollar for 4 and posted it in reply to his message.
These were the older CF bulbs, but they were still a lot more energy efficient than the incandescent ones and lasted longer.
You can get LED bulbs cheaply if you shop right.
Heck, in my state you can get them for free. There was a government program where if you let people come out to your house and point out all the ways you can be saving energy, they'll give you free CF bulbs for every fixture in your house and rebates on a gak ton of energy efficient appliances and stuff. I got 200$ off a tankless water heater, 150$ off some new insulation around my walls, 100$ off a new bay window to replace the old drafty one in the master bedroom, and enough CF bulbs that a year into owning my house I"m through like...a third of them.
It's interesting how much of the advice here is about debt. Makes me feel really lucky to have gotten my university education paid for by other taxpayers and therefore be able to live relatively debt free.
Seems like a huge scam to start people off in debt to me. The main significant debt people take on where I am from is for housing. I still think it is often not a good idea, but probably better than being stuck with the landlord parasites forever.
I think the main way I save money is by liking cheap stuff. I like basic food, I don't eat out much, I'm not very interested in fashion, I don't usually play the latest video games. I've not got a TV or anything like that. I make my own tea and bring it with me in a flask. But really I save very small amounts of money that way. Most of the reasons people struggle with money are structural and are to do with fixed costs like rent along with low wages. Not everyone has the capability to educate themselves out of that, and it's a grim life to look forward to, always threading water and giving a huge chunk of your earnings to a parasite every month.
Get rid of needless luxury like apple products. The Android phone that came out 2 years ago is fine, so is that laptop for 250 $ instead of 1000 $.
Drink water at home, quit drinking sweet soft drinks.Stop going to fast food restaurants. Cook your own food.Keeps your long term health costs down and you won't miss fast food and soft drinks after your reception of taste is back to a normal human level.
Cook your own food.
E.g. make your own pizza. And not just the topping. I mean dough. It's so super easy and way better than everything you can buy to microwave or whatnot.
Per adult: 250g wheat flour, type 00. Crumble half a package of fresh yeast (20g) into lukewarm water, 0,1 l will do the job. Add a little bit of sugar to the water. Then toss it in the flour (gently ), add some olive oil and salt, knead it (or use a machine) for some short time. Should not be too sticky, homogenous mass. If it's to sticky, add a bit of flour, if you can still see some flour after kneading thoroughly, add some water.
Put it in a bowl
Now put a clean kitchen towel on top of that bowl. Start the oven. Very low temp, 40° C.
Let the yeast do its work for an hour or so, you will soon see the result and have a fluffy dough.
Form pizzas from the dough.
Make your own tomato sauce with Sieved tomato, a hint of ketchup, italian spices, garlic, salt, pepper, maybe a dish of red wine or marsala if you have.
Go crazy with toppings
. Set oven to hot as possible. Put in pizza, take it out before its burned to toast.
Granted, you need time for the preparation. But you know what? You can make some pizza dough disks and put in in the fridge and defrost them in no time. Cost of self made pizza is next to two cheeseburgers or less.
Don't be super strict, just strict. Meaning if you really really want to go to Burger King once in a month then do so.
Pay with hard cash whenever possible.
Have one credit card, stay out of debt. If in debt, cut costs down hard, really hard. It will pay off very fast.
Well when I take the time it costs me to make a pizza, factor in how much money I could have made working that time instead, then add in the cost of ingredients, it comes out as a hell of a lot more expensive than buying one.
I do concede the 'cook your own food to save money' argument is decent if one has the extra time & energy sitting around. But then, there's a ton of different things I can do in my own time to make money (painting for commission comes to mind) which STILL make the cooking of my own food ultimately detrimental to my budget.
The true factor at work is if cooking is work to you. If it isn't then that's great, if it is then that's generally more of a money losing tip than a money saving one, because it adds a middle man to the process of converting labor to money.
TBF the best way to save money is to live via foraging and never spend any--if you are dedicated enough to back up the above opinion I assume you won't be posing again
NinthMusketeer wrote: Well when I take the time it costs me to make a pizza, factor in how much money I could have made working that time instead, then add in the cost of ingredients, it comes out as a hell of a lot more expensive than buying one.
Problem with that line of reasoning is that you wouldn't have worked instead of making that pizza. You cook in your free time, not when you are working. I've been working from home since 2012 and never has there been a situation where I had to decide between cooking and working.
If I am cooking it's work. I'm not getting paid, but it's still work. For some people it isn't, which is great for them and a good way to save money. But I, personally, would rather take whatever time I was going to spend making that pizza and do commission painting. In the same amount of time I would earn enough money to buy the pizza and have some left over.
The point is that if a given task is work to you, make sure it is worth your time.
As I jokingly referenced above the 'replace money with labor' line of thinking can be taken much further; why not save even MORE money by growing the ingredients for the pizza yourself? If you aren't in the right climate, build a greenhouse! Don't have glass? Gather some sand and make it yourself! Need wood for a frame? Get chopping! No trees for wood? Travel to where there are some! But don't use a vehicle because gas costs money...
NinthMusketeer wrote: As I jokingly referenced above the 'replace money with labor' line of thinking can be taken much further; why not save even MORE money by growing the ingredients for the pizza yourself? .... But don't use a vehicle because gas costs money...
But, if you can create your own electricity, use an electric vehicle. Don't tie yourself to the extraction of a resource you do not have access to.
Seriously though, electric vehicles are becoming cheaper (see the other threads for that) The extra I spend getting an electric car will pay itself back in around 6 years, compared to the petrol version. That's at last year's prices, when batteries cost more, and petrol prices were what they were. 'Free' charging is a thing these days, and servicing is less than for a car with an engine. Pay more now, and the more you use it, the more you save (by not spending on fuel and parts).
You don’t need to take everything to extreme situations to save some money. Just stepping down a little from the worst case scenario will add a few coins to your pocket.
I can’t remember the last time I ordered a pizza delivered. You can get decent frozen ones from your local grocery store for like half the price. (You can also get bad ones for even cheeper, but I want something that can be distinguished from the cardboard packaging) Less topping options, but still a range.
You can get the stuff to build your own. Blob of dough, sauce, toppings. This might not actually be cheeper then the frozen, but the quality is better, and you have more choices.
Or you can go full from scratch. I make my own red sauce in big lots and freeze most of it. Take it out as needed. Pizza dough is one of the simpler ones to make, just a little effort and time. Heck, you could try your hand at cheese making.
If you have your own garden, great. Nothing beats fresh ingredients. As the old saw goes, the two things money can’t buy are love and home-grown tomatoes. More savings.
It’s the dance of money, labor, and convenience. You can work your job for cash, which lets you buy nice things. You can work in the garden and kitchen, and cook nice things. But most of us are somewhere in the middle.
Da Boss wrote: It's interesting how much of the advice here is about debt. Makes me feel really lucky to have gotten my university education paid for by other taxpayers and therefore be able to live relatively debt free.
Seems like a huge scam to start people off in debt to me. The main significant debt people take on where I am from is for housing. I still think it is often not a good idea, but probably better than being stuck with the landlord parasites forever.
Gwarsh, you think maybe?
Da Boss, I can't think of any potential pitfalls that might come from saddling multiple entire generations with 40,000$+ of debt on average just before they enter their peak spending years - why, that might result in zany statistics like 70% less wealth being in the hands of 20-40 year olds than there was 100 years ago, the birth rate cratering, more people working multiple low level jobs to try and stay alive, home ownership cratering, and entire business sectors being 'killed' by that younger generation not having any money to spend on anything but interest payments and rent.
It's so funny talking to people of my parents generation complain that so many young folks these days are living it up with these unnecessary luxuries like cell phones and netflix when I remember growing up when we had
-A phone plan
-A newspaper subscription
-Multiple magazine subscriptions
-2 monthly car payments
-Cable TV package
-Internet
-Car insurance, homeowners insurance, life insurance, health insurance
And young people these days have
-Cell phone
-internet
-Approx. one streaming service paid for per person on average.
But sure, buy a cheap cell phone, I'm sure that'll fix the problem
NinthMusketeer wrote: If my job pays me, say, 20 currency per hour, and I spend half an hour cooking my own meal from leftovers in order to save 5 currency of food, how much have I really gained there? Sure if I enjoy cooking it's great, but if cooking is just work to me...
