So was everyone living way beyond their means

[MrMan]

But just as con-men use the justification that the only people that suffer from their exploits are idiots, so we see the vested interests now claims that it was the fault of the ordinary working people of this country.

Hang on to your hysteria a moment and question why you think someone is at fault here? Why feel the need to blame anyone for a market crashing, did people give credit to 'vested interests' for the boom? My point all along is the blame game is fruitless and serves no point and that people do have to look at themselves and realise there own responsibilities. I can say that someone was foolish to purchase something that was overpriced but i don't condemn them for or feel happy that they are in distress. People now face huge debts from a multitude of differing borrowings not just houses, lets not forget the repayments on tvs etc were generally around 29%apr.

But yes, you're right, MrMan; all these ordinary people were idiots to listen to the government, the media and bulls like you. They're getting everything they deserve, eh?

Maybe thats why you letters weren't published because if they were anything like the above statement they would be considered misleading, sensationalist, and above all else complete nonsense. Try counting to ten before posting next time.

 

[z104]

I must say I lived beyond my means but do you know what, I had a great time, put myself through college ( no grant or financial help from family) saw half the world, bought a house, drive a new car. I have nice holidays. Life is good. Alot of memories and still young.

I have a pension and investment property that is making a profit so i'm not totally financially irrisponsible.

If I didn't borrow I wouldn't have a house or an investment property or a nice car or nice holiday or as many life memories and experiences.

The main reason to have rainy day money is to cover you incase you lose your income. You can take out an insurance policy to cover this.

I'm not advocating getting so much into dept that you are totally stressed but there are some people here that consider debt a dirty word. It's not. Debt and borrowing has it's place as long as you can control it.

 

[Dreamerb]

Dept and borrowing has it's place as long as you can control it.

You're completely correct of course, but that "control" is the problem, isn't it?

There seem to me to be many people who believe that if a bank or credit institution will offer them finance, they must be able to afford it - that the banks' willingness to provide a loan is in itself a guarantee that the loan is "affordable". And historically, that has not necessarily been an unreasonable assumption, especially in relation to mortgages where lending criteria erred if anything on the conservative side.

However, with the introduction of a lighter regulatory regime and in particular the loosening of mortgage lending criteria [from what? - about 2004 on?], a greater level of responsibility for the management of personal debt has effectively shifted from the banks to the customers - but largely unheralded, so people have not been made aware of and urged to assume that additional responsibility. How many times have any of us heard of people - friends, relations, even some of us - seeking mortgages on the criteria of the maximum amount they can get, without so much as a mention of the repayments?

Of course, people who have got themselves into excessive levels of debt do themselves bear a substantial measure of responsibility - but it's not always as black and white as some would portray it, and I do think that aggressive competition in the supply of credit in a relatively low-regulation environment has often been to the detriment of the least financially informed [and sometimes arithmetically competent] customers.

And that's ultimately bad for everyone. It's bad for the banks, which have a higher level of underperforming or risky loans - not that the domestic mortgage credit area is the biggest problem at the moment, far from it, but the risk level has certainly risen very substantially; it's bad for the people who have taken on unwise levels of debt in a generally deteriorating economic environment; it's bad for the wider economy since people are retrenching their finances to service debt and thus seriously reducing the level of consumer activity; it's bad for society, the taxpayer, the new unemployed...

 

[Simeon]

No, I don't think that most people were spending beyond their means. By that I mean, anymore so than people who use their cards as a way of spending money which (at the time) they do not have. By and large, people are responsible. Buying a house is an investment ........ investments can go both ways, but in the long term these people will be OK if they can survive the downturn. We are all puppets to market vagaries. On the other hand, I met a woman just after Christmas ......... 90 years old, several houses in good locations, free of mortgage for up over 30 years, as tight as a DA and worried about the price of home heating oil. So a bit of balance is called for. Optimism rather than pessimism is good for the soul (and the markets!). The sun will rise again tomorrow, the day after and the day after ad infinitum. Please no astronomers (amateur or otherwise) nitpicking the last line - you know what it means!

 

[tallpaul]

I must say I lived beyond my means but do you know what, I had a great time, put myself through college ( no grant or financial help from family) saw half the world, bought a house, drive a new car. I have nice holidays. Life is good. Alot of memories and still young.

If I didn't borrow I wouldn't have a house or an investment property or a nice car or nice holiday or as many life memories and experiences.

Does this not just sum up what was wrong with Ireland during the Celitc Tiger years or what? The shallowness and materialism of modern Ireland encapsulated in two paragraphs... shudder...

