# How are people paying for their lifestyle



## Buddyboy

Hello all,
first post, so bear with me.
A question has been rattling around my brain for a while.....

I am married with no kids. My OH and I both work, with a joint income of about €110k. We have a reasonable mortgage which costs €1400 per month, and no other loans. We have two cars, both old and bought a few years ago for cash (one '94, the other '00 Punto). We save/invest roughly €850 per month, and the rest of the monthly money goes on living expenses. We aren't miserly, but don't splash out either. All in all, we are very happy (and lucky) that our outgoings meet our income, and neither of us feel the need to splash out on new cars etc. Sure, we'll replace them when we need to, but that's not yet. 

So my question is this... How is everybody else surviving? We regularly see people with 2/3 kids, two '06 cars, etc. and know that they cannot be earning twice as much as us. Is it all going on the never-never? Are they up to their eyes in credit card debt? Have they remortgaged to pay for the foreign holidays?. Just the cars alone will have cost €40-50k between them.

I feel as if I am missing something here? Can anybody enlighten me?


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## Guest112

I see your problem.................its the Punto, those yokes will clean you out.


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## extopia

It's likely that a lot of what you see is the result of borrowing. You, on the other hand, are a saver (although you probably should be able to salt away more than 850 a month if you've no kids. Are you making pension contributions up to your maximum limits as well?)

I don't have the figures in front of me but personal debt is very high in Ireland, propped up house equity. A lot of people who seem to have "the life" are probably making minimum payments on their credit cards.

When and if things get rougher, you're going to be the one looking like you have "the life."


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## monstie

1500 quid a week on living expenses??


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## Con

Buddyboy,

If you are happy with what you are doing then why do you have to compare yourself with others? How do you know that the person you speak of with the 2-3 kids is not earning twice what you earn? If that person is up to there eyes in debt then it is there choice and it should not really affect you.


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## extopia

The other thing to understand is many Irish people have never before experienced the kind of wealth (and credit availability) we've seen over the past decade. Many people are indeed going mad with the spending, and there's a lot of peer pressure out there apparently. Those who have experienced the entire boom-bust cycle (probably while abroad) are probably a little more cautious.


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## Buddyboy

Con said:


> Buddyboy,
> 
> If you are happy with what you are doing then why do you have to compare yourself with others? How do you know that the person you speak of with the 2-3 kids is not earning twice what you earn? If that person is up to there eyes in debt then it is there choice and it should not really affect you.


 
Con,
do you ever get the feeling that the answer is there, but it just eludes you? I am very happy with what I am doing, and other peoples choices do not affect me. It's just my insatiable curiosity.

Monstie,
Don't know where you got €1500.  A our gross income gives a net income per month of roughly 6.2k, take off savings and mortgage (2250), leaving 4000. This is about 900 per week. This covers everything, petrol, groceries, holidays, clothes, dog food, car tax, insurance etc.


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## Con

I'm sorry, it bugs me when people make assumptions and I saw your OP as just that


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## Buddyboy

Con said:


> I'm sorry, it bugs me when people make assumptions and I saw your OP as just that


 
No bother Con,
I found it hard to word the post, and not have people read things into it that weren't there.

I know that people are earning twice as much as us, and I would believe that that is the answer it if it was only the odd occurence (I know we are earning a good bit above the average wage). But everywhere I look, it seems to be that there are new cars and copious consumption all over the place. On Sunday I was in Blackpool Shopping Centre in Cork, and every third car seemed to be a 05 or 06, and every second one of them was an Audi, SUV, MPY, Lexus etc.


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## SarahMc

Of course its more likely that its all on credit, but perhaps (and I'm not being being smart), but maybe they are better money managers than you. 
I earn a fraction of what you do, and I mean a fraction! My mortgage and childcare is more than your mortgage, I drive a newer car, have no debts and save.

Mind you I don't have a dog, but kids are expensive!


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## baby_tooth

there is only 30 thousand in ireland earning over 100k a year,
new car sales far outstrip this.

its all on the never never....
all those shiny new cars are paid for over 35 years in the form of equity release.

it may be frustrating now, but in the long run, you will be safe in the knowledge that you have a good job and decent savings, so you will have to pay alot more tax to subsidise the encumbent state machine as they bench mark us into obscurity, and don't worry, your taxes will rise as the infrastructure crumbles around us.....

all these ppl with suv's a geniuses...they can see this all ahead..they know that they will need 4x4's to negotiate their way through mountainous pot-holes, scaling precipes as they crawl along our M50, before having to climb down to pay from the air conditioned and leather clad haven to pay the 150 euro toll....


in all seriousness....we have more bmw's than germany, who makes and sells them at half the price to here...not to mention our running costs...

we have more property than all other europeans, but don't worry, most won't be able to afford to fly out to them in a few years...

we have the worst infrastructue cos we are too busy fleecing the system....

we have the smallest houses, cos its hard to put all the junkers flooring on the credit card....

we have the worst b.band pentration ratio, cos we don't need it as we are "europes technological centre"...

we have the highest mobile phone charges, and yet we have the highest per minute usership and the most handsets per person....

we will ahve spent more on tribunals than we have on the primary school building project in the last five years....


we had the highest concentration of rail-networks in the world,....ever...and we let the farmers use the rails as fencing posts....

we have the highest medical costs...and the worst service

we have the most expensive insurance and the most claims in europe...


BUT don't worry, we have our houses!!...

bitter and twisted sentiment is now expunged....


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## Swallows

That's one of the mysteries of life isn't it. If we knew everything about everyone what would we talk about then?


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## nelly

swallows you might have it there! 
recently i spoke to  a mortgage advisor who said in the last year he could count on one hand the customers who were not releasing equity or looking to top up a mortgage. Maybe an exaggeration but i would believe there are a fair few folks who reckon 'we can pay for the wedding by extending the mortgage...sure its at a great intrest, rate 4% and all...."
I envy them the not worrying about paying it back but then sure we are all in the same boat. Aren't we?


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## levelpar

Hi Buddyboy,  Maybe there's a hole in your trousers pocket


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## extopia

nelly said:


> sure we are all in the same boat. Aren't we?



Nope. You guys are on your own.


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## ClubMan

Buddyboy said:


> So my question is this... How is everybody else surviving?


Lots of people "survive" by living within/below their means.


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## delgirl

Are people paying for their lifestyle or are they creating a lifestyle first and then running themselves ragged trying to afford it?

We found ourselves in this scenario and didn't realise we were doing it.  

The OH has now given up the well paid (€80k+), extremely stressful job  and we have changed our lifestyle to allow him more free time to spend on hobbies, the family and whatever else he wants to do.

The trappings of wealth are not worth the anxiety that debt, long working hours, health problems and stress bring.  IMHO .


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## DirtyH2O

Half of all property in Ireland is mortgage free apparently, is it not likely that the people with loads of disposable are living it up and the other half are digging themselves deeper and deeper to have the same lifestyle. 
I'm sure there are loads of company cars on the road which is only costing a fraction of the cost that PAYE workers would have to shell out so it's not comparable.
When I see how much cash is available from private investors for people like Barry O Callaghan and Eddie O Connor there is some serious amount of equity out there.


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## annR

Company cars, well off older people who don't have mortgages probably count for a lot of them.  

Look at the driver of the next Merc you see - it's more likely to be some wealthy looking older silver haired guy than a couple with 2 kids in the back.

However that could be more to do with the choice of car.  There are plenty of 06 SUVs which are owned by young families.


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## adorado

I am sure some people will manage their money very well, and that's why they can afford all this things, but please, think about it. What are people doing? Living in debt, spending the money THEY DON'T HAVE in silly and unnecessary things. People are not able to retire, to pay college for their kids, but yet, shopping centres are packed...Very sad. Go to the Square in Tallaght, just to give yoa an example, and see the kind of people that are spending fortunes that obviuosly don't have any money! I wonder, if tomorrow one of their kids or themselves got sick, or lost their jobs, how would they manage? People in this country are splashing their money on holidays, cars, and we will see the consecuences of that very soon...


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## PGD1

2 points.

alot of older people have seen their houses increase in value from the £7000 they bought them for to €750,000+ in the last few years. These people die and the money goes to their children who are free to spend it as they choose. Surely this accounts for alot of the conspicuous spending?

Releasing equity is not always done over 30 years. Many release equity over shorter periods and there is nothing wrong with this.


I would suggest to the OP that he is saving quite a lot. There are many people who are happy not saving, or just saving €200/month. You are saving €850 and have the capaility to save ALOT more in all honesty. There are plenty of people earning half what you earn and also have 2 cars, kids and a holiday and get on just fine.


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## Aesop

“Nothing so impairs your financial judgement as the sight of your neighbour getting rich.”