I get paid for 35 hours a week, spread as 7 hours over 5 days.
The resultant hourly wage of roughly £19.61 doesn’t become the value of the remaining hours of the week - because I’m just, y’know, doddering about my own business. The only time that changes is if I’m doing “tasks per hour” overtime, such as overflow post (time and half, based on 4 items an hour is pretty tasty, spesh I average 6 per hour). Sadly said overtime hasn’t be available for yonks.
I have to say valuing my time according to my at-work hourly equivalent is really quite an alien concept to me. I mean, where does that logic end? If I’m spending time with my Lass and her daughters, does it set an hourly spend for an equation of that time being worthwhile?
I feel there’s a definite disconnect here between our viewpoints, and fair enough if so.
Automatically Appended Next Post: One of the biggest issues I faced when living on my own (got a flatmate now) is most packaged food is packaged for four or more, or come in too small a portion.
This can lead to food wastage, especially if you get bored of eating the same thing.
The 'treat your non-work hours as their monetary equivalent of work hours' is a useful guide, but don't take it as a rule. If for no other reason, than because it reduces the value of your life to a simple monetary amount.
People think in that manner way too much in America as it is. In which case, if a minimum-wage earner is 'only' worth $15K a year, then theoretically someone could just pay a fine of $15K times the number of work years said minimum wage worker had left until retirement for murdering them...
(Although given the way America handles negligent death caused by employers, doing that might be a hefty improvement...)
Nevelon wrote: You don’t need to take everything to extreme situations to save some money. Just stepping down a little from the worst case scenario will add a few coins to your pocket.
I can’t remember the last time I ordered a pizza delivered. You can get decent frozen ones from your local grocery store for like half the price. (You can also get bad ones for even cheeper, but I want something that can be distinguished from the cardboard packaging) Less topping options, but still a range.
You can get the stuff to build your own. Blob of dough, sauce, toppings. This might not actually be cheeper then the frozen, but the quality is better, and you have more choices.
Or you can go full from scratch. I make my own red sauce in big lots and freeze most of it. Take it out as needed. Pizza dough is one of the simpler ones to make, just a little effort and time. Heck, you could try your hand at cheese making.
If you have your own garden, great. Nothing beats fresh ingredients. As the old saw goes, the two things money can’t buy are love and home-grown tomatoes. More savings.
It’s the dance of money, labor, and convenience. You can work your job for cash, which lets you buy nice things. You can work in the garden and kitchen, and cook nice things. But most of us are somewhere in the middle.
Totally agreed, and explained better than I was trying to.
Automatically Appended Next Post:
Vulcan wrote: The 'treat your non-work hours as their monetary equivalent of work hours' is a useful guide, but don't take it as a rule. If for no other reason, than because it reduces the value of your life to a simple monetary amount.
People think in that manner way too much in America as it is. In which case, if a minimum-wage earner is 'only' worth $15K a year, then theoretically someone could just pay a fine of $15K times the number of work years said minimum wage worker had left until retirement for murdering them...
(Although given the way America handles negligent death caused by employers, doing that might be a hefty improvement...)
I disagree on one point; it would not be reducing the value of life to a monetary amount, it would be increasing it to its monetary amount, because it isn't like we actually value life that highly in the US right now.
Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
Landlords extract value out of the economy. I do productive work, my Landlord hasn't done a tap of work in the entire time I've been living here. I've had one landlord ever who did any work while I lived there, and I exclude him from the categorization of parasite.
The rest of them are just extracting value out of the economy and living off the useful work of others. Most of 'em get into the Landlord game off the back of inherited wealth as well, so it's not like they "worked really hard" to get into that position.
All I'm looking for is for gains through capital to be taxed more than gains through labour. Incentivise useful work over asset hoarding.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
You left out the mortgage and property taxes that the owner has to pay. You also didn't factor in if the owner was doing all of the management or if the landlord was a 3rd party management firm in which case they'd be taking something like a 3% fee. How much did they pay for the building and what is their interest rate, how many units are in the building? Use that info to calculate how much they need to collect monthly from each unit to pay the debt service on the building and to cover the annual tax bill. You also need to consider their occupancy rate, how often were other units vacant? The owners have to pay the mortgage and taxes whether the building has full occupancy or is completely vacant so their rents from occupied units need to cover vacancy rate they forecast for a given year. They aren't going to charge only exactly what they need under full occupancy because then any vacancies would leave them short. I don't know what that number would be but it would be the cost that the bulk of your rent went towards.
Man, sounds like being a Landlord is REALLY tough. They should sell up, let other people own their own homes, and go back to working a job. Just for their own wellbeing.
Shh, PJ. Dont destroy their illusions of oppression...
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Da Boss wrote: Man, sounds like being a Landlord is REALLY tough. They should sell up, let other people own their own homes, and go back to working a job. Just for their own wellbeing.
Have you considered that some people actually want to rent?
I also have a job btw. There are plenty of hard working landlords who care for their property and the tenants. Maybe don't lump everyone into your opinionated stereotype. Also,why should people not be allowed to benefit from a parent who may have provided them with some financial assistance? I don't understand why you're so bitter about people doing what they want with their money.
Generating income in something that's barely been touched upon except the landlord extreme.
If you start early and find a way to generate some passive income, it'll work for the rest of your life whilst you need to do nothing with it.
So as early as you can, get some money invested in stocks and shares. The UK has Stocks & Shares ISAs which give you tax free interest on them, with a funding limit of £20,000 per year.
A few hundred currencies thrown into them when you're 18 will get 50 years of compound interest by the time you retire. So if you can drop a pile of cash into them and top them up regularly you may find that in a few years you've got a big savings pot that's generating decent enough money just by sitting there, from which you can either keep re-investing it, spend the proceeds, or cash parts of it out to pay for cars/houses/whatever.
Pensions is the same deal. I can't remember the cut-off point but I remember reading that paying into a pension fund from 18-25 and then stopping will give you a bigger pension that if you pay into a pension from 35-65. Again, down to compound interest and inflation.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
You left out the mortgage and property taxes that the owner has to pay. You also didn't factor in if the owner was doing all of the management or if the landlord was a 3rd party management firm in which case they'd be taking something like a 3% fee. How much did they pay for the building and what is their interest rate, how many units are in the building? Use that info to calculate how much they need to collect monthly from each unit to pay the debt service on the building and to cover the annual tax bill. You also need to consider their occupancy rate, how often were other units vacant? The owners have to pay the mortgage and taxes whether the building has full occupancy or is completely vacant so their rents from occupied units need to cover vacancy rate they forecast for a given year. They aren't going to charge only exactly what they need under full occupancy because then any vacancies would leave them short. I don't know what that number would be but it would be the cost that the bulk of your rent went towards.
She owns the place, doesn't pay mortgage. You're right, I did forget property taxes. Mine are 500$ monthly, lets again do the ridiculous leap of logic to pretend they're the same in the much shittier place I rented before.
My landlord profited 54,500$ for doing next to nothing.
The landlord was a part of a condo association which I'm sure had some kind of fees. I'm guessing they're not over 10,000$ annually.
Other units were essentially never vacant for more than a month. We found the next tenant for the landlord, so ours wasn't vacant even one month, and we moved in directly on top of the previous tenant.
Boy, I hope someday I get to do a side-job that pays 4,500$ hourly.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
You profit by about £100/month after the mortgage? So whilst you're about breaking even in terms of income/outcome, you're gaining equity in the house for essentially free (because your tenant is paying it)?
You also get any house price inflation benefit.
Admittedly, neither of those would give you a tangible benefit right now, because you'd need to sell the house to access that money, but in the long term breaking even on a buy-to-let mortgage is a pretty good deal.
Perchance you're both forgetting that rents between different regions (let alone countries) vary a lot. Some rentals are going to make money like crazy - say student lets where each student pays full rent but only gets 1 room and a communal bath and kitchen and every other room is a "flat".
Others are going to be in poorer regions with older builds where the rents aren't as high and where the buildings generate more upkeep costs.
And yes there are going to be good landlords who invest back into the property and bad landlords that let half the building fall down and still won't lift a finger.
Queen Ann: I'd just rather support hard working people providing value to others over people who profit from their parents hard work and asset acquisition. Call me a communist, I dunno.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
You profit by about £100/month after the mortgage? So whilst you're about breaking even in terms of income/outcome, you're gaining equity in the house for essentially free (because your tenant is paying it)?
