No country for young men

bangersandmash

me_right_one wrote: »

I saw another thread where some muppet had a similar arguement, that people shouldn't buy what they cannot afford. Its people of exactly that mentality who would have been saying "Rent is dead money, nobody's forcing you to rent. Why pay x amount per month for rent when a mortgage is the same" during the good times:mad:

How do you come to the above conclusion? I would have thought that people who genuinely believed they shouldn't buy what they cannot afford would have been more likely to have recommended renting over buying during the peak bubble years, rather than pushing the lame "dead money" argument.

Seth Brundle

@me_right_one
Someone who makes an argument similar to mine is a muppet. Does this imply that I too am one, in your opinion (I'm thick skinned and not taking offence)?

I always thought that people made their own choices. Myself and 'er indoors bought our house. We alone are responsible for the repayments. If we didn't think that we could manage then we wouldn't have bought it!

Furthermore, I have taken on a paycut in my current job and also chose to take a sizeable paycut when joining this company (I prefer personal satisfaction and happiness over money!). We have also seen our mortgage interest relief disappear. So since I bought my house, I like many others in this country have effectively seen their incomes drop.

However, we bought our house with some foresight and common sense. We didn't choose to buy an overpriced house in an estate in the middle of nowhere thinking that this was perfect. We spent within our means. The fact that you now feel that someone who does this is a muppet reflects more on yourself than it does on me!

Had we not been able to be in a position to buy then we would have chosen to rent/tent/stay with our mothers/emigrate/whatever.

Similarly, we didn't go out buying brand new cars, etc. Unfortunately fasr too many people were satisfied to live on credit and those that chose not to are muppets! We are muppets for seeing through a bubble led by a man who couldn't even get a tax clearance cert. Unfortunately everyone out there who isn't a muppet failed to see this!

diverdriver

I'm repeating myself a bit here. During the boom, working in a low paid job in one of the multinationals. I bored my younger colleagues with advice about getting some form of qualifications for when the bad times came again. Some to be fair were doing that anyway. I pointed out to them that these were the 'good old days' upon which they would look back fondly. When they were young free and single with no committments. But most were too young to realise it couldn't last and frankly none of us knew just how badly it was all going to end.

Most of these young people came from working class areas like Ballymun, Finglas, Darndale etc. In the past, most of them would never have the job they now found themselves in. They would never have bought a house. But suddenly they could, well in fact mostly they couldn't buy a house unless they saved hard and were in a relationship with both people working and had stable if not neccessarily well paid jobs. They would have gone down on the council register and waited for a house. As it was most of them rented at outlandish prices until they managed to save enough for a deposit or else stayed with the parents.

You cannot say these people were muppets. Many of them chose to buy and worked and saved hard to achieve this. Even some of the careful ones are in trouble now, an affordable mortgage isn't affordable when you're on the dole. Yes there were those who seriously overextended themselves and there were the over ambitious who bought several houses to rent or who over borrowed and are now deeply in trouble.

The problem right now is that it's not just the greedy or overambitious muppets who are in trouble. It's all of us. No job is really safe, not even in the public service, no salary is safe.

The truth in my own case is that I, in common with most ordinary people was no better off during the boom than before. For people in ordinary jobs not much changed except the prices went up and they had greater access to credit. I said throughout the Celtic Tiger years, old cynic that I am. That not much had changed for most people. Their pay didn't increase (unless you were lucky to be benchmarked). The main difference was that people who in the past would have been unemployed or gone to England had jobs and the people who were rich got richer still mainly by racking up the prices to the rest of us. It was a vicious circle.

So let's not paint all the people in trouble as muppets. Most are just ordinary people trying to get by.

Dannyboy83

diverdriver wrote: »

The truth in my own case is that I, in common with most ordinary people was no better off during the boom than before. For people in ordinary jobs not much changed except the prices went up and they had greater access to credit. I said throughout the Celtic Tiger years, old cynic that I am. That not much had changed for most people. Their pay didn't increase (unless you were lucky to be benchmarked). The main difference was that people who in the past would have been unemployed or gone to England had jobs and the people who were rich got richer still mainly by racking up the prices to the rest of us. It was a vicious circle.

QFT

me_right_one

@Kbannon. I am not saying you are a muppet. I am saying, another poster, who happened to be a muppet, once had a similar arguement to yours, albiet far more extreme. This guy thought that nobody should spend more than they can afford; ie, unless you happened to have a spare E300K lying around, you should content yourself to living under a piece of cardboard until you save that amount.

Picture this; Its 1997. Little Johnny hits 18. He's the middle child of 3. The father is dead, the older sister married and living in family home with husband, 3 year old daughter, younger sister, and elderly mother. Older sister has a view to eventually inherit the house.