JP Morgan


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## Buddyboy

Thanks for the replies. I didn't want this to become a discussion on how I was spending/saving my money. This wasn't the purpose of the original post. I know we could be saving more, and are probably doing so, as we have a current account mortage, with the balance in the facitilty account steadly/slowing rising. I didn't want to include this in savings for simplicity. And we have bought a new house last year, (by the way, saved A LOT of money towards that, so we are taking a bit of a savings break, hence the 850 pm), and and there is extra spending going in on that - attic insulation etc.  And one poster was right about the dog <grin>  we got him last year and he has cost a lot in the first year, kennel, dog fence etc.  I just renewed the house insurance policy and we get €260 if he dies, hmmmmmm.

The answers to my question can be summarised into.
1. Some people are living within their means.
2. Some people have released equity to fund thier lifestyles
3. Some people have inherited parents houses that are worth a lot of money
4. A lot of cars are company cars/older people with no mortgage.

It is a difficult question to quantify, bar going up to people in the street and asking them.  I suppose  I was looking for stats/opinions, e.g. 80% of new mortgages are equity releases etc., or car loans are typically over 10 years.

By the way one poster pointed out my use of the word "survive".... fair enough, probably the wrong word to use.

Thanks again,


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## hmmm

I've noticed a strange phenomenon amongst some of my friends, that when they buy their first house they also end up maybe buying a new car, or a new kitchen, or put the downpayment on an apartment in Bulgaria. Maybe when you're borrowing 400, 500k, another 40k doesn't seem like much. Some of them seem to believe they are only getting a prepayment on their "equity" in advance, because their houses will _surely_ rise in value by 20% within a year.

It's all nonsense, completely dependent on the good times continuing. Not a situation I'd like to be in.


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## ClubMan

Buddyboy said:


> We regularly see people with 2/3 kids, two '06 cars, etc. and know that they cannot be earning twice as much as us.


How do you know that this is the case? Or that they don't have other means that they can use to fund their lifestyle? Or (as you seem to be implying) that they are actually living beyond their means?


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## Buddyboy

ClubMan said:


> How do you know that this is the case? Or that they don't have other means that they can use to fund their lifestyle? Or (as you seem to be implying) that they are actually living beyond their means?


 
To be honest Clubman, I don't know. It's all just supposition on my part, hence the original question. Some of the people I would know/be friends with, and have a guess at the circumstances, knowing the jobs they had and guessing at the income. The rest is just curiosity, standing on the road watching all the shiny cars go by, or going to Smths Toys and seeing the trolliies loaded with stuff coming out. 

Hmm's post gives food for thought, some people are obviously taking out the mortgage and including the wedding, car, holiday etc. on the amount. Maybe everybody else is just a better money manager, or inherited money, or bought property early and sold it for a large return.  

So that's why I thought I'd through it out to AAM and see if anybody could shed some light on it.


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## extopia

I think it's just that some people like to spend money and will do so if it's available, whether borrowed or not. Simple as that. Those who choose to be more prudent (or less obviously affluent) are less visible.


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## MOB

Our transition to a society of conspicuous consumers has been relatively quick:  Any ex-pats I know who come back for the odd visit are astonished at what they see.  Many compare our conspicuous wealth displays unfavourably with the more restrained attitudes of 'old money'.  This kinda misses the point:  A lot of the money in Ireland is indeed new money, and it would be more astonishing if this new money wasn't accompanied by a lot of what you might call typical 'new money' behaviour.  It will pass.  Enjoy it - whether as a participant or an observer.


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## liteweight

Perhaps people don't save as much as 850 per month...plenty to pay off car loan. Strange how about 30/40 years ago, living on credit was frowned upon in Ireland and people who had to do so were considered 'losers'. Nowadays, if your not approved for credit the position is reversed!


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## mell61

I'd have to agree with original poster, that there does seem to be a lot of spending that doesn't seem to be related to income...
An anecdotal story I have is a coworker made Eu20-30k from selling her apartment this year, then 'invested' it all on a brand new 06 hairdressers car, last week she was complaining because she had been decline a 0% credit card transfer for her Eu5k balance...
I even see it in my family, an in-law has refinanced his house 3 times in the past 8 years, releasing equity for loans and to clear credit card debt...
I do think a lot of people are relying on the 'never never' but Visa rather than the old reliable HP of years gone by.
I think it will really hit home if we see another couple of interest rate increases...


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## ClubMan

extopia said:


> Those who choose to be more prudent (or less obviously affluent) are less visible.


Excellent point!


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## Remix

Given ,to put it mildly, the "unusually large" debt levels, Ireland has been a good example of an economy that can boom by spending other people's money and employing an army of people in the service sector to facilitate that spending! 

I think the essential motivator to have people behave this way is a personal feeling of wealth growth brought about by booming house prices. 
If you see your house as a free ATM out into the future then why worry about borrowing and spending now ?

If the housing boom is ending then I think we will see some adjustments. Difficult to predict how things will unfold but I would think a continuation of "business as usual" as seen in the past few years is unlikely.


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## Glenbhoy

Ye are all being very hard on buddyboy I think - imo he is right in that I see the scenario he painted all the time - ie. average salaries, 2 new cars, big holidays etc - i see nothing wrong with it I might add as all such choices are personal, sure feck it, nothing wrong with living it up either.  But it does make one curious, so here are my musings.  
The truth is there is an awful lot of money available to people through equity release, and tbh they as well avail of it, if they were financially prudent enough to purchase 10yrs ago, the value of their property will have increased 4/5 fold, their salaries will also have increased massively and now, it's probably quite possible that even with taking 100K out for lifestyle, their LTV is about 25%, repayments are similar in nominal terms to their repayments 10 yrs ago, so they're much better off.  We should also bear in mind that many couples marrying in the past 10yrs would have retained one of their properties for rental - there's a nice 500K injection, and as someone else pointed out, inheritances and parental money help too.


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## Duplex

We are the most indebted nation on Earth, that's whats funding our lifestyles.  Equity release is a deliberate 'marketing misnomer' Glenbhoy you don't pay interest on equity, you earn interest.


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## room305

Duplex said:


> We are the most indebted nation on Earth, that's whats funding our lifestyles.  Equity release is a deliberate 'marketing misnomer' Glenbhoy you don't pay interest on equity, you earn interest.



Just shows the power of marketing. I remember when people would whisper how someone had to "re-mortgage" their home, invariably in response to some personal financial crisis.

Now people talk glibly about "equity release" as though their home was just a big pile of banknotes it would be foolish not to tap into.


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## walk2dewater

"affordability" and the laughable "affordability index" are my favourite BubbleSpeakisms...


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## ClubMan

Nothing wrong with an equity release if your mortgage is already down to a comfortable level and you don't have any other significant borrowings. No point in paying for a car, holiday, kitchen etc. over 20 years though.


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## Persius

I'm not too sure about the company car arguement. The benifit in kind you pay on a company car is not much less thatn the repayments on a car loan for a car of similar size. Advantage of buying your own car is that you have an asset (though probably only worth a few thousand euro) at the end of the 4 year loan. You never own the company car, and when you leave the company you've nothing.

Agree that company car means you don't need loan approval or anything and allows you a slightly bigger car than if you had to pay the money yourself in the form of a loan. But I doubt it is that relevant tin this discussion.


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## Glenbhoy

walk2dewater said:


> "affordability" and the laughable "affordability index" are my favourite BubbleSpeakisms...


Why do you find the concept of affordability so amusing?  Do you not feel that it can be a very important aid to comparability?



> Now people talk glibly about "equity release" as though their home was just a big pile of banknotes it would be foolish not to tap into.


Why is that necessarily a bad thing?  It should be remembered that we only have one life, sometimes it can be fun to enjoy it too 



> Glenbhoy you don't pay interest on equity, you earn interest.


Equity refers to ownership interest, it may or not pay interest (though more commonly divdends?).


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## conor_mc

Glenbhoy said:


> Why do you find the concept of affordability so amusing? Do you not feel that it can be a very important aid to comparability?


 
If you're comparing like-with-like, then yes. Adjusted for inflation, yes. Adjusted for higher proportion of take-home pay, yes.

But if you're comparing the affordability of a 15-/20-year "average" mortgage from 1986 and a 35-/40-year "average" mortgage from 2006, and both figures seem to suggest that affordability hasn't changed much, well then that is pretty laughable......


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## walk2dewater

Glenbhoy said:


> Why do you find the concept of affordability so amusing? Do you not feel that it can be a very important aid to comparability?


 
What does being able to afford something mean to you GB? If I said here’s a loan to buy a new Porsche 911 with a monthly payment of €99.99. Do you think you can “afford” it? What if I told you the term was 200 years, backloaded to the last 150yrs, and the rate was set at ECB^1.5, can you afford it now?

“Affordability” as used in todays parlance is a joke concept. It’s a term coined by marketeers and moneylenders into making you believe that if you can meet the monthly payment today then you can “afford” it.


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## Glenbhoy

conor_mc said:


> But if you're comparing the affordability of a 15-/20-year "average" mortgage from 1986 and a 35-/40-year "average" mortgage from 2006, and both figures seem to suggest that affordability hasn't changed much, well then that is pretty laughable......