You also get any house price inflation benefit.
Admittedly, neither of those would give you a tangible benefit right now, because you'd need to sell the house to access that money, but in the long term breaking even on a buy-to-let mortgage is a pretty good deal.
He is also taking on board a risk though, bad tenants can cost a landlord thousands, through damage to property, unpaid rent and the costs of attempting to recover these. My step father had tenants growing weed in huge quantities in his loft, and had ripped holes in the walls and ceilings to run the cabling to the lights. You can't begrudge someone making a long term profit when it also comes with the potential for long term stress and anxiety.
He is also taking on board a risk though, bad tenants can cost a landlord thousands, through damage to property, unpaid rent and the costs of attempting to recover these. My step father had tenants growing weed in huge quantities in his loft, and had ripped holes in the walls and ceilings to run the cabling to the lights. You can't begrudge someone making a long term profit when it also comes with the potential for long term stress and anxiety.
That's what landlord insurance and letting agencies are for, though.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
You profit by about £100/month after the mortgage? So whilst you're about breaking even in terms of income/outcome, you're gaining equity in the house for essentially free (because your tenant is paying it)?
You also get any house price inflation benefit.
Admittedly, neither of those would give you a tangible benefit right now, because you'd need to sell the house to access that money, but in the long term breaking even on a buy-to-let mortgage is a pretty good deal.
He is also taking on board a risk though, bad tenants can cost a landlord thousands, through damage to property, unpaid rent and the costs of attempting to recover these. My step father had tenants growing weed in huge quantities in his loft, and had ripped holes in the walls and ceilings to run the cabling to the lights. You can't begrudge someone making a long term profit when it also comes with the potential for long term stress and anxiety.
mmmm, mhmmm, and uh, who tends to have the money to lobby to make the laws surrounding who's liable for damage and illegal acts performed within rented property?
Because in my experience, the person who ends up paying for that is the tenant, unless they end up also going to jail for it as well.
People who break into convenience stores and steal the money in the register also often don't profit very much and are taking on a large amount of risk with the potential for long term stress and anxiety, and they could also conceivably decide to break in and leave money to invest in the property in a low income neighborhood, but I am allowed to begrudge them making a long term profit.
I have a friend (he's 21) who's parents bought him a flat which he now rents out for £900 profit a month.
He also uses it as an excuse to count himself as self employed and write-off most of his expenditures as business expenses on his tax return.
The easiest way to save money is to have money in the first place.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
You left out the mortgage and property taxes that the owner has to pay. You also didn't factor in if the owner was doing all of the management or if the landlord was a 3rd party management firm in which case they'd be taking something like a 3% fee. How much did they pay for the building and what is their interest rate, how many units are in the building? Use that info to calculate how much they need to collect monthly from each unit to pay the debt service on the building and to cover the annual tax bill. You also need to consider their occupancy rate, how often were other units vacant? The owners have to pay the mortgage and taxes whether the building has full occupancy or is completely vacant so their rents from occupied units need to cover vacancy rate they forecast for a given year. They aren't going to charge only exactly what they need under full occupancy because then any vacancies would leave them short. I don't know what that number would be but it would be the cost that the bulk of your rent went towards.
She owns the place, doesn't pay mortgage. You're right, I did forget property taxes. Mine are 500$ monthly, lets again do the ridiculous leap of logic to pretend they're the same in the much shittier place I rented before.
My landlord profited 54,500$ for doing next to nothing.
The landlord was a part of a condo association which I'm sure had some kind of fees. I'm guessing they're not over 10,000$ annually.
Other units were essentially never vacant for more than a month. We found the next tenant for the landlord, so ours wasn't vacant even one month, and we moved in directly on top of the previous tenant.
Boy, I hope someday I get to do a side-job that pays 4,500$ hourly.
queen_annes_revenge wrote: Become a landlord and parasite off renters... That way you can roll around in all the profit you're making. I'm kidding of course..in the real world as opposed to the one inhabited by Reddit lunatics, that money actually goes back into things like insurance and upkeep/repairs to the property or items in it, and covering costs when you have no tenants.
If you do have enough capital to invest in property then you should do so. It's a long term investment that generally pays out well later down the line.
A stocks and shares isa is also worth putting savings into as the interest returns will be much better than a regular isa.
Just for fun, when I left my old place I calculated how much money I'd given my landlord and what they'd done for that money in that time.
Over five years in that location, 1800$ a month means she got 108,000$. Over that time span, she
-Paid the cost of insurance on the property (my insurance in a different area but for a much bigger/more expensive home is about 100$ monthly)
-Paid the cost of heating, because it was a central heating system individual tenants could not control meaning legally THE NANNY STATE wouldn't allow the landlord to pass that cost on. Over my first year paying my own gas bills in a house twice as big I'll have paid about 2500$, so we'll assume that's the number per year to be generous.
-Installed a new refrigerator when the old one broke, a new radiator when one leaked, and a new window when a little gak from our block broke it. Over the five years of living in the location, her and her husband came to the condo to perform some physical task rather than hiring someone to do it a total of six times.
-Hired a professional cleaner twice, once before we moved in, once just after we moved out. Since the second time came out of our security deposit, I know the cost of the first time came out of the security deposit of the previous tenant - that's just her policy on this matter.
Lets imagine a fantastical figure for the fridge, radiator, window, and other minor repair stuff they did - lets say it cost them 5,000$ total. So that means over five years they did approximately 12 hours of work in person, plus whatever it took to manage the bills (pretty much automatic, in my experience) and coordinate the cleaners and showing the place to new tenants after 5 years, they profited 84,500$.
I think parasitism is a relatively fair characterization of that exchange tbh. I'd call selling water bottles in the desert for 1000$ a piece less parasitic.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
Then why the feth you in here pretending to give people financial advice, idiot? Can't even profit off of being a fething landlord, jesus christ. Owning and maintaining a living space is so hard that literally everyone who isn't homeless manages to do it on top of doing their full time jobs I feel so bad for you.
If the owner already paid off the mortgage then that's the source of her profits, having already made decades of payments or having had enough capital to buy it outright in the beginning. Since you were able to find a new renter without much trouble it sounds like you were paying a market rate for your area which would be greatly influenced by property values and debt service payments. Most properties aren't paid off and the debt service and taxes are driven by the value of the property which is largely dependent on local zoning laws. Large multi unit housing buildings are very expensive to build and many locales have ordinances in place to limit the size of buildings and also where they can be built. Those laws create a cap on the number of housing units that can exist in a given municipality and that scarcity drives up demand and value which makes rents high. The value of the apartment or house is independent of whether or not its paid off which is why renters are going to pay roughly the same rent for a 2BR apt in the same city regardless of the age of the building or whether it's paid off or still mortgaged.
It's really easy to understand why QAR doesn't make a huge profit if he's renting space that he's still paying a mortgage on and/or if he's renting space in a market where rates are close to his expenses. Landlords can't just set rents to whatever they want and expect people to rent from them. Landlords need to set competitive rates for their market to attract tenants regardless of their costs. The high market rate rent locations like London and NYC make new construction extremely difficult to profit from which prolongs the housing shortage.
I don't know what you are basing your idea of laws favoring landlords when it comes to bad tenants. I have never seen a market like that. In my state rent is due by the 5th of the month but not considered late until the 10th of the month. Landlords must give tenants 10 days notice before filing for eviction for nonpayment which means the earliest a landlord can file to evict a tenant for nonpayment is the 21st of the month. Once the eviction is filed the landlord and a sheriff's deputy will post the summons for the eviction hearing and then after the hearing the landlord can repossess the rental property. The whole process can take about 6 weeks depending on the date of the hearing. During that time the landlord can't enter the rental property. The landlord or manager could look in the window and see rotting food on counters or dog crap on carpets or any kind of mess or damage but can't do anything to mitigate the damage until after the legal process is finished. Then the only money available to the landlord to cover any cleaning or repairs is the security deposit. The landlord could take the tenant to small claims court but in cases of nonpayment evictions it's unlikely that the former tenant has the money so the landlord would waste money on court proceedings just to be petty and vindictive which is really unlikely. Bad tenancies inflict more consequences on landlords than tenants.
You may want to take a break from aggressive rage posting, it's a bad look for you and it's not good for your health.
