| Most people have this plan in life - they work for | | | | the mortgage as quickly as we can, so when we |
| a large (secure?) organisation, for 40 years or | | | | retire, we can live rent-free in our own property. |
| more, and then they feel that the organisation will | | | | That is what we are taught to do in school, by |
| repay their loyalty by providing them with quite a | | | | our parents, by society in general. |
| sizable top-up to their State pensions. Most people | | | | Very commendable - but what about our |
| have this plan in life - they work for a large | | | | standard of living on retirement? Or our choice of |
| (secure?) organisation, for 40 years or more, and | | | | care homes when the inevitable happens? We |
| then they feel that the organisation will repay | | | | may have a nice house to live in, but if all of a |
| their loyalty by providing them with quite a sizable | | | | sudden, we are only getting a fraction of our |
| top-up to their State pensions. | | | | usual income, due to retirement or long term |
| How wrong can they be?Look at the chaos | | | | illness, what happens to the nice car, the good |
| caused over the last few years on both sides of | | | | holidays, the freedom to go and see all the family |
| the Atlantic where companies have either illegally | | | | when we want to?Over the lifetime of the |
| or by bankruptcy robbed hundreds of thousands | | | | mortgage the average property - wherever it is |
| of hard-working, loyal employees, their right to a | | | | situated, has been increasing in value by around |
| comfortable retirement - Murdock and Equitable | | | | 8% every year. With the average price of a |
| Life in the UK; Enron, IBM and now Delphi in the | | | | house in the UK now at £150,000, that |
| States are just the tip of the iceberg. (Will GM be | | | | represents a growth of around £12,000 |
| next...?)Then there is another highly relevant issue | | | | every year. After 10 years, that will amount to |
| - that of long term care. In the UK particularly, | | | | some £120,000 (about $205,000 to our US |
| human rights for older people remains a very | | | | cousins), so you could have at your disposal a lot |
| uncertain area, and unless you have money or | | | | of this money by refinancing your house. |
| very vociferous friends and relatives, you could | | | | With the average deposit needed to buy another |
| become victim of bureaucratic activities. As | | | | house as an investment in the UK being around |
| reported in the Telegraph Money section in | | | | 15%, and the average UK home costing |
| February this year, a couple who had lived | | | | £150,000, another house would require you |
| together since the beginning of the Second World | | | | to raise around £22,500 deposit, so in |
| War ( 65 years of togetherness) found that | | | | theory, you could go out and buy and 5 more |
| when the husband had to go into a care home, | | | | houses using the equity in your existing house, |
| his wife was refused permission to move in with | | | | and each house growing in equity by 8% |
| him. Enforced divorce by the Welfare state? | | | | (£12,000 each per year), you would see |
| Luckily the couple's family rallied to their rescue, | | | | your net worth grow by around £60,000 |
| and Gloucester County Council relented and the | | | | every year!That's all good and dandy, but now |
| couple are now reunited. | | | | you have 5 extra mortgages of around |
| What is the common theme in this reassurance | | | | £127,000 each, each one costing around |
| that control of our twilight years will not be taken | | | | £550 a month to service. This is what most |
| out of our hands by some faceless | | | | people find is still the most daunting, and even |
| bureaucrat?Financial insecurity of course. | | | | terrifying prospect, of investing in property. |
| In an attempt to overcome this uncertainty, | | | | However, there are organisations around who |
| many people are turning back to one of the | | | | specialise in locating property both in the UK and in |
| bedrocks of financial security - property. | | | | places such as Spain where properties can be |
| But to many 'average' people, the thought of | | | | brought for very low amounts of money down, |
| investing in property is seen as a privilege that | | | | and for the uninitiated, full rental guarantees for |
| only the very rich - and therefore those totally | | | | up to 10 years can be provided in some cases. |
| unaffected by the pension crisis - can afford to | | | | OK, there the trade off is that there would be |
| indulge in. | | | | little or no rental income, but the mortgage would |
| However, many of these folk are already into | | | | be paid with no worries, and the capital growth |
| property investment, and don't yet realise it. One | | | | after 5, 10, or more years would provide a very |
| thing most of us are brought up to believe is that | | | | tidy capital nest egg indeed. |
| we should, as soon as we are able, get a foot on | | | | But - and there is always a 'But' - where there is |
| the property ladder and buy our own house. But | | | | money to be made, sharks tend to circle, and |
| then it all goes a bit pear-shaped.... | | | | before anybody rushes out and starts to buy low |
| Most of us live in this house we have bought, | | | | money down property, they should seek sound |
| usually with a really low cost, long term mortgage, | | | | financial advice from an independent financial |
| and we then have this urgent desire to pay off | | | | advisor. |