Ah, but Conor, since our economy moved into this new paradigm we will all now work for the full 35 yrs, back in the day the bank knew you'd be lucky to work for 10 of the 20 yrs term, thus we've more time and income to pay it back. And, obviously improvements in healthcare mean that as 40 is the new 20, 60 the new 40 etc..... and we'll all live to 120 then there is no need to adjust the 35/40 term to compare it with 20
Are there many 40yr mortgages being issued btw? - I don't anecdotally know of any.


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## Glenbhoy

walk2dewater said:


> “Affordability” as used in todays parlance is a joke concept. It’s a term coined by marketeers and moneylenders into making you believe that if you can meet the monthly payment today then you can “afford” it.


I know what you're saying, but surely that's up to the individual to see through the parlance and figure out what's affordable for them?  
Now, where can I get that porsche, and what year are you talking about - I might hold out for an 07 at this stage.


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## Winnie

I have to say im suprised by the responses.  I think that a large number of people are living well beyond their means & there is a huge 'keeping up with the Joneses' mentality in Ireland at the moment.
I know of plenty of people who are living on credit.  
One friend in particular is earning less than 1/2 what I do & yet she has a new car, goes on 2/3 holidays, etc etc.  
Another told me that I was stupid to have money in the bank & that it was just loosing value there.......fair point in some ways.......but her solution to the money losing value was to spend it on something!  I don't think that is a valid argument - if you want to tell me to start investing etc then you may have a point but spending is not the solution.
How many people who buy new homes deck out the houses completely in new gear immediately!  I would say that the majority of people do now.  What ever happened to doing up a room at a time or taking 2nd hand furniture from relatives.

Basically I think that many people are very exposed in terms of their debt & are living well beyond their means..........& I think that they are mad........but I suppose my spending is all I can control so I concentrate on that.  I do find myself occasionally lapsing into the 'I deserve a new car if my friend has one' & I have to cop myself on!


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## ClubMan

Winnie said:


> I think that a large number of people are living well beyond their means & there is a huge 'keeping up with the Joneses' mentality in Ireland at the moment.
> I know of plenty of people who are living on credit.


I think that a large number of people are living well within/below their means. I know plenty of people who don't live on credit.


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## walk2dewater

Glenbhoy said:


> where can I get that porsche, and what year are you talking about - I might hold out for an 07 at this stage.


 
Im sure someone down the bank, highly knowledgeable in these things, can make your dreams come true, for an “affordable” monthly payment of course. Afterall, our general “affordability” hasn’t been better, havent you heard!!


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## conor_mc

ClubMan said:


> I think that a large number of people are living well within/below their means. I know plenty of people who don't live on credit.


 
And _everyone_ I know has a home to live in - doesn't mean that there aren't homeless people out there.


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## ClubMan

conor_mc said:


> And _everyone_ I know has a home to live in - doesn't mean that there aren't homeless people out there.


Neither does this 


> I think that a large number of people are living well beyond their means & there is a huge 'keeping up with the Joneses' mentality in Ireland at the moment.
> I know of plenty of people who are living on credit.


 mean that there is a widespread/pervasive problem.

For example it is estimated that there are c. 6,000 people homeless in _Ireland _which means that c. 0.1% of the population is affected. 6,000/0.1% too many but arguably not the "crisis" claimed by many people/agencies?


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## conor_mc

ClubMan said:


> Neither does this
> 
> mean that there is a widespread/pervasive problem.


 
I think the private debt for the country as a whole is enough cause for concern, don't you?

Either this debt is indicative of a pervasive problem, or there is a small minority of individuals who have some very serious debt issues!!!


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## ClubMan

conor_mc said:


> I think the private debt for the country as a whole is enough cause for concern, don't you?
> 
> Either this debt is indicative of a pervasive problem, or there is a small minority of individuals who have some very serious debt issues!!!


Not necessarily judging by [broken link removed].


> *Key Findings of the Report
> 
> *  Among the key findings of the report are;
> The financial position of Irish consumers is very healthy; the value of the houses they own and their deposit accounts exceed their debts by around €440 billion.
> A very strong ‘macro’ position conceals wide differences in personal circumstances.
> ...


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## conor_mc

ClubMan said:


> Not necessarily judging by [broken link removed].


 
Uh-oh..... better not go there ClubMan. I assume that ESRI report refers to the _current_ value of the houses they own.

I think we need to differentiate between _living within your means_ and having a positive net worth. A healthy balance sheet doesn't necessarily equate to a healthy cash-flow.


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## argolis

Glenbhoy said:


> Are there many 40yr mortgages being issued btw? - I don't anecdotally know of any.


 
There are, me&OH had our first mortgage from Ulster Bank @ 40 years. I think it's acceptable to them if they can aim to have you finish your mortgage before you're 65, so if you're under 25 (as we were) and can meet the other criteria, it's ok. Therefore, people over 25 will only be offered 35 years max. That's my take on it anyway!


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## Remix

ClubMan said:


> Not necessarily judging by [broken link removed].


 

There were eight key findings in that report. All of them quite negative on the debt issue except for the first one.

And in my opinion this first key finding is bogus - I wouldn't be surprised if this point was inserted by bank economist Austin Hughes (report co-author).


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## cjh

*In the interest of a balanced argument:*

*Key Findings of the Report*

Among the key findings of the report are; 

The financial position of Irish consumers is very healthy; the value of the houses they own and their deposit accounts exceed their debts by around €440 billion.
A very strong ‘macro’ position conceals wide differences in personal circumstances.
An increase in indebtedness and a rising trend in interest rates has caused a notable rise in debt concerns among Irish consumers in early 2006.
2 out of 3 Irish borrowers feel their debts are now putting a burden on their household finances.
The number of borrowers who feel that their debt represents a ‘heavy burden’ has increased notably in the past year. One in six mortgage borrowers and one in five of those with other personal borrowings say their current debt level is a significant concern.
Financial stresses are greatest for those with relatively modest incomes but because of higher borrowings, sosme of those earning up to €80k also have significant concerns.
Debt concerns rise with age and tend to peak in the 40 – 50 age groups. This appears to be a decade in which many people are asset rich but cash poor.
A rising trend in interest rates will hurt Irish borrowers further . Roughly 40 per cent of borrowers reckon their financial position would deteriorate substantially if interest rates rose by 1 per cent. As many as 80,000 borrowers would be hit by another half per cent rise in interest rates. Of these we reckon some 50,000 borrowers who already expressing significant concerns about both household and non-household debt will feel a considerable pinch.


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## TTV

> Originally posted by *Clubman*
> 
> Nothing wrong with an equity release if your mortgage is already down to a comfortable level and you don't have any other significant borrowings. No point in paying for a car, holiday, kitchen etc. over 20 years though.



i agree in the same way as there is nothing wrong with heroin as long as its not used to get high. Unfortunately we seem to have as many if not more credit junkies than we do heroin addicts. I wonder in the long run which will be more harmful to the state. Is there any equivalent of rehab for credit junkies?


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## Satanta

TTV said:


> i agree in the same way as there is nothing wrong with heroin as long as its not used to get high. Unfortunately we seem to have as many if not more credit junkies than we do heroin addicts.


I fail to see the comparison to the previous point.

Equity release, when needed (and given the conditions above - comfortable level, no other debts etc.), can provide a low cost loan for unforeseen circumstances (essential purchase of a new car for example - cars can and do have accidents).

As long as the loan is serviced in a reasonable timeframe (as short as possible) and not over the life of the mortgage then savings from a "normal" loan will be made. (this also assumes that the person isn't running out to grab a 07 porche but simply replacing a needed asset)

People can't always manage everything in time without getting into some level of debt, it just comes down to how they handle that debt. To suggest that all mortgage equity releases are wrong is an over simplification of complicated issues.


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## TTV

> Originally Posted by *Satanta*
> 
> I fail to see the comparison to the previous point.
> 
> Equity release, *when needed*



???? Thats exactly my point, the same way as opiates are useful when needed but what about when not needed? and by people not previously understanding interest rates (and believe me they did exist until rates started rising) and the affect of borrowing this extra money. I have often heard people talk about equity release as it they had won some tax free prize. Its when its done by people in these circumstances that I worry. Its obvious that handled correctly by financially prudent people, equity release can be a cheaper and more suitable form of credit but when used by Joe Schmo to get ripped of in some guaranteed rental scheme in Bulgaria or to gamble further on the Irish property market with countless holidays thrown in for good measure, thats when you have to ask if someone is living beyond their means on borrowed money and borrowed time


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## conor_mc

TTV said:


> i agree in the same way as there is nothing wrong with heroin as long as its not used to get high. Unfortunately we seem to have as many if not more credit junkies than we do heroin addicts. I wonder in the long run which will be more harmful to the state. Is there any equivalent of rehab for credit junkies?


 
I disagree too. I wouldn't consider "equity release" a problem where it's comparative in terms to alternative unsecured loans, and it's for what might be considered capital expenditure.

My problem is where equity is released over unsuitable terms to fund current spending - in other words, to clear CC/other debt, 20-year loan to buy a car, etc.

It's not the product itself I disagree with, but its utilisation.