I don't think that anybody really thinks that landlords do zero work and have zero risk, that's obviously foolish. I had a high school economics teacher who used to say that the easiest dollar you can make is by owning a bar or renting properties, but he's not sure either is worth the headache. As Prestor Jon pointed out, Landlord tenant law can be complex, varying by state, county, or city, and many courts have unofficial policies which are either landlord or tenant friendly. (here's a hint: places with a lot of short term renters, like student housing or very low income areas, tend to be more landlord friendly since nobody sticks around long enough to vote. Places that have a lot of long term renters are more tenant friendly since the tenants vote).
That being said, owning rental properties is one of the most reliable paths to expanding wealth, even if the income is low. The reason for this of course are the two more boring concepts around: depreciation and step up basis. If you buy a rental property, you can deduct all expenses against any rental income when you do your taxes. Included in that is the mortgage interest you are paying, but not the principle. However, you can deduct what's called depreciation, which is a concept of spreading the tax deduction for a capital expense over many years. For rental houses, that's 27.5 years, which means that each year, you can deduct 3.6% of what you paid (your "basis") from your income. So, if you buy a 100,000 house, every year for 27 years you can deduct $3,600 from your income. This helps to avoid taxes on the money you bring in.
The one downside to deprecation is that it reduces your tax basis on the property, which means that if you sell it, you no longer pay income tax on just the simple profit of Purchase price - Sale price, but instead, you subtract the basis. So, if you fully depreciate a rental house, and you sell it, the whole thing is considered profit, and therefore taxable. Sucks, right?
There's a simply loophole though: die. When you die, not only is your estate transferred without income or estate tax (unless it's quite large), when your heirs receive that rental house, the tax basis is reset to fair market value. So, you can buy that rental house for 100,000, deduct the full purchase price against your income, and then, when you die, and the house is now worth $400,000, your heir can sell the whole thing and not pay a penny in tax.
this is obviously a long haul proposition, and it's the sort of exploit that only makes sense for people with a networth high enough they can buy rentals but low enough to avoid estate tax, but It's a powerful tool.
I earn about £100 in profit per month on the house I rent. That's 1200 a year. My land lord tax is about 250. Various yearly inspections and checks probably take another 3-500, leaving me about 400 to cover any repairs for the entire year. So yeah, I very rarely actually make any profit.
You profit by about £100/month after the mortgage? So whilst you're about breaking even in terms of income/outcome, you're gaining equity in the house for essentially free (because your tenant is paying it)?
You also get any house price inflation benefit.
Admittedly, neither of those would give you a tangible benefit right now, because you'd need to sell the house to access that money, but in the long term breaking even on a buy-to-let mortgage is a pretty good deal.
I'm aware of that. There has to be a benefit, otherwise I wouldn't be doing it. That will provide the deposit for the house my family eventually decide to live in when I leave the military. That's the financial upside for those who have the means to do so, hence I consider it valid money saving advice. You're saving for the future.
It's pointless trying to convince these folks that landlords arent bad by definiton. They are unable to get into their heads that some people may invest in property as a way to ensure financial security for their future and/or that of their kids, and instead refuse to look past their caricaturish vision of some sort of Scrooge character counting his cash while his tenants live in misery. It's laughable
If you've inherited property and rent it out, you're an economic parasite. Just by owning your own house and having two more feeding you annual income, you can quite literally put your feet up and never work a day. You contribute nothing to the economy except draining the earnings of people who weren't fortunate enough to be born into as good a position; those who have to be productive to meet the basic survival need for shelter, but lack good enough credit to get a mortgage.
If you've taken out a mortgage on a property which you rent out, things are a little more complex. You're basically hoping to redirect the earnings of other people with worse credit than you through your bank account to the lender; whilst continuing to accumulate equity in the property. It's still pretty leech like, because you're not paying for the property, the renter is. Any repair bills, taxes, and so forth are inevitably paid for by the renter (even if routed through the landlord's account first). But the landlord does have to put in a bit of work to facilitate it all and assumes a degree of risk to their credit (which the inheritor does not).
The end goal however, is to end up in the position of the person who inherited their wealth; whereby you do it for long enough that you own the propert(ies) and can then keep all the income for yourself for relatively little work. In other words, to transition to being a non-productive economic parasite. And then ideally to pass that down to your children, because you don't want them to have to struggle at all.
In my experience, landlords who deny this are reacting angrily to the negative social and cultural connotations to the words 'parasite' or 'leech'; rather than taking serious issue with the literal definition of the words (in which use I am deploying them above). They feel that words like these are judgemental and have negative moral connotations attached. Which they do. And your average small-time 'buy-to-rent' landlord is just trying to establish themselves well enough financially for they and their families own security, rather than Scrooge McDucking it up.
Ultimately, the entire basis of capitalist society is about exploiting whatever leverage you can for personal gain. So anyone in the West who judges landlords too harshly on a moral account is probably a hypocrite who has never considered how they themselves likely exploit others to some degree, whether directly or indirectly. If you don't like it, you can always go live in a forest somewhere, or move to a country with a higher degree of socialism worked into the economic fabric. Likewise, if landlords really don't agree with the exploitation of the lesser well off that their commercial position demands, they can always sell up and buy bonds or something.
EDIT:- Thinking some more about it, I suppose the problem is that it's much harder to opt out when you're the renter than when you're the landlord. Your average renter doesn't get a choice but to either rent, or go off grid and live like a 19th century peasant in Tsarist Russia. Someone who has enough money and credit to get mortgages has a wealth of alternative options for investment though. So if a person chooses to invest a field which grants higher returns in exchange for a higher degree of social exploitation, is that something worth judging someone for? I suppose I'll leave that one to the philosophers.
I'm aware of that. There has to be a benefit, otherwise I wouldn't be doing it. That will provide the deposit for the house my family eventually decide to live in when I leave the military. That's the financial upside for those who have the means to do so, hence I consider it valid money saving advice. You're saving for the future.
It's pointless trying to convince these folks that landlords arent bad by definiton. They are unable to get into their heads that some people may invest in property as a way to ensure financial security for their future and/or that of their kids, and instead refuse to look past their caricaturish vision of some sort of Scrooge character counting his cash while his tenants live in misery. It's laughable
I don't disagree; I'm just pointing out that you're not doing it for charity. You're setting up a pretty reasonable nest egg and taking advantage of the economic situation. I'd do the same thing. Why wouldn't you get someone to pay your mortgage for you?
Whilst there are plenty of landlords out there that are decent and small scale (quite often when 2 single property owners marry they'll keep both properties and rent one out), there are also plenty of pretty awful landlords who really do give the bad name. As a student, I rented a dive of a place from a landlord who owned 50 apartments in the city, acquired over about 50 years and all pretty much run into the ground because he didn't want to waste money maintaining properties he'd paid off years earlier. When they became too bad to rent out he'd just sell them.
In the building we stayed in, there were 8 apartments 3 of which were owner occupied and the other 5 landlord owned. The owner occupiers often complained about how it was essentially impossible to get the landlords to pay a penny towards any communal repairs like the roof.
Ketara wrote: If you've taken out a mortgage on a property which you rent out, things are a little more complex. You're basically hoping to redirect the earnings of other people with worse credit than you through your bank account to the lender; whilst continuing to accumulate equity in the property. It's still pretty leech like, because you're not paying for the property, the renter is. Any repair bills, taxes, and so forth are inevitably paid for by the renter (even if routed through the landlord's account first). But the landlord does have to put in a bit of work to facilitate it all and assumes a degree of risk to their credit (which the inheritor does not).
A big part of it is that most people looking for long-term residence wouldn't voluntarily give up ownership/equity in exchange for avoiding that credit risk; it's imposed on them. Avoiding credit burden is a benefit, but for long-term renters an extremely minor one compared to a massive loss of value. Even in this case of renting out a mortgaged property, the landlord is gaining the equity that an owner would otherwise be gaining, and that represents a substantial profit. It's not a relationship tenants seek out so much as one imposed on them by property owners having an advantageous position.
A middleman that inserts themselves into the limited market for a fundamental need and extracts value from tenants who, given the choice, would rather just buy the property themselves and deal with the banks directly? Go figure they're commonly viewed as parasites.