 

[truthseeker]

There seem to me to be many people who believe that if a bank or credit institution will offer them finance, they must be able to afford it - that the banks' willingness to provide a loan is in itself a guarantee that the loan is "affordable".

I couldnt agree more with this statement. I personally know one guy who remortgaged his home to buy a very expensive 4x4 (absolutely no need for one, its used to drop kiddie off to creche ina surburban area) and there was no talking to him about how bad an idea it was. His argument was 'the bank wouldnt let me do it if it was a bad idea and I couldnt afford it'. He truly believed (and probably still does) that the bank was some sort of independant finanical advisor and once they said yes it meant it was all ok.

 

[Simeon]

Truthseeker, your friend ought to have been sectioned prior to this. Did is wife go along with this? However, if his job is secure etc. ......... he should still be sectioned!

 

[truthseeker]

Truthseeker, your friend ought to have been sectioned prior to this. Did is wife go along with this? However, if his job is secure etc. ......... he should still be sectioned!

His wife was happy to go along with it - she is happy for the neighbours to see they are 'doing well'.

His job (own company) is now looking like its going down the tubes.
The wife has a secure(ish) job.

The whole car thing was all about image. Every time I see him he passes comment on my car (are you still driving that piece of junk, wow im surprised that thing still goes....etc....etc....). The difference between us is that I bought my car outright for a few grand over 4 years ago and it only costs me fuel/tax/insurance/services to run and I dont care what the neighbours think of what i drive!!! To him its important to be seen to be doing well so he would prefer a crazy debt (remortgaging a home to buy a vehicle!!!!), whereas I would prefer to get from A to B as cheaply as possible and debt free.

To this day he cannot see why it was a bad idea.

 

[Guest116]

Does this not just sum up what was wrong with Ireland during the Celitc Tiger years or what? The shallowness and materialism of modern Ireland encapsulated in two paragraphs... shudder...

No I dont think it does. He is only saying he has enjoyed life and hasn't got himself into much debt. Its not shallow to do well.

 

[casiopea]

Does this not just sum up what was wrong with Ireland during the Celitc Tiger years or what? The shallowness and materialism of modern Ireland encapsulated in two paragraphs... shudder...

Hmm, dont agree. The poster sounds like he knows he squanders some cash but that some was wisely spent (putting himself through college) and that he enjoyed himself. He doesnt sound like he's blaming anyone for debt he may currently have.

Whats that phrase....from George Best I think....."I spent a lot of money on booze, girls and fast cars. The rest I just squandered."

 

[Simeon]

Truthseeker, how come he didn't get the 4x4 on the company? Perhaps things were not as good as they seemed even then. I'm with you on the old car scenario. Have not splashed out big money on four wheels since my 20s. But I have promised Mrs Simeon that as soon as I retire we'll buy something more modern. Strictly cash only!

 

[MrMan]

Does this not just sum up what was wrong with Ireland during the Celitc Tiger years or what? The shallowness and materialism of modern Ireland encapsulated in two paragraphs... shudder...

It seemed to sum up someone who was content with their lot and happy about the decisions they made and the experiences they enjoyed, I can't find fault with that. People can be materialistic but so what if it brings some form of happiness to them its a good thing, you will be a long time dead so if the opportunity of happiness arrives take it.

I grew up enjoying holidays in a friends caravan and loved it but that was because my horizons were not broadened by what the world has to offer, so going on foreign holidays something I thank the celtic tiger for.

 

[truthseeker]

Truthseeker, how come he didn't get the 4x4 on the company? Perhaps things were not as good as they seemed even then. I'm with you on the old car scenario. Have not splashed out big money on four wheels since my 20s. But I have promised Mrs Simeon that as soon as I retire we'll buy something more modern. Strictly cash only!

Already has one company vehicle, other partner said no I think.

My motto has always been to buy a car for cash and drive it til its worthless. Only been through 2 so far (still on second one!)

 

[Bronte]

and I dont care what the neighbours think of what i drive!!!

And sometimes it's better to be driving a banger rather than let the neighbours think you are doing well. I remember one landlord who had many properties, he used to collect rent in the worst car imaginable so the tenants wouldn't give him any grief.

When you tell stories about people remortgaging for a car I shudder, it sends shivers down my spine. Maybe he can live in the car if he loses the house. They do in America.

 

[Askar]

I recall reading an article on The Motley Fool website. It compared hypothetical individuals of same age and income and considered roughly 10 year scenario between 20 and 30. One individual starting acquiring debt at 20 for 'things' eg holidays, stereo etc. while other individual saved to buy. At 30, the saver had the same number of 'things' and more cash to buy more 'things' than the borrower - I think the moral of the hypothetical story was that % of income paid on interest repayments is a larger opportunity cost then you might think; and has a bigger impact on your ability to purchase going forward then you might think.