----------



## Satanta

TTV said:


> ...thats when you have to ask if someone is living beyond their means on borrowed money and borrowed time


I think we could all safely answer yes to this one.

Apologies if I'm taking you up wrong, but if it's an issue simply with mortgage equity release I wouldn't agree. Those same people will/would live beyond means and rack up debt with or without that outlet of credit. Where there's a will and a lack of self control, there's a way!
If it's an issue with the general spending habits of some, then fully agree. They will find themselves in trouble in the very near future, if they aren't some of the ones who've already arrived there.


----------



## Satanta

conor_mc said:


> It's not the product itself I disagree with, but its utilisation.


Technically, this is where a lender will make the greatest profit. They will happily allow it. It's up to the individual to have more knowledge than to allow this, not the ability to do it to be removed.


----------



## DirtyH2O

While I agree that people have borrowed a lot of money I can't help comparing the situation to Ireland in the last two decades when cheap credit was not available.
There were a lot of people in the 1980s who only saw their current accounts leave the red the day their salaries hit their account to return back to overdrawn as the month progressed. With mortgage rates way beyond anything we will see in the next few years at least.
I worked in the lending review section of a bank in the 1990s and there were so many customers who owed a multiple of their salary on car, holiday and personal loans while still renting or living at home and were in the type of jobs that didn't promise any major pay rise to help them escape. As soon as they reduced one loan enough to qualify they would add another to pay credit card or take another holiday.
If this is bleaker than either of those periods I don't see it yet.


----------



## conor_mc

Satanta said:


> Technically, this is where a lender will make the greatest profit. They will happily allow it. It's up to the individual to have more knowledge than to allow this, not the ability to do it to be removed.


 
Absolutely. My point being that in the hands of the financially astute, it's simply a way of being financially astute i.e. lower interest rate.

In the hands of the financially challenged, it's a weapon of personal financial destruction.

That's why I disagree with the heroine comment. It's more like the McDonalds burgers, y'know. Be sensible and eat them in moderation and they're pretty darn tasty. Be an idiot and eat seven a day... well don't come looking to sue McDonalds cos you're overweight.


----------



## homeowner

I think the biggest problem with all this borrowing is going to be when people who are living beyond their means settle down and have kids.  With a 40 year mortgage there is no way one of the parents can give up work or even take a career break.  You will be working till you're 65.  

Its all very well while you are single and have no kids to be changing your car every 3 years and living the high life, but every luxury item you buy is another month or two that you could be spending at home and not working.  It all has to be paid for eventually.  

Personally I think that the OP is very sensible.  So you dont have the flashy cars now, but in a few years if you do start a family, you will have a nice nest egg put away and perhaps one or both of you can take some time off work and enjoy being a family together and get out of the rat race for a while.  To me that would be a much better way to spend your money than on a car or wide screen tv or foreign holiday.


----------



## TTV

> Originally posted by *Satanta*
> 
> Apologies if I'm taking you up wrong, but if it's an issue simply with mortgage equity release I wouldn't agree. Those same people will/would live beyond means and rack up debt with or without that outlet of credit. Where there's a will and a lack of self control, there's a way!
> If it's an issue with the general spending habits of some, then fully agree. They will find themselves in trouble in the very near future, if they aren't some of the ones who've already arrived there.



No problem, as pointed out by conor_mc my analogy wasnt the clearest. The macdonalds one is far better and to represnt our current situation closer it is like a village that has never had a macdonalds or anything and then suddenly one opened. Now the villagers fell in love with Macdonalds - the convenience, the price. They know they are bad for them but watching adverts sponsored by macdonalds with skinny healthy models they continue day by day eating them. Thats how I see the current situation. After that I am all analogied out and also cannot stand macdonalds......


----------



## baby_tooth

everyone here is looking at it from a mortage-interest rate perspective.

what about the flip side of earnings.

i know of carpenters, bricklayers, electricians who take home over 2k a week in cash, after tax, and then have aprox 1k a month in nixers...

things won't be like that for ever....but do they realise this?


----------



## extopia

Glenbhoy said:


> Ah, but Conor, since our economy moved into this new paradigm we will all now work for the full 35 yrs, back in the day the bank knew you'd be lucky to work for 10 of the 20 yrs term, thus we've more time and income to pay it back.



What makes you so sure that you are immune to losing your job - and being unable to find another job with a similar wage - in the event of a downturn in the economy?


----------



## extopia

conor_mc said:


> well don't come looking to sue McDonalds cos you're overweight.



Actually that happens all the time.


----------



## ClubMan

baby_tooth said:


> everyone here is looking at it from a mortage-interest rate perspective.
> 
> what about the flip side of earnings.
> 
> i know of carpenters, bricklayers, electricians who take home over 2k a week in cash, after tax, and then have aprox 1k a month in nixers...
> 
> things won't be like that for ever....but do they realise this?


Maybe they're squirrelling some of it away for the possible rainy day?


----------



## RainyDay

adorado said:


> but yet, shopping centres are packed...Very sad. Go to the Square in Tallaght, just to give yoa an example, and see the kind of people that are spending fortunes that obviuosly don't have any money! I wonder, if tomorrow one of their kids or themselves got sick, or lost their jobs, how would they manage? .


How can you tell who has money and who hasn't, just from a casual encounter in a shopping centre?


----------



## Raskolnikov

Some deluded nonsense posted here. A bank won't let you remortgage your house to buy a car or pay for foreign holidays unless you've taken a significant chunk out of the mortgage (ie, you're middle-aged and earning more than average). If you want a new car, then you take out a car loan from the bank and that's assuming you're managing your mortgage payments. Your credit rating is constantly updated and monitored, if things start getting out of control, it's not long before alarm bells go off and the credit tap is stopped.


----------



## extopia

You're forgetting about "passive" equity due to a rising property market. In other words your house is worth a lot more so you can "top up" your mortgage.

What you spend the money on is up to you. You can't be forced to take out a car loan to buy a car.


----------



## No-one-home

extopia said:


> I think it's just that some people like to spend money and will do so if it's available, whether borrowed or not. Simple as that. Those who choose to be more prudent (or less obviously affluent) are less visible.


 
I live in a small estate of 50 houses built 5 years ago. A quick scan around (and from chats at residents meetings etc.) would suggest that about 20% of the householders are what I would consider "prudent" or "living within their means" the rest seem to be on the "spend, spend, spend" train to no-where. Mercs, BMW's, "investment properties" in Bulgaria or Dubai (or in one case both!) you name it. I was chatting to an EA a few months back and he told me that some of my neighbours have mortgages 5 times that of my own!

I would say that a huge amount of people have blown money on short term purchases through long term borrowings on "equity release".

"Keeping up with the Joneses" has reason to an art form in this country, I nearly burst myself laughing at one house I had to call too recently. It was a 3 bed semi and the driveway wasn't long enough to park a car in and close the gates, not to be detered however the owner had fitted electric gates at the side of the house! They served no useful function but to keep the dog in, but I guess the remote control looks good with the car keys (Lexus) when they are down the pub.


----------



## triplex

interesting thread. Looking at a lot my friends and colleagues ages 28+, who matierally always seem to have everything - hair done weekly, fashionable expensive clothes, houses done to the last, i'm convinced it's because they don't know what else to do with their time...they have no hobbies, conversations are always of a shallow nature - even tv schedules are intellectually starved... so they go shopping, with the credit card..and then drinking at the weekend -  cos they can't think of anything else to do.. the debt is never discussed...

keeping up with the Joneses is only a part of it...


----------



## Johnny1

€110k a year no children driving a couple of bangers and you are wondering how other people manage your troubles are small.


----------



## baby_tooth

Johnny1 said:


> €110k a year no children driving a couple of bangers and you are wondering how other people manage your troubles are small.




is that not the point!!!....ones prudential and alot of others aren't.

makes you think, either the others he is refeering to are amazing money managers and can extract amazing value from each and every euro, or else, they are pulling down alot of debt.

which the stats out there prove to one and all.....


----------



## Johnny1

baby_tooth said:


> is that not the point!!!....ones prudential and alot of others aren't.
> 
> makes you think, either the others he is refeering to are amazing money managers and can extract amazing value from each and every euro, or else, they are pulling down alot of debt.
> 
> which the stats out there prove to one and all.....


 anyone with this sort of income and no expenses should not be worried about how other people manage.


----------



## baby_tooth

Johnny1 said:


> anyone with this sort of income and no expenses should not be worried about how other people manage.



tell me again what the tax rate was again less than 15years ago!

tell me again what fraction of tax the paye worker paid.

come on...coffee time


----------



## Johnny1

baby_tooth said:


> tell me again what the tax rate was again less than 15years ago!
> 
> tell me again what fraction of tax the paye worker paid.
> 
> come on...coffee time


 You might be able to find the answers to these questions when you lose a few of your baby teeth.


