Re: Brown's achievement: "Britons suffer 17% plunge in wealth"
- From: Mel Rowing <mel.rowing@xxxxxxxxxxxxxx>
- Date: Mon, 16 Mar 2009 02:03:28 -0700 (PDT)
On Mar 16, 8:32 am, "Lou Ravi" <j.mur...@xxxxxxxxxxxxxx> wrote:
jake wrote:
On Sun, 15 Mar 2009 23:37:47 +0000, JNugent
<J...@xxxxxxxxxxxxxxxxxxxxxxxxx> wrote:
Lou Ravi wrote:
aracari wrote:
Socialism marches on...
"THE wealth of households in Britain fell by 17% last year,
No it didn't, that's newspaper tosh. If I have a house that is
saleable for a million at one moment then 6 months later is only
saleable for 800,000 I haven't lost 20% of my wealth. I still have
the house which has the same intrinsic value it has always had
(number of rooms, location, garden area fittings etc). I haven't
lost a penny
The above is such an idiotic statement it can only be from a labour
voter.
R i g h t ...
So Woolworth's is just as valuable as it ever was?
Do tell me exactly then how someone has lost 17% of their wealth who
still owns the same house as pre-crash and has the same job with the
same wages. As I said, they haven't lost a penny and given the drop in
interest rates if tey are still paying for that house they are saving
money. Wealth is not potential, it either is or isn't, so telling
yourself that you can sell your house for 500,000 does not mean you have
a half a million.
Oh it does provided you are prepared to go into rented accommodation.
However, if your house were worth £500 000 and another house in the
next town were worth £500000 then previously you could sell yours and
buy the other without incurring extra expense. If your house is now
worth £400000 its a pretty safe bet that the other will be worth
similar and so you could do pretty much the same.
Now, consider that portion of your wealth that may be tied up in a
pension fund. That will certainly take a have taken a hammering. Again
you can say that the pension fund will still own exactly the same
assets as it did before the recession and historically speaking, the
value of these assets can be expected to recover. However here it
becomes a matter of circumstance.
Yes! if you are in early or mid career than there is a good chance
your fund will recover. In fact because a unit cost averaging you may
well in fact be better off when you come to retire. However, if you
retire now, then you are locked into these low values for the rest of
your life.
Similarly consider those retired and are partially dependent upon
investment income. If they continue to draw from their nest egg as
they are accustomed to doing, then they will be drawing on capital and
that nest egg will be diminishing and will continue to diminish even
after any recovery unless they discipline themselves to draw less.
It's not easy to apply a general rule.
.
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