An example of renting that provides tangible value would be a hotel, where 'tenants' don't want to have to buy and sell the property they inhabit for a few days or weeks, so having someone else keep the equity is an acceptable tradeoff. People don't hate hotels the way they hate landlords.
Mad Doc Grotsnik wrote: This reminds me....Lidl, possibly Aldi, have opened up near me. Same shopping bit as Sainsbury’s, just the other side of the carpark.
Gonna go check it out, as I’m in the mood for some fresh fruit. Might as well go to the cheaper shop, because fruit is fruit is fruit.
Also worth having a nose around in general.
Sainsburys have gone right downhill over the last twenty odd years. All the fixtures are old and cracked, the quality of the home brands has dipped to gak, and the staff has started acquiring that mildly suicidal vibe that the bottom end supermarket workers all have. They're not really any better than Asda/Lidl/Aldi any more. And the two latter ones usually beat them on price.
The trick is to buy your fruit and veg at Lidl/Aldi, because it comes off the same boats/fields, costs less, and tastes the same as the upmarket places. Get your tinned, frozen, and non-perishable ranges/goods from Tesco or Iceland (they have the best deals with those sorts of manufacturers). Tesco's Finest range are also the best value for half-decent ready meals. Then get your fresh meat, dairy, and bakery goods from Waitrose (good ethics and best quality for price).
That's the best equation for value/quality. Every time I've stepped outside it, things have gone wrong. Tesco chickens are flavourless battery gak injected with water that shrivel. Waitrose veg comes from the same farms as the Aldi ones most of the time, but they double the price. Aldi doesn't sell any bread that wouldn't survive nuclear fallout. You get the idea. If you're shopping at Marks and Spencer, you're basically paying Waitrose plus 20%, and if you're shopping at Asda or Sainsburys, you could buy whatever you're getting there for 10% less at another budget supermarket.
The people banging the drum on the evils of landlords seem to be forgetting a few things.
First, there's an entire segment of the population that can literally only afford to rent a single room in a shared rental house or apartment. Take landlords out of the picture and those people are on the street. Whether through circumstance or from bad decision making, this group CANNOT afford to own their own home. If you were left with only home owners renting one room of their own house, it would not be enough, because few people who own their own home want to rent a room to a stranger. It's much more acceptable to rent a house you don't live in to a group of strangers.
Second, there's another segment of the population that doesn't want to own. Someone who is working a new job, contract job, a university student or other transient people don't want the hassle of buying, owning then selling the home on a short term basis. In fact, with real estate fees this could be a serious money loser in the short term. So renting, even at above the cost to pay a mortgage, taxes and utilities, still makes economic sense for these people. I have older relatives that sold their homes to free up capital and rent during their retirement, and it's probably a path I'll have to take myself in my later years.
Obviously renting is a bad option for a lot of people. But it does fulfill the needs of a segment of the population. I'd much rather see the government incentivize high density rental (apartments) over owning rental houses to free up houses and make them more affordable to the average person, or at least make basement apartments less of a hassle to increase the supply of rental units to depress the cost of renting to something more realistic.
First, there's an entire segment of the population that can literally only afford to rent a single room in a shared rental house or apartment. Take landlords out of the picture and those people are on the street. Whether through circumstance or from bad decision making, this group CANNOT afford to own their own home.
I'm sorry, but this is utter rubbish and reads like some Edwardian Scrooge caricature opinion.
'Landlords need to rent room, or else where would poor people live? On the street, dammit! Why aren't they more grateful!?'
Think about the economic effect on the housing market of restricting the ability of people/companies with lots of money to buy multiple residential properties. The houses won't vanish, and nor will construction. What would happen is that demand from the wealthiest would vanish, thus lowering the price barrier for buying property to something far more affordable to that excluded segment you're talking about. If property is a tenth of the price, then that 'entire segment of the population' you're talking to would be far more capable of purchasing it. It's basic supply and demand economics. If you outlawed purchase of residential property units by anyone who already owned two of them tomorrow; the bottom would fall out of the property market so hard it would smash through the Earth's crust. Harder and faster still if you forced existing landlords to sell up, there'd be a sudden massive glut on the market.
I'm not advocating this, but making the point that the drive of the well off to accrue still more wealth is the primary engine behind the ridiculous house prices you see today. It's not the minor population increase over the last thirty years, or that the land has become intrinsically more 'valuable'. It's supply and demand economics. Property bestows wealth and income, so everyone chases it. Remove the profit incentive, and the price will plummet. If the Government built more social housing for the poorest segment of long term renters, rental prices and mortgages would also plummet in turn (as they'd have to compete with council house rents).
No Government wants to do anything like this however, because the ripple on effects to the economy would be extreme.
Second, there's another segment of the population that doesn't want to own. Someone who is working a new job, contract job, a university student or other transient people don't want the hassle of buying, owning then selling the home on a short term basis.
I don't think anyone has said that transients should be buying the property they're in for three months or so.
What is interesting is the number of llandlords switching rental properties to Airbnb, as a way of circumventing tenant rights and functioning as semi-hotels for rapid churn and burn and maximum profit. In many cities, this is actually now inflating rental prices, as it reduces the amount of property available for rent in the normal manner.
Ketara wrote: [
I'm sorry, but this is utter rubbish and reads like some Edwardian Scrooge caricature opinion.
'Landlords need to rent room, or else where would poor people live? On the street, dammit! Why aren't they more grateful!?'
You honestly think that if there were no landlords, that houses would be so cheap that anyone could buy one? Landlords owning stuff doesn't drive up the price of lumber, concrete, plumbing or wiring. Houses cost money to build regardless of the value of the land it sits on.
You underestimate how irresponsible some people can be. I've worked with people in a full time job that paid decently and they blew all of it every week, even though they had plenty of cash to spare because they chose to live six to a house and thus their rent payments were negligible. It wasn't "I can't afford rent" or "I can't afford a mortgage", it was "I want to own a nice car and party all weekend".
It would be wonderful if every person who was willing to be responsible could own their own home. I acknowledge that we're not there and there are things that could be done to rectify it - you mention AirBNB and it should be flat out banned. But even if it were so, you'd still have people renting for a variety of reasons, some good, some bad.
People also seem to be ignoring the underlying problems like wage stagnation and the artificial scarcity of housing driving up prices. I don't know what's common in other countries but in the US the majority of residential rental properties are multi unit buildings not single family homes. I wouldn't want to rent out my parents' house when they die, it's not even in the same state as me it would be a huge headache.
With multi unit buildings you could turn them into condos or co-ops if the tenants could afford it but even then their rents really wouldnt change much because the debt service, taxes and upkeep costs really wouldn't change.
More housing would help but its also extremely expensive. First, with zoning there's only certain places you can put multi unit housing and those places are usually already full of multi unit housing. If zoning permitted it somebody could buy a 10 unit building, pay to demolish it, then pay to construct a 20 unit building in its place. That would cost a lot and the rental rate for the rooms in the 20 unit building would be about the same as it was for the 10 unit building which is a disincentive. That also doesn't take into consideration the political pitfalls of gentrification, environmental impact and re-zoning. The actual landlords and owners have very little to do with creating the market they exist in.
Prestor Jon wrote: With multi unit buildings you could turn them into condos or co-ops if the tenants could afford it but even then their rents really wouldnt change much because the debt service, taxes and upkeep costs really wouldn't change.
In theory, the overall costs at signing might not change- assuming the profit-skimming of a landlord is replaced with PMI by a lender to protect their investment- but the tenants would earn equity, which is important in facilitating upward mobility. Living ten years in one place and then walking away with a few tens of thousands of dollars versus walking away with nothing makes a huge difference.
In practice, the costs aren't the same anyways. I know what my mortgage costs me right now, and I know what it'll cost next year, and what it'll cost in ten years. The amortization schedule was locked in when I signed the paperwork. But in every rental property I've been in, when my one-year lease was coming to an end, it was time to renegotiate. And usually that meant the price going up, and I had to weigh whether the increased price was worth avoiding the hassle of relocating. That kind of long-term instability can be devastating to people already living on the margins.
Most people don't actively go seeking a landlord for long-term residence. They're an imposition; the wealthy leveraging their position of ownership within a closed system to siphon profit from the poor and middle class.
I think there would definitely still be a market for short term renting, say rarely more than a year.
But I absolutely agree that many people are stuck renting when they can't afford to buy a house, meaning that that money is completely lost vs accruing in property ownership.