----------



## baby_tooth

Johnny1 said:


> You might be able to find the answers to these questions when you lose a few of your baby teeth.




toucheee...lol..

but in fairness it does have a large bearing on everybody.

everything here is property obbsessed and every tom-dick and harry see property as an investment...to the detrement of all other types such as manufacturing or technological companies and so on.

each country needs capital to invest in its country, be that infrastrucutre or manufacturing etc...

instead we buy items made in other countires and send our money abroad. we give them jobs in that they make the goods, tey give us the money to buy the good, we give them the jobs and the interest...

seems a bit one-sided, where they get all the benefit!


----------



## Evolu

... I think the vast majority of people here are safe. We are looking at "askaboutmoney.com" don’t you know!

Its the people that are not questioning there situation on an ongoing basis (like potentially the people the poster posted about originally) that are in trouble (maybe).

It all comes back to financial education doesn’t it! 

The difference between 

1. Net worth and cash flow (I personally know a farmer worth 20-30 million and struggles monthly with the milk quota to support him).

2. The difference between a cashflow asset and a cashflow liability. (One puts money in the pocket monthly the other takes money out... even if its your car and worth 50k. !). I personally know a professional landlord... spent the last 10 years only buying cash assets... now he has 11k a month without working. 

3. The difference between good debt and bad debt. Debt to purchase a cashflow asset is good, debt to fund a boat (which takes money out each month... bad!)

It all comes down to a bit of fundamental financial education! Who knows if these people are financially astute or not, who knows if most of the 04+ BMWs are leases... who knows! 

I tell you one thing do, there is definitely an air of 'keeping up with the jones' and definitely an overvalued property market here boosting peoples spending habits...


----------



## cjh

Raskolnikov said:


> Some deluded nonsense posted here. A bank won't let you remortgage your house to buy a car or pay for foreign holidays unless you've taken a significant chunk out of the mortgage (ie, you're middle-aged and earning more than average). If you want a new car, then you take out a car loan from the bank and that's assuming you're managing your mortgage payments. Your credit rating is constantly updated and monitored, if things start getting out of control, it's not long before alarm bells go off and the credit tap is stopped.


 

Not true - I know two people who've remortgaged their apartments within 12 months of purchase to buy new cars. They didn't use car loans, they used 'equity extractions'. They're both FTB's on average salaries.


----------



## Sarah W

Raskolnikov said:


> Your credit rating is constantly updated and monitored, if things start getting out of control, it's not long before alarm bells go off and the credit tap is stopped.



There is no such thing as credit rating in Ireland - the Irish Credit Bureau records debts and repayment performance but it is not actively managed.

Sarah

www.rea.ie


----------



## Purple

baby_tooth said:


> everyone here is looking at it from a mortage-interest rate perspective.
> 
> what about the flip side of earnings.
> 
> i know of carpenters, bricklayers, electricians who take home over 2k a week in cash, after tax, and then have aprox 1k a month in nixers...
> 
> things won't be like that for ever....but do they realise this?



They are the guys with all the investment properties.


----------



## Duplex

Sarah W said:


> There is no such thing as credit rating in Ireland - the Irish Credit Bureau records debts and repayment performance but it is not actively managed.
> 
> Sarah
> 
> www.rea.ie


 

Hi Sarah, what are your views on the extent of re-mortgaging activity in the market?  I know people who are in the habit of tapping the equity in their homes on a regular basis to pay for holidays; home improvements, credit card debts, etc.


----------



## Stiofan

Purple said:


> They are the guys with all the investment properties.


 

Everyone knows someone in the same position. I seem to be surrounded by them but Babytooth is right, it won't last forever. The only thing is they don't seem to understand that because the majority of them weren't around for the last construction famine, they just don't see a day when they have no job to go to. I once tried to explain to a friend of mine that its risky business working in a trade while owning 3 houses rented out to immigrants working in other trades. If things go bust then you have no job and 3 unrented houses to pay for. I told him it may never come to that but its over exposure none the same. He looked at me like I had 2 heads and told me to lighten up!!!


----------



## Purple

Stiofan said:


> Everyone knows someone in the same position. I seem to be surrounded by them but Babytooth is right, it won't last forever. The only thing is they don't seem to understand that because the majority of them weren't around for the last construction famine, they just don't see a day when they have no job to go to. I once tried to explain to a friend of mine that its risky business working in a trade while owning 3 houses rented out to immigrants working in other trades. If things go bust then you have no job and 3 unrented houses to pay for. I told him it may never come to that but its over exposure none the same. He looked at me like I had 2 heads and told me to lighten up!!!



I agree but a lot of these guys got in a few years ago and have a very low LTV ratio.


----------



## Stiofan

Agreed but alot of these guys have been adding to their property portfolios over a period of time so the last acquisition is often bought using the initial properties as collateral. Correct me if i'm wrong but that leaves the most recent house bearing the brunt of the total portfolio exposure, which ironically is the property with the lowest LTV.

I'm not bearish when it comes to economic forecast regardless of any particular industry including construction but i'm a firm believer in diversifying and that mindset seems to be out of fashion in Ireland.


----------



## Willesden

"How is everybody else surviving? "

Joint income: €60k/year
2 kids
no mortgage, but living in a small apartment in a good-ish area in Dublin
creche fees: €1500/month
have one, loan-free car, which we bought new a few years ago
kids benefits/allowances go to savings
only one of us has pension
€20k savings
no credit card, loans r borrowings
rarely go out, 1 budget holiday a year, with second child, no hope for moving into a house or saving
both of us are teachers

This is how we are surviving the 'celtic tiger'.


----------



## Johnny1

Willesden said:


> "How is everybody else surviving? "
> 
> Joint income: €60k/year
> 2 kids
> no mortgage, but living in a small apartment in a good-ish area in Dublin
> creche fees: €1500/month
> have one, loan-free car, which we bought new a few years ago
> kids benefits/allowances go to savings
> only one of us has pension
> €20k savings
> no credit card, loans r borrowings
> rarely go out, 1 budget holiday a year, with second child, no hope for moving into a house or saving
> both of us are teachers
> 
> This is how we are surviving the 'celtic tiger'.


Is €60k gross income or net income?


----------



## Raskolnikov

Sarah W said:


> There is no such thing as credit rating in Ireland - the Irish Credit Bureau records debts and repayment performance but it is not actively managed.
> 
> Sarah
> 
> www.rea.ie


I'm referring to the ICB. What exactly do you mean by the debt and repayment performance being 'not actively managed'? If a person even defaults in a car loan or can't even pay their telephone bills, this sort of information is recorded by the ICB. If people are living beyond their means, then it's only a matter of time before their ICB record is tarnished and a bank will refuse to touch them with a ten foot pole.


----------



## Sarah W

Mortgages and loans with institutions registered with the ICB are recorded by the ICB as are MBNA credit cards. Utility bills are not recorded by the ICB. Yes, if you miss payments the ICB will reflect this but it does not mean that you will be subsequently refused credit. The ICB have no way of knowing if an individual is living 'beyond their means'.

Sarah

www.rea.ie


----------



## Fly

we sound a bit similar Willesden....

Joint income: €90k gross
2 kids
Mortgage repayments monthly: €1,150
Childcare monthly: €900
Car loan monthly: €300
nights out: once a week (on the cheap!)
holidays (one or two ..again on the cheap)
Savings: childrens allowances only (approx €8k at the moment)
Pensions: we both have
Investments: none
cash to spare at the end of each month: none

We're managing but there isn't much room for error.


----------



## shanegl

Yes, there's no such thing as a centralised credit rating, only credit history. Only financial institutions are involved with the ICB, so non-payment of a phone bill will not be included.

More info:
[broken link removed]


----------



## Johnny1

Fly said:


> we sound a bit similar Willesden....
> 
> Joint income: €90k gross
> 2 kids
> Mortgage repayments monthly: €1,150
> Childcare monthly: €900
> Car loan monthly: €300
> nights out: once a week (on the cheap!)
> holidays (one or two ..again on the cheap)
> Savings: childrens allowances only (approx €8k at the moment)
> Pensions: we both have
> Investments: none
> cash to spare at the end of each month: none
> 
> We're managing but there isn't much room for error.


 You must have about €900/week after tax and these expenses. what about people that have only €44k gross joint income? I know of married couples with a single income of €15-€20k gross and they have to manage with that amount no holidays no nights out no savings or no pensions, what are you complaining about? I was not referring to you willesden it is fly I am referring to.


----------



## Willesden

Johnny1 said:


> Is €60k gross income or net income?


 

gross


----------



## Willesden

Johnny1 said:


> You must have about €900/week after tax and these expenses. what about people that have only €44k gross joint income? I know of married couples with a single income of €15-€20k gross and they have to manage with that amount no holidays no nights out no savings or no pensions, what are you complaining about?


 

With 60K gross/year joint, I was not complaining, simply stating the fact. Anyway, after myself & DH studying our arses off for 8 years at university, looking for better paid jobs with no result in the past 3-4 years, I may even have the priviledge to complain, don't you think?


----------



## Stiofan

Willesden said:


> With 60K gross/year joint, I was not complaining, simply stating the fact. Anyway, after myself & DH studying our arses off for 8 years at university, looking for better paid jobs with no result in the past 3-4 years, I may even have the priviledge to complain, don't you think?