 

[Towger]

My motto has always been to buy a car for cash and drive it til its worthless.

Tut tut, you should drive it until it cost more to keep it on the road than replace it

I remember one landlord who had many properties, he used to collect rent in the worst car imaginable so the tenants wouldn't give him any grief.

I think I know him! Was/is his house a wreck as well?

 

[truthseeker]

Tut tut, you should drive it until it cost more to keep it on the road than replace it

Well I suppose that is what I meant.
My other motto is only pay cash for a car - no loans, hp etc.... (and only buy a small car)

 

[krissovo]

I have been living to my credit limit for the majority of my working life. I have gone from being a private in the military earning a very little amount and struggling to support my family to my existing role as solution architect for a major global outsourcing business where I earn a decent salary and a very decent 15 to 20% annual bonus and even bigger bonuses for a successful sale (one or two a year). The bottom line line is that come the end of the month I still have roughly the same amount of cash in the bank now as when I was supporting my young family as a junior soldier.

The only differences between then and now is that my credit limit has dictated the home I live in, the car I drive, the size of TV, the holidays I take, meals out etc etc....

Take my car, in 1990 I drove a renault 21 estate that was on its last legs. I now replace my BMW 5 series every two years. For holidays, in 1990 I used to camp for two weeks in the summer in west Cork or Kerry and I now visit Dubai or the Caribbean for 10 days every February as well as decent holiday in the summer in a nice location so no Malaga, Majorca or other tacky resort. My home has gone from a one bed apartment where I slept with my soon to be wife (now ex) and our baby at the end of the bed to a swanky appartment in the city with my girlfriend and I am building my dream 4 bed home and a nice piece of land with all mod cons mostly funded by my credit limit.

I could go on but my point is you have to live life for the moment not for planning hording funds (pension, property, shares, hedge fund etc etc) for any number of senarios that may or may not happen and sit on cash that could dissapear with any number of events like a bank crash or bad exchange rate and so on.

Live life and enjouy it! You only get one shot at living so make the most of it! If the worst happens so be it but be possitive and you will continue to live.

Take care everyone, I wish you all the best during this tough period but IMO its mostly media hype that it causing this downturn and causing mostly needless worry!

 

[chrisboy]

I have been living to my credit limit for the majority of my working life. I have gone from being a private in the military earning a very little amount and struggling to support my family to my existing role as solution architect for a major global outsourcing business where I earn a decent salary and a very decent 15 to 20% annual bonus and even bigger bonuses for a successful sale (one or two a year). The bottom line line is that come the end of the month I still have roughly the same amount of cash in the bank now as when I was supporting my young family as a junior soldier.

The only differences between then and now is that my credit limit has dictated the home I live in, the car I drive, the size of TV, the holidays I take, meals out etc etc....

Take my car, in 1990 I drove a renault 21 estate that was on its last legs. I now replace my BMW 5 series every two years. For holidays, in 1990 I used to camp for two weeks in the summer in west Cork or Kerry and I now visit Dubai or the Caribbean for 10 days every February as well as decent holiday in the summer in a nice location so no Malaga, Majorca or other tacky resort. My home has gone from a one bed apartment where I slept with my soon to be wife (now ex) and our baby at the end of the bed to a swanky appartment in the city with my girlfriend and I am building my dream 4 bed home and a nice piece of land with all mod cons mostly funded by my credit limit.

I could go on but my point is you have to live life for the moment not for planning hording funds (pension, property, shares, hedge fund etc etc) for any number of senarios that may or may not happen and sit on cash that could dissapear with any number of events like a bank crash or bad exchange rate and so on.

Live life and enjouy it! You only get one shot at living so make the most of it! If the worst happens so be it but be possitive and you will continue to live.

Take care everyone, I wish you all the best during this tough period but IMO its mostly media hype that it causing this downturn and causing mostly needless worry!

I've exactly the same outgoings as you except i've a couple of "investment" properties too.. Problem is i only earn25k a year and cant really afford it!!

 

[foghorn]

For holidays, in 1990 I used to camp for two weeks in the summer in west Cork or Kerry and I now visit Dubai or the Caribbean for 10 days every February as well as decent holiday in the summer in a nice location so no Malaga, Majorca or other tacky resort.

I can think of nowhere tackier than Dubai; the only difference is, people who go there think it's classy.