Prestor Jon wrote: With multi unit buildings you could turn them into condos or co-ops if the tenants could afford it but even then their rents really wouldnt change much because the debt service, taxes and upkeep costs really wouldn't change.
In theory, the overall costs at signing might not change- assuming the profit-skimming of a landlord is replaced with PMI by a lender to protect their investment- but the tenants would earn equity, which is important in facilitating upward mobility. Living ten years in one place and then walking away with a few tens of thousands of dollars versus walking away with nothing makes a huge difference.
In practice, the costs aren't the same anyways. I know what my mortgage costs me right now, and I know what it'll cost next year, and what it'll cost in ten years. The amortization schedule was locked in when I signed the paperwork. But in every rental property I've been in, when my one-year lease was coming to an end, it was time to renegotiate. And usually that meant the price going up, and I had to weigh whether the increased price was worth avoiding the hassle of relocating. That sucks.
Most people don't actively go seeking a landlord. They're an imposition; the wealthy leveraging their position of ownership to siphon profit from the poor and middle class.
I've rented before and I've had good landlords and bad landlords. I've worked for property management companies and some were good and some were shady. Typically, if every time your lease is up your rent increases with the next lease that's market driven because demand is going up so rates are going up. Rental rates are basically The Ultimatum Game. Vacancies always cost you money so driving tenants away with high rents or sitting on empty units waiting for somebody to be willing to pay the rent your asking for is never good. If the market rate has increased, whether because population is growing in your municipality driving up demand, or your building/complex has made capital improvements adding value, or the desirability of the location of your apartment has increased. Again, bad landlords certainly exist but a rental property without renters is just a colossal expense.
Equity is always good but if you're only dealing with 10 years or less you are unlikely to see a lot of growth in it. It will depend upon the terms of the loan and the size of the down payment but after only 10 years or less you'd have barely made a dent in the principal. People like to say the old adage of homes appreciate at 3% a year but recent financial upheavals have really slowed that down. Our house has appreciated 20% from when we bought 20 years ago and if we sold it tomorrow for its current assessed value our profit would be less than what we paid for the house. Obviously that's a lot better than renting and having nothing but its not enough of a windfall to get us another house without considerably downsizing or moving a fair distance away.
Providing housing for people is just as exploitative as providing any other good or service to people. Grocery stores aren't parasitically siphoning wealth from the poor and middle class by being exploitative middle men selling them food. The biggest problem is that wages aren't tied to productivity the way they should be which leaves a lot of people working hard for a long time without really accumulating any wealth. Most people aren't invested in the stock market and don't earn a high income so even when renting is cheaper than a mortgage it isn't enough of a savings to really pay off over time.
You honestly think that if there were no landlords, that houses would be so cheap that anyone could buy one? Landlords owning stuff doesn't drive up the price of lumber, concrete, plumbing or wiring. Houses cost money to build regardless of the value of the land it sits on.
How do you think all the boomers bought houses? Even thirty years ago, I could buy a one bed flat in south London for £25,000. Now? I'm looking at ten times that. And that's not because of inflation, or because building costs have gone up. The population growth figure isn't suddenly outstripping the new housing built to a vast degree either, is it? There is absolutely no material reason for the vast, vast increase in property price over the last fifty years.
The reason that my £25,000 flat now costs £250,000 is supply and demand. Simple as that. There are investors from around the world desperate to sink their money into the London property market, and local buy-to let landlords desperate to do the same. And why? Because it's a solid financial investment. The foreigners want somewhere to stash their cash (diversifying portfolios or laundering dirty money usually), and the locals want to leverage their credit to build an investment portfolio. Both want to see a commercial return well above inflation, and this is one of the best ways to do it.
Unfortunately, due to them all scrambling over each other to buy property, the market has completely overheated. Which brings in even MORE people with the same idea, because the values only go up. Not only does your renter pay your expenses, the ever-increasing value of the property adds a second line of investment value gain.
Unfortunately, this means that all those without properties and forced into long term renting get to pay ever larger sums; sums which mean they struggle to scrape together a large enough deposit to buy their own. Instead, the economic value and output of three out of their five days a week of work goes into the landlord's long term investment plan. It's one of the primary reasons behind the widening gap of the 'haves' and 'have nots' in the UK. It's less extreme in other parts of the country, but the same forces are still at play. The people who have sufficient money to play the property game accrue ever larger sums, and the people at the bottom find it ever-increasingly more challenging to break out from under their thumb.
This is the point at which the government should intervene. But they don't, because it causes ructions in the economy and there are a lot of very wealthy donors who own a lot of land. They'd rather fiddle and freeze the prices on bus fares for a year or something else equally petty.
You honestly think that if there were no landlords, that houses would be so cheap that anyone could buy one? Landlords owning stuff doesn't drive up the price of lumber, concrete, plumbing or wiring. Houses cost money to build regardless of the value of the land it sits on.
How do you think all the boomers bought houses? Even thirty years ago, I could buy a one bed flat in south London for £25,000. Now? I'm looking at ten times that. And that's not because of inflation, or because building costs have gone up. The population growth figure isn't suddenly outstripping the new housing built to a vast degree either, is it? There is absolutely no material reason for the vast, vast increase in property price over the last fifty years.
The reason that my £25,000 flat now costs £250,000 is supply and demand. Simple as that. There are investors from around the world desperate to sink their money into the London property market, and local buy-to let landlords desperate to do the same. And why? Because it's a solid financial investment. The foreigners want somewhere to stash their cash (diversifying portfolios or laundering dirty money usually), and the locals want to leverage their credit to build an investment portfolio. Both want to see a commercial return well above inflation, and this is one of the best ways to do it.
Unfortunately, due to them all scrambling over each other to buy property, the market has completely overheated. Which brings in even MORE people with the same idea, because the values only go up. Not only does your renter pay your expenses, the ever-increasing value of the property adds a second line of investment value gain.
Unfortunately, this means that all those without properties and forced into long term renting get to pay ever larger sums; sums which mean they struggle to scrape together a large enough deposit to buy their own. Instead, the economic value and output of three out of their five days a week of work goes into the landlord's long term investment plan. It's one of the primary reasons behind the widening gap of the 'haves' and 'have nots' in the UK.
You underestimate how irresponsible some people can be. I've worked with people in a full time job that paid decently and they blew all of it every week,
Sorry, what? They can afford rent, but not a mortgage? Even though mortgage payments are often lower than rent? How does that work? This entire line of reasoning is a logical fallacy from the get go. Either they're so dirt poor that they can't afford to pay for accommodation - in which case they can't afford a mortgage either. Or they can afford both. The only thing that stops them is the deposit and the credit check.
If I can afford £800 pcm in rent, I can afford £800 pcm in mortgage repayments. There's no scenario in which the £800 (or whatever figure) magically melts away when I change the purpose. Homeless people don't get given free houses for token rent that they could never afford on a mortgage. Not unless they're given a council house, and therein lies the nub of the issue.
The reason rental properties are such a good investment in London is because London doesn't have enough housing. Creating more housing in London is extremely difficult financially politically so the shortage continues, the market gets more skewed and the rich get richer. As long as rich donors exert more influence than voters the priorities of the politicians won't change and the city won't be governed in the best interests of its current and future residents. It's not because property owners and landlords colluded to triple the market rate for rent because they can't. If that was possible every city in the world would have the same situation. Low income housing has low margins, it will never give a decent ROI in an area with high property values like London, which is why only governments create it either directly or through subsidies. Higher wages and more housing will force the market to drop no matter what landlords and owners want, because they don't control the market.
You honestly think that if there were no landlords, that houses would be so cheap that anyone could buy one? Landlords owning stuff doesn't drive up the price of lumber, concrete, plumbing or wiring. Houses cost money to build regardless of the value of the land it sits on.
In Edinburgh, it was hellish for a while trying to buy any flats because the landlords would sweep in and offer £50-100k over the asking price, cash. Since cheaper/smaller "starter" properties are the best investment it made incredibly hard for first time buyers to get on the market.
Mad Doc Grotsnik wrote: This reminds me....Lidl, possibly Aldi, have opened up near me. Same shopping bit as Sainsbury’s, just the other side of the carpark.
Gonna go check it out, as I’m in the mood for some fresh fruit. Might as well go to the cheaper shop, because fruit is fruit is fruit.