 
You do have a right to complain. Its hardly a great advertisement for third level education or even a vocational job when you hear of people like yourself struggling. In saying that there are alot of people out there that are alot worse off. So yes complain but within reason.


----------



## kramer2006

Willesden said:


> .. after myself & DH studying our arses off for 8 years at university, looking for better paid jobs with no result in the past 3-4 years, I may even have the priviledge to complain, don't you think?


 
Nope. Simply getting a degree does not entitle you to a highly-paid job. You *may* not have done enough research into your chosen discipline before setting off on your career.


----------



## baby_tooth

but do ppl not find it a bit funny that some of the most untrained and unskilled are making huge amounts of money.

take for example blocklayers.
they make the most of all tradesmen and yet their trade is by far and away the simpleist.

or perhaps beauticans, who make a packet waxing and what-have-you...

it just seems that the reward system of pay is somewhat out of line with contribution to society....

it seems strange that country where builders are the richest classes for providing a basic,none too compicated and non technological industry.

how do researchers fare, or perhaps bio-technicians, or anyone of the driving industries for the future. Or waht about entrepreners...the only ones creaming it are in the constrcution related industries...scary to think of the lack of diversification


----------



## room305

baby_tooth said:


> how do researchers fare, or perhaps bio-technicians, or anyone of the driving industries for the future.



Badly in comparison to tradesmen! PhD graduates get offered roughly the same as degree graduates in the IT and bio-tech industries. Jobs aren't exactly plentiful either.


----------



## PGD1

Fly, 

No offence, but if you think things are tight on 90k gross with that mortgage then you are living in cloud cuckoo land.


----------



## ClubMan

Fly said:


> we sound a bit similar Willesden....
> 
> Joint income: €90k gross
> 2 kids
> Mortgage repayments monthly: €1,150
> Childcare monthly: €900
> Car loan monthly: €300
> nights out: once a week (on the cheap!)
> holidays (one or two ..again on the cheap)
> Savings: childrens allowances only (approx €8k at the moment)
> Pensions: we both have
> Investments: none
> cash to spare at the end of each month: none
> 
> We're managing but there isn't much room for error.


Assuming that you are married and each is earning €45K then your monthly take home ignoring pension contributions should be about €5.8K. €2.3K is going on mortgage, childcare and car loan leaving about €3.5K for everything else. Your pension contributions will presumably attract full tax/_PRSI _relief. How on earth are you finding it tight!? There must be some missing or erroneous information here even allowing for my assumptions while calculating things roughly?!


----------



## ClubMan

Willesden said:


> "How is everybody else surviving? "
> 
> Joint income: €60k/year


Which should be about €4K net per month.


> no mortgage, but living in a small apartment in a good-ish area in Dublin


What rent?


> creche fees: €1500/month


So that leaves c. €2.5K for rent and all other expenses?
have one, loan-free car, which we bought new a few years ago[/quote]
What is the cost of servicing the loan?


> only one of us has pension


What contributions?


> €20k savings
> no credit card, loans r borrowings
> rarely go out, 1 budget holiday a year, with second child, no hope for moving into a house or saving
> both of us are teachers
> 
> This is how we are surviving the 'celtic tiger'.


----------



## Glenbhoy

Willesden said:


> "How is everybody else surviving? "
> 
> Joint income: €60k/year
> 
> €20k savings
> both of us are teachers
> 
> This is how we are surviving the 'celtic tiger'.


If you don't mind me asking - that income sounds very low for both of you being teachers - how many years service have you both?


----------



## nelly

baby_tooth said:


> but do ppl not find it a bit funny that some of the most untrained and unskilled are making huge amounts of money
> take for example blocklayers.
> or perhaps beauticans,



so they work in an area that does not take 8 years to qualify but i think they might take issue with you they term "unskilled" - ask an unskilled beautician for a brazillian and come back and discuss it.. seems like a snobbish statement if i may say so. 
they will get tips and gifts if they are good at that they do. 



baby_tooth said:


> Or waht about entrepreners...the only ones creaming it are in the constrcution related industries...scary to think of the lack of diversification



I would class a beautician/ hairdresser/ nail technician who sets up his/her own business and meets market demand as an entreprener and the good business minded make a heck of a lot. 



baby_tooth said:


> it just seems that the reward system of pay is somewhat out of line with contribution to society....



Again - that statement is definately open to discussion, 
the example of the 2 teachers as above, if these 2 professionals gave grinds, music lessions, after school clubs, reffed sports etc etc as other more monetary minded teachers I know of it is possible they could match any other professionals wages. Just because they worked hard at school for years does not make entitled to a job or to look down on folks who saw a gap in the market, did the beauty therapy course for 18 months and work hard for the "luxuary" of owning their own business. Fair bowls to them as the man said.


----------



## nelly

room305 said:


> Badly in comparison to tradesmen! PhD graduates get offered roughly the same as degree graduates in the IT and bio-tech industries. Jobs aren't exactly plentiful either.



they have no industry experience so why pay a premium for graduates? 
why would an industry pay for a BSc grad, say analyical chemist when a person wiht an IT cert can do the job just as well for just over half the money?


----------



## baby_tooth

nelly said:


> so they work in an area that does not take 8 years to qualify but i think they might take issue with you they term "unskilled" - ask an unskilled beautician for a brazillian and come back and discuss it.. seems like a snobbish statement if i may say so.
> they will get tips and gifts if they are good at that they do.
> 
> 
> 
> I would class a beautician/ hairdresser/ nail technician who sets up his/her own business and meets market demand as an entreprener and the good business minded make a heck of a lot.
> 
> 
> 
> Again - that statement is definately open to discussion,
> the example of the 2 teachers as above, if these 2 professionals gave grinds, music lessions, after school clubs, reffed sports etc etc as other more monetary minded teachers I know of it is possible they could match any other professionals wages. Just because they worked hard at school for years does not make entitled to a job or to look down on folks who saw a gap in the market, did the beauty therapy course for 18 months and work hard for the "luxuary" of owning their own business. Fair bowls to them as the man said.


 
teachers are very important to society,bricklayers aren't.
simple as that.

Educvation benefits society as it raises the lving standards of the the country, exactly what has happened in ireland in the past.

You say a beautician setting up on their own are entreprenuers, in a sense i agree with you, but how are they contributing to society, how are they advancing our country?

What they are doing is replication. Economic theory and economic common sense will show that there is nothing as advantageous as technological advances that improve society. Throwing money or labour at something will only achieve so much before diminishing returns reduce the cost of providing this service. This is exaclty where we are with alot of trades, equilibrium will arrive in due time, when we realise that we don't need 1 in 8 to work directly in construction. But by this stage, alas we will be back to playing catchup to other economies that have moved ahead in improving thier lot.

Its a static and slowly moving market, it could take years to get back on track.

And for those reasons, generally summisied, is the basis of my point.


And yes, perhaps it does stink of snobbish attitude, but it's also reality, the way of the world, economics makes us all tick, whether we realise it or not!!


----------



## Willesden

Glenbhoy said:


> If you don't mind me asking - that income sounds very low for both of you being teachers - how many years service have you both?


 
One of us works is doing an ordinary office job, other of us is in TEFL.


----------



## Willesden

I am getting out of this tread...IMO the bottom line is, that unless you get a degree/professional qualification/trade in your 20s, and then work only within that area for the next 10-20-50 years, you should not expect your opportunities and salary be fantastic. 

Yes, we are probably too over qualified with not much experience in our relevant fields...and no school, college or company is willing to give us the job to gain the needed experience.

By the way, the icing on the cake is that I will be made redundant in the New Year.


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## nelly

baby_tooth said:


> teachers are very important to society,bricklayers aren't. simple as that.
> 
> Educvation benefits society as it raises the lving standards of the the country, exactly what has happened in ireland in the past.
> 
> You say a beautician setting up on their own are entreprenuers, in a sense i agree with you, but how are they contributing to society, how are they advancing our country?



Well surely it depends on the person - just because someone joins the ranks of the "profession" does not mean they will conform to the ideals of the vocation. A bricklayer and beautician can give back to society as much as a teacher if they choose to. I know of one hospice who has beauticians come in and give treatments for free to terminally ill people - one forgotton section of society benefit. Same lady's son plays piano a few evenings a week in a nursing home for his Gaisce award...
How many folks have you heard of going into teachin for 3 reasons, June, July and August? About 6 folks i know are on the postgrad courses for primary teaching, it was not their lifes passion but the taste of the real world was no comparison, they had the money and ambition to change career for one where they work half they year - good luck to them, but maybe they might give back to society less than a caring person outside the ranks of the professions? Who knows. I just think it is too simple to look down your nose at folks who took the road less travelled as we can all contribute to our community.

the question of "advancing society" I think is seperate - however this is going off topic enough as it is


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## nelly

Sorry to hear that Will...however after my own job being made redundant i learned the hard way - in no situation can you "exect" a salary, thats why competence, ability and motivation will always win. 
My advice - do your best to think of what you can do next and not what you could have or should have done. 
I wish you all the best after christmas.


