Interest Rates down to 1%
Posted by: schizo on 06 February 2009
I feel really sorry for people who were living off the interest from their nest egg.
Posted on: 06 February 2009 by JamieWednesday
True, they're suffering and it ain't going to get any better for them any time soon. Maybe they should have diversified their income producing assets like most of the rest of the world does. Eggs in baskets and all that...
Posted on: 06 February 2009 by Gary S.
Jamie
What, like equities and property for example, yea, I'm sure they'd be rolling in it.
What, like equities and property for example, yea, I'm sure they'd be rolling in it.
Posted on: 06 February 2009 by JamieWednesday
Gary, you like most people I'm afraid are only looking at the now, the very short term.
Other assets, like property, equities, gilts etc. can all produce income and wayyy higher than interest rates right now. Sure the capital goes up and down but after going down, it does go up. The world does NOT stop turning despite what it says on the news. People who rely on cash alone for their income are kidding themselves. Plus of course what price your Sterling savings account now? The biggie is if you draw interest out as income you get no growth, whatever the rate of interest you receive. Interest rates are also lnked to inflation of course. How sensible is it to lose typically 5 to 25% of your asset value almost every year for the last 35 years, depending on the official rate of inflation? Capital value that will never, ever return. Capital values in property, gilts, equities will for the most part return to their median and go through it again. A well managed plan (and it is to PLAN that is key here, rather than bury your head in the sand and let yourself get pulled along by the current) diversified between cash, equities, gilts and property and whatever else you fancy will have likely given you a decent income over the last 5 years, still be giving you that income and your capital balance, measured point to point even at these scary times, will still be about the same or more than invested, depending on what you invested in.
Other assets, like property, equities, gilts etc. can all produce income and wayyy higher than interest rates right now. Sure the capital goes up and down but after going down, it does go up. The world does NOT stop turning despite what it says on the news. People who rely on cash alone for their income are kidding themselves. Plus of course what price your Sterling savings account now? The biggie is if you draw interest out as income you get no growth, whatever the rate of interest you receive. Interest rates are also lnked to inflation of course. How sensible is it to lose typically 5 to 25% of your asset value almost every year for the last 35 years, depending on the official rate of inflation? Capital value that will never, ever return. Capital values in property, gilts, equities will for the most part return to their median and go through it again. A well managed plan (and it is to PLAN that is key here, rather than bury your head in the sand and let yourself get pulled along by the current) diversified between cash, equities, gilts and property and whatever else you fancy will have likely given you a decent income over the last 5 years, still be giving you that income and your capital balance, measured point to point even at these scary times, will still be about the same or more than invested, depending on what you invested in.
Posted on: 06 February 2009 by Guido Fawkes
Thanks - much appreciated.quote:Originally posted by schizo:
I feel really sorry for people who were living off the interest from their nest egg.
Here's a song for you to enjoy
Posted on: 06 February 2009 by FlyMe
I thought it might be a good time to get a loan to invest in some naim upgrades. My bank has a special offer for personal loans of only 8.75% 
Posted on: 06 February 2009 by JamieWednesday
stick it on your mtg at about 4%?
Posted on: 06 February 2009 by 555
Didn't use of credit get us in this mess? 
Posted on: 06 February 2009 by hungryhalibut
You do have to wonder what difference these extra cuts will really make. About half the people with mortgages are on fixed rates, and unless you have collarless tracker the cut is not necessarily passed on. There are, I think, about ten times as many savers as borrowers, and pensioners like my dad need the income from savings to boost their pensions. It seems like hard times for all are guaranteed for a while yet. Once the bank rate gets lower still, it's on to quantitative easing, which is a mystery to all it seems, but is basically printing money by buying bonds (or is it selling!!?).
Nigel
Nigel
Posted on: 06 February 2009 by hungryhalibut
quote:I thought it might be a good time to get a loan to invest in some naim upgrades
As an academic, and therefore blessed with a large brain, I presume that is a little jest!
Nigel
Posted on: 06 February 2009 by Bob McC
Flyme
If you're daft enough to get credit for hifi at the moment Barclaycard are offering a 6.8% for the life of the loan deal now.
If you're daft enough to get credit for hifi at the moment Barclaycard are offering a 6.8% for the life of the loan deal now.