Also worth having a nose around in general.
Be careful with Aldi; you can save a few £ on fruit but then spend £50 on random stuff in the middle.
We tend to find the Aldi fruit doesn't last quite as long as the Tesco, so be careful when selecting it.
I'm not advocating this, but making the point that the drive of the well off to accrue still more wealth is the primary engine behind the ridiculous house prices you see today. It's not the minor population increase over the last thirty years, or that the land has become intrinsically more 'valuable'. It's supply and demand economics. Property bestows wealth and income, so everyone chases it. Remove the profit incentive, and the price will plummet. If the Government built more social housing for the poorest segment of long term renters, rental prices and mortgages would also plummet in turn (as they'd have to compete with council house rents).
No Government wants to do anything like this however, because the ripple on effects to the economy would be extreme.
The cynic in me says that no Government would do it because MP's are about 8x more likely to be landlords than the general public (at about 1/3rd of them). Unsurprisingly biased towards the Conservatives at about 40% of them making money from rentals.
There would be horrible effects across the board though, as lots of pension funds have invested in property too, so we'd need to gradually ease of the notion of property as income.
The reason rental properties are such a good investment in London is because London doesn't have enough housing. Creating more housing in London is extremely difficult financially politically so the shortage continues, the market gets more skewed and the rich get richer. As long as rich donors exert more influence than voters the priorities of the politicians won't change and the city won't be governed in the best interests of its current and future residents. It's not because property owners and landlords colluded to triple the market rate for rent because they can't. If that was possible every city in the world would have the same situation. Low income housing has low margins, it will never give a decent ROI in an area with high property values like London, which is why only governments create it either directly or through subsidies. Higher wages and more housing will force the market to drop no matter what landlords and owners want, because they don't control the market.
I never mentioned collusion between landlords and property owners, directly or indirectly. Where did you get that from? I'm arguing that these are largely natural market forces in play here, not corruption or collision. Supply and demand.
I repeat, changes in the population size vs properties available and normal inflation are nowhere near sufficient to cause a jump in value from £25,000 to £25000 in the space of twenty five years. What has primarily raised the prices for purchase (and therefore the rents) to that staggering level is the fact that everybody wants to buy and let in London. They want this because it gives top returns in both rental income and property rise value. When everyone wants to buy and supply is limited, prices go up. Every house a landlord buys to let helps to raise and keep high house prices, because it takes a house off the market for a first time buyer and adjusts the S/D equation (however infinitesimally).Ergo, if you removed all the buyers who are speculating for financial return, you cut down the number of available buyers vs available properties, and the prices will begin to go down.
Supply and demand, the fundamental forces of the market. I'm not sure what there is to argue with on this. You seem to be saying that the only way to lower prices is to increase supply. But that just alters the same equation at the opposite end. You either increase supply, or reduce demand. And landlords, in this scenario, make up about 50% of the demand (according to current London market stats). You slash half of the demand away, and prices will plummet, just as much as they would if you increased supply by that much.
I think we may just be saying the same thing from opposite ends of the market. Whether you slash demand or increase housing drastically, the net result is the same.
The cynic in me says that no Government would do it because MP's are about 8x more likely to be landlords than the general public (at about 1/3rd of them). Unsurprisingly biased towards the Conservatives at about 40% of them making money from rentals.
There would be horrible effects across the board though, as lots of pension funds have invested in property too, so we'd need to gradually ease of the notion of property as income.
There is a natural bias in Parliament towards fiddling whilst Rome burns on this because they all tend to have personal stakes in it. Virtually all MP's own at least one property, the value of which would drop if they embarked on massive house building. So they mouth something about increasing housebuilding, safe in the knowledge that it'll never happen anywhere near sufficiently to stop their own investment climbing in worth.
We would need a genuinely socialist government to change things, and I don't see that in Labour or Lib Dems. The sort of working class politicians with working class concerns like those which came into power post-WW2 are long gone. Instead we get champagne socialists who like to fantasize about communism or middle-class neoliberals unable to see beyond their own noses and meaningless well-wishing. No-one anywhere is seriously advocating for large scale house building, or making dentistry free, or cracking down on the gig economy.
I'll cut off there though, because I'm veering into politics.
The reason rental properties are such a good investment in London is because London doesn't have enough housing. Creating more housing in London is extremely difficult financially politically so the shortage continues, the market gets more skewed and the rich get richer. As long as rich donors exert more influence than voters the priorities of the politicians won't change and the city won't be governed in the best interests of its current and future residents. It's not because property owners and landlords colluded to triple the market rate for rent because they can't. If that was possible every city in the world would have the same situation. Low income housing has low margins, it will never give a decent ROI in an area with high property values like London, which is why only governments create it either directly or through subsidies. Higher wages and more housing will force the market to drop no matter what landlords and owners want, because they don't control the market.
I never mentioned collusion between landlords and property owners, directly or indirectly. Where did you get that from? I'm arguing that these are largely natural market forces in play here, not corruption or collision. Supply and demand.
I repeat, changes in the population size vs properties available and normal inflation are nowhere near sufficient to cause a jump in value from £25,000 to £25000 in the space of twenty five years. What has primarily raised the prices for purchase (and therefore the rents) to that staggering level is the fact that everybody wants to buy and let in London. They want this because it gives top returns in both rental income and property rise value. When everyone wants to buy and supply is limited, prices go up. Every house a landlord buys to let helps to raise and keep high house prices, because it takes a house off the market for a first time buyer and adjusts the S/D equation (however infinitesimally).Ergo, if you removed all the buyers who are speculating for financial return, you cut down the number of available buyers vs available properties, and the prices will begin to go down.
Supply and demand, the fundamental forces of the market. I'm not sure what there is to argue with on this. You seem to be saying that the only way to lower prices is to increase supply. But that just alters the same equation at the opposite end. You either increase supply, or reduce demand. And landlords, in this scenario, make up about 50% of the demand (according to current London market stats). You slash half of the demand away, and prices will plummet, just as much as they would if you increased supply by that much.
I think we may just be saying the same thing from opposite ends of the market. Whether you slash demand or increase housing drastically, the net result is the same.
Yeah I quoted your post because I wanted to expand on it not because I was trying to argue against it. I think we are in agreement that the housing market in London has been artificially skewed and that the government doesn't have the will to change it.
I think finding the political will to make the needed changes is the hardest part. The financial problem isn't that big. Committing to creating abundant affordable housing would signal to the banks that rental rates will plunge and they need to write down a lot of rental property loans. Acknowledging that property values have decreased and reassessing values and writing down the mortgages to reflect the new reality still allows for everyone to benefit. The banks will still make money off the loans, just less money, owners will still make money off of rental properties, making $100 off of a $600 monthly rent isn't as nice as making $200 off of a $1200 monthly rent but it's a lot better than having your property foreclosed for nonpayment when rents drop but your mortgage doesn't. They'll be a competitive market for renters between government housing and privately owned rentals, different locations, different amenities but sane rates. The problem is that banks would rather force the foreclosures, inflict the economic pain and damage in exchange for the opportunity to buy those properties for pennies on the dollar and resell them for massive profit. Which is when you need principled politicians with a spine to call on the bank CEOs and boards and tell them not to be fethwits and crash the economy because the government has popular support for this and it's happening.
You honestly think that if there were no landlords, that houses would be so cheap that anyone could buy one? Landlords owning stuff doesn't drive up the price of lumber, concrete, plumbing or wiring. Houses cost money to build regardless of the value of the land it sits on.
How do you think all the boomers bought houses?
Here's an article about the subject. https://www.apartmentlist.com/research/homeownership-by-generation. At the low end of the income spectrum, home ownership rates are virtually identical across generations. Boomers had better rates in the middle and higher income brackets, but poor people have always had low home ownership rates.
Even thirty years ago, I could buy a one bed flat in south London for £25,000. Now? I'm looking at ten times that. And that's not because of inflation, or because building costs have gone up. The population growth figure isn't suddenly outstripping the new housing built to a vast degree either, is it? There is absolutely no material reason for the vast, vast increase in property price over the last fifty years.