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## baby_tooth

Willesden said:


> I am getting out of this tread...IMO the bottom line is, that unless you get a degree/professional qualification/trade in your 20s, and then work only within that area for the next 10-20-50 years, you should not expect your opportunities and salary be fantastic.
> 
> Yes, we are probably too over qualified with not much experience in our relevant fields...and no school, college or company is willing to give us the job to gain the needed experience.
> 
> By the way, the icing on the cake is that I will be made redundant in the New Year.


 

sorry to hear that. hope things work out well.


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## dontaskme

baby_tooth said:


> teachers are very important to society,bricklayers aren't.
> simple as that.


 
Does not really make sense to say that. If all the bricklayers in a society became teachers overnight, how long would that society continue to function? No houses would be built, no new schools, architects would go out of business, as would builders providers, all other construction workers also, no new factories etc etc.

Unless of course they started using concrete instead of laying bricks but then you would have to say those concrete layers were as important to society as anybody else.


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## room305

nelly said:


> they have no industry experience so why pay a premium for graduates?
> why would an industry pay for a BSc grad, say analyical chemist when a person wiht an IT cert can do the job just as well for just over half the money?



Exactly. The companies do not place a premium on PhD graduates over BSc graduates because the jobs they are offering do not require a PhD holder. It is of little value to company.

So why is the government planning to spend billions in funding to increase the number of PhD graduates?


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## polaris

room305 said:


> So why is the government planning to spend billions in funding to increase the number of PhD graduates?


 

This is something I have wondered myself. The government obviously wants to promote the creation of high value R&D type jobs to replace the lower-skilled manufacturing jobs that we will lose to lower-cost economies over the next few years.

Therefore, by churning out large numbers of PhD graduates I guess they hope that this will entice big Pharma etc will move their R&D divisions here.

Alternatively they might be hoping that some of these graduates will get the ball rolling and start up biotech/IT firms themselves.

Either way, I wouldn't want to be in the first wave of this new doctorate army as there isn't that many jobs currently available for them.


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## Stiofan

nelly said:


> they have no industry experience so why pay a premium for graduates?
> why would an industry pay for a BSc grad, say analyical chemist when a person wiht an IT cert can do the job just as well for just over half the money?


 
Sure why bother educating yourself at all!! The reason you pay more for a BSc grad is because that have proved their ability to apply themselves to their chosen field. If you need to be told the difference between getting a cert or a degree then I just hope to god you ain't involved in HR!!!!


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## polaris

Most employers are willing to pay a premium for graduates. In many cases you will only learn the specific skills/knowledge required for the job at a 3rd level institution. 

In other cases, employers still prefer to hire graduates of any background and train them to do the job. They do this because they recognise that to get their degree, the person has to possible certain abilities such as dedication, critical thinking, communication skills etc which are required in most employment.


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## nelly

Stiofan said:


> Sure why bother educating yourself at all!!


I am all for education - am a grad myself but you should get the job because of your ability to do required work and also to fit into a surrounding - sometimes PhD's won't "fit" the organisation - i am thinkin of one guy who is out of work for a year before finding a place to work, over qualified. 



Stiofan said:


> The reason you pay more for a BSc grad is because that have proved their ability to apply themselves to their chosen field.


Agreed. however example a person with a cert could be hired to work as a lab analyst, do the job effectivly, continue studying at night and graduate (commanding as much and often more than their degree counterparts) surely that has proven that they have applied themselves and at the same time been career focused enough to gain both education and experience in tandum - accountancy springs to mind for example. the Finance dept where i work has a fair few of these folks. or HR where folks work at night too...



Stiofan said:


> If you need to be told the difference between getting a cert or a degree then I just hope to god you ain't involved in HR!!!!



I know the difference however in the field i work in the degree is not all that is the job requires - a level of competence and knowledge is also required. Degree grads get a pittance starting off compared to folks with cert or dip or trade and field experience. 

It may be contraversial but if it was untrue there would be no unemployed graduates and lots of unemployed undergrads. 

Businesses are in business to make money and have cost effective hiring starigies and not merely to give graduates jobs where non-grads can do the same job at 2/3 of the pay. 

Obviously you don't agree with my take on things but my theory is based on my own life experience - yours probably just the same.


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## StoppedClock

room305 said:


> So why is the government planning to spend billions in funding to increase the number of PhD graduates?


 
It could be to drive down the salaries of everyone else and once more sell Ireland as a low cost destination. This won't work obviously but the government are not averse to spending billions on pointless exercises.


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## room305

StoppedClock said:


> It could be to drive down the salaries of everyone else and once more sell Ireland as a low cost destination. This won't work obviously but the government are not averse to spending billions on pointless exercises.



Better to spend the billions in lowering tax take and reduce wages that way. Many businesses seem reluctant to take on PhD graduates in any case because they are "over-qualified" and prefer to hire BSc graduates instead.


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## sunrock

Well  i`m  inclined to agree with polaris.
The gov knows we can`t compete  on wages with most other manufacturing countries.
Minister mairtin was on the telly recently.....of course he would never say we got to reduce our wages to attract multinationals...no,no,no.....because that is not what the job applicant wants to hear...
So he goes the ...more education route...this keeps the big job dream alive for students  and big job applicants and also buys a few more years ,as it does take a bit of time to get a phd ......
Getting a phd is much easier on the student as there are no exams to fail and the student is in the studying/research groove as well as enjoying a nice social life.
As well the government are going to fund these future phds ... to fulfill their promise and of course everyone involved agrees that it`s a good strategy.
Will there be jobs for these phds once they qualify....its debatable as lots of countries have lots of phds.
The other question is..what is going to happen with all the degree students...they can`t all be phds.
The big problem is the gov is relying on courting the big american mulinationals to do their cutting edge research in ireland.....there is no plans for these phds to help launch irish companies.
Its likely we`ll end up with too many chiefs , and many of the chiefs are going to end up competing with the footsoldiers for work.


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## room305

sunrock said:


> Getting a phd is much easier on the student as there are no exams to fail and the student is in the studying/research groove as well as enjoying a nice social life.



Ha, ha. That's what I thought initially. Turns out to be much different in practice.


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## ajapale

thread moved from TGD to LOS


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## nelly

sunrock said:


> Its likely we`ll end up with too many chiefs , and many of the chiefs are going to end up competing with the footsoldiers for work.


already happening to a degree in some sectors. or earning half what the footsoldiers are earning with less benefits such as union recognition etc...


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## bazermc

Buddyboy said:


> I feel as if I am missing something here? Can anybody enlighten me?


 

Credit card, credit card, credit card and more credit cards.

Maybe some personal loans aswell.

Oh and of course dont forget releasing equity malark see this thread


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## ludermor

Blocklayers ( and trades in general) do earn a lot of money but they have a far shorter worklife than standard jobs. You wont find too many blocklayers working into their 50's, and while some may have made enough to retire and put the feet up most have to stop because their body cant take the work


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## ludermor

baby_tooth said:


> but do ppl not find it a bit funny that some of the most untrained and unskilled are making huge amounts of money.
> 
> take for example blocklayers.
> they make the most of all tradesmen and yet their trade is by far and away the simpleist.


 
That is such an ignorant statement. I work for a builder and have no great love for blocklayers but to say it is an untrained unskilled and easy job is a joke. They have to do a 4 year apprenticeship and the physical abuse the body takes is huge. Most have a work life of less than 30 years so they have to make enough in that time to cover the rest of their lifes (i never thought id be defending blocklayers)


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## Winnie

baby_tooth said:


> but do ppl not find it a bit funny that some of the most untrained and unskilled are making huge amounts of money.
> 
> it just seems that the reward system of pay is somewhat out of line with contribution to society....


 
Thats rubbish.  The 'reward system' as you put it is nothing to do with how much someone's job contributes to society - if you are going by that benchmark then it is not just unskilled labour that is overpriced but every job that you deem to be not worthy....what about accountants, how do they add value to society etc.  
In general pay is based on supply and demand - if you have lots of people willing to work at a particular job for low money then that job will be low paid, but if no-one wants to do the job & the only incentive to do it is pay then the pay will have to be higher (eg prison officer)
For those who think that a particular profession is underpayed (eg teachers) then why is there still so many people going into the job - there must be other incentives besides money.


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## Glenbhoy

I am in total agreement Winnie, demand and supply is the key.



> what about accountants, how do they add value to society etc.


But there was just no need for that


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## sunrock

Supply and demand is only half the story.
For example teachers get well paid ...about50k +benefits per annum.
But there are thousands of teachers who are waiting for a permanent job, and if supply and demand were the deciding factor , we could employ more teachers at a reduced salary.
The fact is that in many jobs ....there is a rate for the job...especially in the public service.What use is supply and demand in jobs like accountants,solicitors etc whose representative bodies make sure that supply is curtailed?
No doubt in the private sectors of construction,cleaning,retail and hospitality, supply and demand are more important.Where our immigrants can be employed , wages will face downward pressure with the minimum wage acting as a floor.