Johnny heads off to UCD to do computer programming, with E600 to his name. He excels, and 4 years later has an honours degree. Its 2001, he's 22, and starts working for a top multinational. He begins on low pay, but loves his work.

He rents a room in a 2 bed apt, with 3 other people living in it. Because of its location, the rent is fairly high. Johnny works on till 2007, age 28, saving an average of E10K per year, hoping to buy or build a house. That took a LOT of sacrifice (10 year old micra, no going out etc.). By 2007, he has saved E60K. Houses have steadily risen in price since he left the family home 10 years ago.

He has rented all the while, now he thinks its time to make a move. However, his E60K won't buy him a conservatory on a house, nevermind a house in its entirety, but Johnny's not worried. He's young, and still has a good job. He decides to take out a mortgage on a nice semi-D near his work before prices rise any higher. Since he was a young lad, Johnny was regaled with tales of Dad working for 3 pound per week, and Grandad working for a schilling, so he's well aware of how inflation usually works, and how the younger you start repaying a loan, the younger you will be when it finishes. Anyway, with the rate he's been saving, plus what he already has, he only had to borrow E260K to buy this E320K house, only 20 mins from his work. Its cheap for the area. He decides he can rent a room aswell to help with repayments.

He could have bought a house for E50K less in a small village in Cavan, but it was over 1.5hrs commute from work. Not very practical. Besides, he's career focused, and sees himself getting promoted soon. He wants to be near work. Anyway, he has his eye on Nuala in accounts;). A neighbour offered him a site on his land back home for E100K, which would have saved Johnny even more, but all-in-all, he thought he was better off creating a life for himself where he was.

2009. Ireland is a changed place. Johnny was laid off. There's nobody to rent his rooms as there's hardly anybody working in the area. House prices have dropped by 40%, netting Johnny a loss of E128K on the value of his house. He ponders his situation.

At 30, he logs onto boards.ie. He thinks about the impoverished, cramped childhood upbringing, the long nights of studying, the crap jobs in college, the hard saving he had to do, the missing nights out with mates, the sacrificing of holidays, and general all-round purging he did to better himself over his life, especially in the last 10 years. He thinks about selling the house, and the fact that he will have lost his nest-egg of savings, and still owe the banks colossal money. His life's accomplishments, evapourated - and all in just 2 years. He wonders what it will be like, moving back home. "Wierd uncle Johnny", his now 14 year old niece calls him. Little does she know that in 4 short years, she will be starting the journey Johnny is just finishing. And he's no further on.

And as he contemplates what the next 10 years will bring, he looks through some past subscribed threads on boards, browsing here and there, looking out for anything interesting, or even better, any jobs, and then he sees where some absolute MUPPET!!! said, "Well if you cant afford something, you shouldnt buy it"!:mad: MUPPET!!! MUPPET!!! MUPPET!!! MUPPET!!!MUPPET!!! MUPPET!!!:mad::mad::mad: Spoken with the true insight of someone who has never thrown the dice of life!

irish_bob

me_right_one wrote: »

I saw another thread where some muppet had a similar arguement, that people shouldn't buy what they cannot afford. Its people of exactly that mentality who would have been saying "Rent is dead money, nobody's forcing you to rent. Why pay x amount per month for rent when a mortgage is the same" during the good times:mad:

you have to go back to around 2002 when rent was more expensive than a mortgage

gurramok

The term is over-extending one self. We don't know Johnny's salary. If his salary was low taking out that 260k mortgage, he over extended himself and must learn the lesson. If his salary was high, its bad luck he was laid off, nothing no-one could have forecast his job loss at the time of buying.

Now, throw in the timing of buying itself. A little bit of research using Google or using the Accommodation forum here would of told him that the housing crash was under way and the 'feel good factor' amongst many was not to buy in 2007 but he either chose to ignore that advice or just did not do that simple bit of research into the biggest financial decision of his life.

I could of been Johnny, i work in IT, I chose with a bit of research not to buy as I saw no value in a 320k house.

me_right_one

gurramok wrote: »

The term is over-extending one self. We don't know Johnny's salary. If his salary was low taking out that 260k mortgage, he over extended himself and must learn the lesson. If his salary was high, its bad luck he was laid off, nothing no-one could have forecast his job loss at the time of buying.

Now, throw in the timing of buying itself. A little bit of research using Google or using the Accommodation forum here would of told him that the housing crash was under way and the 'feel good factor' amongst many was not to buy in 2007 but he either chose to ignore that advice or just did not do that simple bit of research into the biggest financial decision of his life.

I could of been Johnny, i work in IT, I chose with a bit of research not to buy as I saw no value in a 320k house.

He was not over-extending himself. Having the thrifty lifestyle he had, he could have even afforded more! If he could afford to save E10K per year plus rent, he could have easily borrowed E300K.