Don't forget that governments have vastly increased the money supply as well in the last 20 odd years. Of course, most of that new money didn't go towards the lower income brackets. Rich people, generally being financially literate, realized how dangerous this is - it works so long as the rest of the world is willing to hold your currency as a reserve, which is why the USD hasn't seen massive inflation. But it does mean that your currency could devalue very, very quickly. But you know what doesn't devalue quickly and people will sell you for money? Land. So it's not just foreigners dumping money into safer havens, the locals are doing this as well
As to how someone can afford rent but not a mortgage, it's fairly simple. If a house costs 2400 a month to rent, you get 4 people together and split the rent. Now it's 600 a month for each person. You don't get a house to yourself, but it's way less than a mortgage payment. This is pretty common practice where I live, though it might be different in the UK - lower availability of multi-bedroom houses, I imagine.
I think the problem for most people getting mortgages, at least here in the UK is getting enough money for the deposit. After that, if you can afford to rent, you can generally afford to own.
I've had 2 different families rent my house for 3-4 years, before leaving to buy their own houses after saving for their deposit. This part of renting is also overlooked by the 'landlords are parasites' crowd.
I also know a fair few people who say they don't want to own a property and would rather rent and not have the issues that come with property ownership, and want the convenience of being able to move on a whim.
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Ketara wrote: If you've inherited property and rent it out, you're an economic parasite.
So people shouldn't be able to do what they wish with what they own?
What do you propose as an alternative? Should they have that property removed, by force? Should they be forced to provide housing for someone?
Don't forget that governments have vastly increased the money supply as well in the last 20 odd years. Of course, most of that new money didn't go towards the lower income brackets. Rich people, generally being financially literate, realized how dangerous this is - it works so long as the rest of the world is willing to hold your currency as a reserve, which is why the USD hasn't seen massive inflation. But it does mean that your currency could devalue very, very quickly. But you know what doesn't devalue quickly and people will sell you for money? Land. So it's not just foreigners dumping money into safer havens, the locals are doing this as well
I made a point of collating both foreign and domestic investors together in making my points about people buying up land here in London.
As to how someone can afford rent but not a mortgage, it's fairly simple. If a house costs 2400 a month to rent, you get 4 people together and split the rent. Now it's 600 a month for each person. You don't get a house to yourself, but it's way less than a mortgage payment. This is pretty common practice where I live, though it might be different in the UK - lower availability of multi-bedroom houses, I imagine.
Yeah, no, I realised that was what you were talking about. It's why I deleted that part of my post within about five minutes early yesterday evening. Frankly, I'm surprised to see a response to it today! Did you leave that page open overnight or something?
So people shouldn't be able to do what they wish with what they own?
What do you propose as an alternative? Should they have that property removed, by force? Should they be forced to provide housing for someone?
We already do the former. It's called inheritance tax. The problem with it is that it doesn't work on the wealthy (everything gets shoved into trusts) or corporate entities, or the upper middle classes (they put everything into the name of offshore held shell companies controlled by whoever they want to inherit). The only people it hits are the ones who own two or maybe three properties, who aren't wealthy enough to make alternative arrangements worthwhile. If you've got a portfolio of fifteen houses to pass down, no way you're getting bitten by inheritance tax. You go to your accountant, pay him a few thousand pounds, and he makes an arrangement with a nice gentleman called Pedro in Monaco or the Canary Islands or somewhere.
I think tightening up of inheritance tax law and restrictions on purchasing residential zone properties (i.e., if you've got three, you can't buy any more) might work. It would begin dulling the market immediately without crashing it, and would slowly bring the prices down over time. I believe such things have been tried in other overheated markets. It wouldn't be an automatic panacea, but it would start reversing house prices rather than raising them. The main problem would be the vast domestic faribbles emanating from those who are unhappy their investment asset is now worth less rather than more; especially if they're still locked into a mortgage at the old price.
People don't like social justice or reorganisations if it costs them money personally. And sadly, declining house prices would probably hit every member of Parliament in the pocket. And that's why it'll never happen. Like I said, the working class (non-land owning) majority administration you saw under Attlee will never happen again.
Once your contract is nearly, talk with your internet or mobile provider and threaten to leave. 9 times out of 10, they’ll offer you a better deal to stay with them.
Tiny bit of arseache to do the call (and you do need to speak with them), and bingo, a better deal almost certainly offered.
Car Insurance much the same. Always shop around, and reveal the deal you’ve found to your current insurer. Chances are they’ll match it. And, if you possibly can, pay up front for your annual premium. When you’re paying monthly, there’s credit involved and you pay interest. It’s typically fairly small to be fair. Certainly not megabucks the way short term lenders tend to be. But it’s still money to be saved over the year if you’re fortunate enough to be able to afford a single leaner month. Plus it’s all paid up, so nothing you need worry about.
Speaking of car insurance....be careful on your excess (I think it’s co-payment in the USA/elsewhere). You might think higher excess leads to a lower premium, but you’d be wrong.
I’ve seen people with four figure excess amounts. Those poor folk are shooting themself in the foot, as it’s quite easy for car repairs to come in under your excess, in which case your premiums are wasted unless you hit someone else (and it’s that last part that’s the reason car insurance is compulsory in the U.K.)
That can mean your bum is out the window for essential repairs stemming from vandalism/minor damage - such as some arse smashing your wing mirror, or slashing your tyres.
Third Party, Fire & Theft is likewise pretty pointless, as if you damage your car, or the responsible party can’t be found, you’re stuffed with the repair Bill.
Match your cover to the value of your car. Dunno about anyone else, but my car (whilst perfectly serviceable and an excellent set of wheels overall) doesn’t have much resale value. So there’s even less point in me going for a high excess - chances are if I am in an accident, she’ll sadly be a write off. With my current £100 excess, I won’t be too far out of pocket should she need to be replaced.
Just be careful about second hand cars in general. Always get an approved ownership/finance check (because if you buy a second hand car that’s still on finance. The finance company can and will take it off, and there’s not a thing you can do about it).
And if you’re needing to use credit for the purchase, do more research. Is the car’s sticker value fair? How much is the interest adding? What’s its service history? What’s its life expectancy? After all, if you’ve signed up to say, a five year credit plan, but the car only has three years of life left in it, that’s a bad deal.
If you’re really penny pinching, also get the right car for your circumstances. Some cars get their fuel efficiency on long motorway trips. Others are better suited to town driving and relatively short trips. Typically where they might be efficient in Scenario A, they’ll guzzle gas in Scenario B.
If you’re buying for the school run, or buying for a regular commute, do your research accordingly.
And in terms of basic maintenance, look for youtube vids on how to do basics like changing lightbulbs, fuses etc. Because not all designs are equal. If a headlight goes, and you can only replace the whole unit, that’s gonna be more expensive than if you can just swap the bulb out (and by an order of magnitude).
Example? The CD player in my car didn’t work when I bought it. This meant I was down to the Radio only. Eventually bought and installed a new stereo unit (with Bluetooth. Fancy!). But not before I looked for “how-to” guides online.
Sadly the only one I could find explained you needed to wire it to the fuse box - but singularly failed to demonstrate how to do it. Eventually did a decent bodge job by wiring it into the heating controls, which was an alternative the same video suggested.
Basically, always be on the lookout for false economy. You might be saving today, but are you just setting yourself up for avoidable expense further down the line?
Yeah, no, I realised that was what you were talking about. It's why I deleted that part of my post within about five minutes early yesterday evening. Frankly, I'm surprised to see a response to it today! Did you leave that page open overnight or something?
No, someone else quoted you and I thought I'd address it anyways. It's something you see a lot in university towns.
And to bring it back to the original subject, if you're in a university town, check the university's bulletin board for cheap rental housing. Students are often required to sign a one-year contract when renting a space, but are there for only 8 months. Sub-letting those spaces can save you a TON of cash on rent, as usually each student has to find a sub-leaser on their own. The prices will be well below what the student pays, but there is the hassle of having to move every student term. Works even better if the university has a work-term program, which frees up even more sub-let spaces in the on-cycle.
Not something you'd want to do long term, but if you're really down on your luck it can be a godsend while you get back on your feet.
So I was already in the lucky position of clearly being 100% not at fault. Per default insurance policy I would still have had to pay an excess (...why?! I've NEVER agreed with excesses, but anyway). I managed to get this waived by politely explaining to the agent on the other end of the phone that I had difficulty with the notion that I should have to pay anything for a known and accountable party's fault. She agreed... the excess got claimed on their insurance too. 