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## HotdogsFolks

triplex said:


> interesting thread. Looking at a lot my friends and colleagues ages 28+, who matierally always seem to have everything - hair done weekly, fashionable expensive clothes, houses done to the last, i'm convinced it's because they don't know what else to do with their time...they have no hobbies, conversations are always of a shallow nature - even tv schedules are intellectually starved... so they go shopping, with the credit card..and then drinking at the weekend - cos they can't think of anything else to do.. the debt is never discussed...
> 
> keeping up with the Joneses is only a part of it...


 
Excellent point. This would describe most of my colleagues/friends too (also in the 28~ age bracket.) Their life is so safe, so routine, that they don't know what to be doing with themselves. They have no hobbies, or are simply jaded, so they go shopping and drinking. They've never had to worry about anything: when they finished school, the economy was booming; IT jobs were everywhere. Straight into college to earn an easy IT Degree. Straight into a job. Can jump/switch jobs at their leisure. Salaries always seem to be increasing. The economy is on the up and up. The streets are fairly safe. They've never been in a fight. They're surrounded by lovely looking Eastern European women.

Basically, they have no problems. They are a bit bored, jaded.

I don't know anyone (again, anecdotal) who is trying to keep up with the joneses. It's simply a case of not knowing what to do with their time or with their money, and not being aware of the concept of _life can be a bitch_.

It's reminds me a bit of the anti-depressant crowd at the moment. Rather than figuring out what's wrong and trying to improve themselves, the solution is a few XXXXXXXXXXXXXXXXXXXX. It's so easy, so they just keep on going...

Bah.


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## annR

Wow that's pretty hard core and a bit David McWilliams-esque.   Wonder what he'd call it.  They must be single/no kids people you're referring to because it's hard to imagine anyone with kids having much time to spare (unless they're a yummy mummy of course).

I do know what you mean though.  There seems to be a lot of people that age clad in their nice clothes but going flabby underneath and who don't seem to have much going on.  

However it's probably an over generalisation.  A lot of people come across pretty dull but only because you don't know them.


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## daithi

hmm..maybe we should just get on with our own lives and let everybody else worry about theirs....

d


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## Purple

ludermor said:


> Blocklayers ( and trades in general) do earn a lot of money but they have a far shorter worklife than standard jobs. You wont find too many blocklayers working into their 50's, and while some may have made enough to retire and put the feet up most have to stop because their body cant take the work



I agree with you about bricklayers and take your general point but to talk of "Trades" and "Professions" as if they were two totally separate groups that had no cross over is simplistic. To say that all trades or all professions are of comparable skill is also incorrect.
A master carpenter is a much more skilled job than a tiler (and I'm not saying that tiling is not a skilled job). A mould maker is a much more skilled person than a fitter. By the same token a medical doctor is a more skilled than a teacher (7-10 years training verses a primary degree and a one year h-dip and a barrister is more skilled than a nurse. The case could be made that teachers and nurses are not professions as they are not subject to the sanction of a statutory self regulating body of their peers but that’s a different thread…


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## elefantfresh

Hotdogs, Hotdogs Hotdogs. What are you saying?? "an easy IT Degree". I'm not the smartest guy in this country but i'm far from the dumbest and i found very little easy about doing mine. Maybe you're a lot smarter than me but i do feel thats a rather flippent remark.


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## ClubMan

HotdogsFolks said:


> It's reminds me a bit of the anti-depressant crowd at the moment. Rather than figuring out what's wrong and trying to improve themselves, the solution is a few XXXXXXXXXXXXXXXXXXXX. It's so easy, so they just keep on going...


What "anti-depressant" crowd? Do you actually have any experience or knowledge of such drugs? If you did then you would know that drugs such as _SSRIs _simply help stabilise serotonin levels in those suffering from serotonin depletion and this can help ameliorate symptoms of clinical depression and anxiety disorders as diagnosed properly by health professionals. Those not suffering from such ailments or without depleted serotonin levels are unlikely to experience any remedial effects from such drugs - since there is nothing to remedy. Also - such drugs only start stabilising serotonin levels after several months of usage and any decent medical practitioner will also recommend a dual pronged approach of drugs and counselling rather than just drugs alone. They are neither quick fix solutions nor are they some sort of "pep" XXXXXXXXXXXXXXXXXXXX. Misinformation about such drugs, their applications and effects is sadly pervasive and simply serves to militate against reasoned discussion of this one means of treatment for depression and related illnesses.


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## HotdogsFolks

ah don't take it personally clubman. I know loads of people on anti-depressants. It's really sad. It kills them a bit inside, but they don't seem to have the motivation to figure out the problem is most likely _not_ chemical but rather their poor choices in life.


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## Purple

HotdogsFolks said:


> but they don't seem to have the motivation to figure out the problem is most likely _not_ chemical but rather their poor choices in life.


How do you know this? Are you a mental health professional?


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## smiley

Hot dogs..you are coming across as a pure ignoramous...your comments are arrogant, flippant and insulting. They hold no credibility. 'Antidepressants kill people a bit inside'... i find it hard to understand how you seem to know this?...get a grip hotdogs!!


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## ClubMan

Er ... I don't necessarily agree with the comments in question either but...



If you disagree with somebody's comments then address their comments and don't start flinging personal insults.


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## Gabriel

HotdogsFolks said:


> Straight into college to earn an easy IT Degree. Straight into a job. Can jump/switch jobs at their leisure. Salaries always seem to be increasing. The economy is on the up and up.



If you knew even a little about the IT sector over the past ten years you'd know this statement to be completely untrue. Simply not true! Five years ago there were no IT jobs to be found.

And if you think an IT degree is "easy" you should try it yourself. I work harder than most people I know in any profession. Software development is widely recognised as being one of the hardest working, longest hours for least reward businesses out there. 
And for the record I'm in the lucky position of working in the sexy end of IT...working for a very successful Irish IT company, in a senior role. I work my ass off....and we're constantly on the go. 60-70 hour weeks were the norm for all of 2006 to make sure we met our contractual obligations to hang onto our biggest customer. The same is true of anyone working in more private sector IT companies. Banks are a different story.


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## HotdogsFolks

Gabriel said:


> If you knew even a little about the IT sector over the past ten years you'd know this statement to be completely untrue. Simply not true! Five years ago there were no IT jobs to be found.
> 
> And if you think an IT degree is "easy" you should try it yourself.


 
I work in IT (software developer) and I have an IT degree! I've never had any problems finding an IT job, and I've jumped around a bit...


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## jmayo

Originally Posted by *HotdogsFolks* [broken link removed] 
_Straight into college to earn an easy IT Degree. Straight into a job. Can jump/switch jobs at their leisure. Salaries always seem to be increasing. The economy is on the up and up._

Agree totally with Gabriel.
hotdosfolks, I would love to know why so many IT guys were out of work 5 years ago after startups went bust, myself and my friends included.
Where did you get your degree because you definetly did not do a proper IT related degree never mind one of the engineering (computer or electronic) ones if it was so easy.
Either that or you are a genius.

And saying that you work in development can be anything from working with real-time embedded systems to building websites with fronpage.

[broken link removed]


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## HotdogsFolks

jmayo, so you're allowed say you think IT in college is hard, but I'm not allowed say it is easy?

I never experienced the no IT jobs thing. I do of course remember the dot com bubble, but I was always a C guy rather than a web developer (IT is after all a big area...) But of course the jobs market wasn't always totally booming.

How did I not do a proper IT degree?? I'm not sure what you're trying to get at there. Did you do IT "by accident" or are you mathematically inclined? I think the problem you may be talking about is that a lot of people aren't suited for IT (shouldn't really have taken IT as a career choice) because they either don't like or aren't very good at maths...

For the record, I always found my college maths tough, but enjoyable tough, so the exams were never a problem.

All I can say is my friends and I found college easy. Sorry that this offends you. IT certainly isn't easy only for "genuises" as you suggest! We're fairly normal people...!!

/edit: this is kind of embarrassing actually. can we move on??


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## jmayo

Last point:
I do know some people that made it through college and got IT degrees and I can't figure out how they did it, because they did not have a clue what was going on.
So maybe some degrees are easier than others.
2000 and 2001 saw lots of people move into IT, and really half of them should not have been in it, the other half should have been in it all the time.
So much for the points system.
All I know is anybody that did more engineering related degrees usually did not find them easy.  Some classes were ok but others were pain in **** to do.
Also four years is long time to spend having to study, do labs, do projects, learn to live on little or no money and make your own booze, so the apprenticeship is hard.

Anyway what is this thread about again?


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## purplealien

On the car issue - my husband gets a new 520D BMW every year and i get a new 316i BMW on the 2nd of Jan every year. So if you passed us you might think we're loaded! Far from it - My husband sells Bmw so his is free (with the exception of BIK). I also get to change my car every year for next to nothing and i see my car as savings or the ssia we never did.
So maybe all the people in the new cars that you see around the place work for some dealership!


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## purplealien

Sorry for getting off te IT section of the thread - just wanted to add something to what the thread is meant to be about.


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