British Author – “I’ve owned my current house, a six-bedroom detached property, for 25 years. I paid £47,000 and it’s now worth around £750,000. Buying property has always been my best form of investment.”

HOW DO YOU FEEL ABOUT PENSIONS?
“I wouldn’t recommend anyone take out a pension; much better to invest in bricks and mortar.”
SO PROPERTY IS YOUR MAIN METHOD OF INVESTING?
“Yes. I’ve owned my current house, a six-bedroom detached property, for 25 years. I paid £47,000 and it’s now worth around £750,000. Buying property has always been my best form of investment. After doing them up, often a member of my family would take them on or I’d sell for a good profit and reinvest in a new place.”
HAVE YOU EVER INVESTED IN SHARES?
“Yes, but I’ve got rid of them all and wouldn’t buy again. Years ago, I knew there would be a financial crash. People who didn’t have money were being lent loads, getting 100pc mortgages with no real hope of paying anything back; it was a ticking time bomb. That’s when I decided to get rid of all my investments – mostly shares – and turn them into cash before investing in property.”
– from ‘Adrian Mole author Sue Townsend talks money’, Richard Webber, The Telegraph, 1 Jul 2012

The global bubble in RE will only be over when people have been taught to doubt recently ingrained ‘truisms’ about ‘bricks and mortar’.
– vreaa

21 responses to “British Author – “I’ve owned my current house, a six-bedroom detached property, for 25 years. I paid £47,000 and it’s now worth around £750,000. Buying property has always been my best form of investment.”

  1. “Yes, but I’ve got rid of them all and wouldn’t buy again. Years ago, I knew there would be a financial crash. People who didn’t have money were being lent loads, getting 100pc mortgages with no real hope of paying anything back; it was a ticking time bomb. That’s when I decided to get rid of all my investments – mostly shares – and turn them into cash before investing in property.”

    This quate was odd, she knows people cant afford the homes they buy, but is now going to ALL her money invest in RE?

  2. Well, I can’t recommend her approach to investing. Her book “Queen Camilla” is hilarious! I recommend you read it.

  3. “Years ago, I knew there would be a financial crash.”

    Oh really. In that case she left significant monies on the table not shorting the market. Kyle Bass scoffs!

  4. A nice bit of history with famous British author and Vancouver real estate here: http://www.chuckdavis.ca/archives_kipling.htm

  5. Over 25 years this investment returned a rate of just under 12%. The S&P during the same period averaged just about 1% less than that. So even a small down turn in the real estate market means that this in fact was not the “best” investment.

  6. Nothing can be further then the truth when you READ this about HOUSING COSTS:
    Reporting From: Porto, Portugal

    It’s been said that the definition of insanity is to do the same thing over and over again but to expect a different result. On that basis, the western world’s economic policymakers are clearly certifiable.

    They cut rates. It does nothing. So they cut rates again. And again.

    They in debt future generations to ‘stimulate’ the economy. It does nothing. So they stimulate again. And again.

    Nothing that central banksters or politicians have done since the 2008 global financial crisis has fundamentally changed economic conditions. Yet they keep applying the same remedies, drawn from the same old Keynesian playbook.

    The false premise which guides their decisions is that we can all grow wealthy by borrowing and consuming, instead of by producing and saving. People have been sold this lie for more than a generation. It is embedded in social DNA.

    In the current western economic system, you are rewarded for going into debt with all sorts of tax deductions. Save money, on the other hand, and you are punished through taxation and inflation.

    The incentives are all wrong; it’s no wonder that people have over-borrowed and overspent given that the system is so blatantly slanted to promote such behavior.

    Housing is one of the most interesting examples of bad incentives: tax policy in many countries encourages people to take out debilitating mortgages, and governments end up with a moral imperative to ensure home prices continue rising.

    This strikes me as truly bizarre. You’d think people would want housing costs to stay low and affordable, not rise.

    Nobody cheers when the price of healthcare goes up, even though they could just as easily profit by investing in any number of insurance companies.

    I don’t click my heels when the price of food goes up in the grocery store, even though we’ve been paid handsome sums from the bountiful harvests of our farm in central Chile.

    And let’s not forget how much turmoil ensues when gasoline prices get too high. Why should housing be any different?

    For the vast majority of people, a house isn’t wealth. It’s an expense. And wishing for this expense to increase is both foolish and destructive.

    Yet most politicians and central banksters in the west are frantically fanning the flames of broken housing markets, desperately trying to re-inflate prices.

    Here in Portugal, for example, housing prices have fallen dramatically. Housing has become affordable. Cheap, even. This is a good thing.

    Yet the bureaucrats keep trying to figure out ways to ‘prop up the housing market’ and distort prices, often through policy that is very unfriendly to homeowners.