Re the timing, many factors affected his decision. Dropping house prices considered, the collapse of Fanny-mae and Freddie-mac had yet to happen on a different continent a year in the future. To Johnny, a 40% drop was still completely unexpected. Chrystalballology was not on his course.

Re research, he did plenty. This house had more appeal to him than price alone. Anyway, not even Eddie Hobbs' and David McWilliams' genetically-engineered hybrid could have predicted the severity of the crash. 10%, maybe 20%, not 40% + lose your job! Ah but sure a boards forum would know:rolleyes:

Re rent prices v mtge repayment prices, it depends on the area. They may not have been matched cent-for-cent, but they were comparable for almost a decade in Johnny's area. 10 years could be half his mtge term.

My point for that rant was to show kbannon why I thought that other poster was a muppet, who took a narrow-minded, smug, condecending view to Johnnies all over Ireland. True, Johnny may have made some mistakes, but let he who hath no sin cast the first stone etc. I reiterate that I was not calling kbannon a muppet.

I dont have figures, but my guess is that most of the people on the dole queue are Johnnies in some form or other. Hence the relevance to the title of the thread, no country for young men.

jetfiremuck

Johnny did nothing wrong in that HE made the best decision regarding a house purchase which is that he probably paid market value or the house. Years ago it was impossible to do civil engineering due to the demand for places. Now there is no issue...the market demand for that profession has dried up. There are too few buyers for the houses that are for sale, same with cars same with the leather sofa shops, Plasma Tvs etc. The market is well saturated at this stage. How is all that going to play out?

gurramok

me_right_one wrote: »

He was not over-extending himself. Having the thrifty lifestyle he had, he could have even afforded more! If he could afford to save E10K per year plus rent, he could have easily borrowed E300K.

Re the timing, many factors affected his decision. Dropping house prices considered, the collapse of Fanny-mae and Freddie-mac had yet to happen on a different continent a year in the future. To Johnny, a 40% drop was still completely unexpected. Chrystalballology was not on his course.

Re research, he did plenty. This house had more appeal to him than price alone. Anyway, not even Eddie Hobbs' and David McWilliams' genetically-engineered hybrid could have predicted the severity of the crash. 10%, maybe 20%, not 40% + lose your job! Ah but sure a boards forum would know:rolleyes:

Thats simply not true.McWilliams and George Lee as well as one infamous Morgan Kelly from UCD warned in real time the dangers of the severe house crash that was occurring. Even Kelly warned of the Irish bank collapse but hey he was told to commit suicide by Bertie Ahern.

They all at the time predicted a 40%+ drop within a few years starting in 2006/07, but that advice was blatantly ignored by many house buyers including your Johnny who had access to TV, newspapers and the internet.

That boards forum you speak off saved me and many others a packet by not buying, have a search for threads there in 2007, open your eyes.

baalthor

Amhran Nua wrote: »

Control the deficit (approx €24 billion) by going to the Dutch method of

healthcare (savings €13 billion)

While implementing the Dutch style healthcare system might be a good idea it's really disingenuous and misleading to suggest that it's a method of reducing the deficit by €13bn.

Presumably this massive reduction in spending will be made up for by mandatory direct payments by consumers to Health care providers and
contributions from companies.

So how much will each person pay on average per annum? €1000, €2000?
Surely it was always intended that income tax would have to be decreased or rebated if such a system was implemented. Othwerwise this is just a stealth method of increasing taxes to pay for the budget deficit.

Also, government spending needs to be addressed immediately while even according to your own website it will take at least 7 years to implement a mandatory direct payment health-care system.

Amhran Nua wrote: »

cutting quangos (savings €5 billion from €12 billion approx)

Which quangos?

Amhran Nua wrote: »

a little nip and tuck around social welfare (20% or approx €4 billion)

This is Amhran Nua humour right?

Amhran Nua wrote: »

general efficiencies such as removing redundancies and controlling costs,
which brings us to break even.

Yeah €2bn,nothing to you guys, don't bore us with the details

Amhran Nua wrote: »

The capable workforce will be provided by setting up ten world class educational institutions, not as fourth tier education but as an adjunct to existing third level education.

I asked you about these before; do you have examples of such institutions from other countries?

Amhran Nua wrote: »

Finance: Set up the Irish Common Investment Market, where limited companies can offer up shares to the public to buy and sell on the internet, without intervention from middlemen.

I thought that shares can already be bought and sold on the internet?
How will this new exchange differ from the current one?
Why advantages would it offer to the investor?

peter_de_tool

The over-50s control over 80 per cent of the nation's wealth.

Seth Brundle

source?

peter_de_tool

peter_de_tool wrote: »

The over-50s control over 80 per cent of the nation's wealth.

Is this the same "wealth" that includes property prices where supposedly we were a nation of millionairres:)