    In the United States, the Federal Reserve keeps ratcheting down long-term interest rates and scooping up mortgage bonds in an attempt to re-inflate home prices.

    With so many Nobel Prize-winning economists backing these kinds of policies, it’s clear that the people in charge haven’t even begun to acknowledge the flaws in their intellectual framework.

    And if you can’t even admit that you have a problem, then you are light years away from solving it.
    Until tomorrow,
    Simon Black
    Senior Editor, SovereignMan.com

  7. Craig Sterling

    Since VREAA has gone international today, I thought I’d offer an international (Chinese) anecdote. Those of a nervous disposition look away now…

    I work in biotech and drug development. This morning I had a meeting with a Chinese manufacturer of generic (low-value) drugs. He told me they had been used to making US$200m/year NET profit from operations. This year they expect to make a US$20m loss. He’s not that worried, because his is the third largest firm in China. But he expects lots of smaller players to go to the wall. And he said the Chinese focus on short-term profit, without investment in plant and R&D, was coming home to roost – NOW. Not next year or in two years’ time.

    Anyone think there might be an effect on HAM from this?

    • “Anyone think there might be an effect on HAM from this?”

      Yes. But it’s not clear to me the story of this particular manufacturer involves anything illicit, at least nothing obvious. Not that it’s relevant.

      My view is that China’s in an unsustainable investment boom and is unlikely to right itself without a prolonged period of lower GDP growth. When times get tough on the home front, businesses tend to focus on their core businesses, almost invariably closer in geography to their central operations. It can also mean emigration drops as leveraged bets force individuals and companies to bail water instead of accumulate wealth.

      Listen to some of the older cohort talk about what Japan went through in the late 1980s and early 1990s. Firms bought investments in all reaches of the world, attempting to deploy its current account into growing Japan’s economy. When TSHTF the priority was to liquidate and repatriate foreign investments, even at significant losses, and it was evident quickly they had little knowledge of the jurisdictions in which they bought.

      Lest we forget:
      – Gung Ho
      – Die Hard’s Nakatomi Tower
      – Rising Sun

      The awe inspiring wealth of Japan in the 1980s permeated the news media as well as popular film. There was a real worry at the time that Japan would overtake America in its economic influence and America would be unable to adapt. Now, after 20 years of malaise, popular references of such events are more banal. Now the smoke and mirrors has moved over the PRC.

      • 100% agree Jesse. And what backs your view up is that I work with Chinese people and study for my MBA with them – and they all (the smart ones) say the same thing; “When you get outside Beijing, S/hai and Yellow River Basin, my country is medieval”, “there’s going to be a lot of problems in China in the next few years” etc etc – one guy even told me outright that Chinese businessmen are focused on one thing and one thing only – short-term, cash-based returns…

  8. Craig Sterling

    sorry should have added that they are going to make a loss because of increasing competition and decreased demand globally. And that he expects his firm (like the rest) to dump lots of product at low price on to the international markets – ie deflation – just to stay alive…

  9. Susan Lillian Townsend (1946-04-02) 2 April 1946
    age 66
    http://www.astro.com/astro-databank/Townsend,_Sue

    • With respect Paul, let’s please stick to RE talk…
      Every time you link an astrology site, I feel the need to post a comment stating that I don’t subscribe to astrology.

      • Yet feng shui seems to be in the news from time to time, indicating how certain ethnic groups take astrology rather seriously.

      • Punish me if you must, IllustriousEd… But did you know that at least one scholar has traced the origins of the contemporary Real Estate Brokerage to the medieval practice of Necromancy?

        “This is particularly the case with the most reviled form of magical practice, necromancy, which involved the conjuring, binding, and deploying of demons.”

        Forbidden Rites: A Necromancer’s Manual of the Fifteenth Century

        http://tinyurl.com/bwdbjbw

      • Let’s be careful to differentiate:
        1. Local articles about, or popular examples of, use of astrology, feng shui, or necromancy being used in connection with RE will be headlined
        (partly in the spirit of ‘RE references in local culture’).
        But
        2. Discussion asserting their validity will not be encouraged.
        (That can be saved for the astrology, feng shui, or necromancy boards.)

      • I must say, vreaa, that although I have no problem with your disavowal, I enjoy the peculiar bedfellows this bubble has made and personally don’t mind. And yea, lion shall lie with lamb, fresh with saltwater, conservative with socialist, and rationalist with astrologer. I don’t see his comments as being endorsed by you and think in a skeptical forum we’re not in danger of being lead off a cliff…

      • (Not that I have any need to discuss astrology. Just that it doesn’t put me off the way trolling or insults would. )

  10. No asset class is bad; is just a matter of price (of entry). Having said that cult of real estate is particularly prevalent, perhaps because wives buy into the idea (unlike bonds and stocks).

  11. Why is an author giving investment advice? Is she in any way trained or licensed to do so?

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