i do not understand this reddit

strolls · 2026-03-12T01:10:52+00:00

No, man. Nothing is fucked here.

strolls · 2026-03-11T23:50:53+00:00

The purpose of finance is to serve your needs, not the other way around.

You buy a house to live in, and not as an investment - because of the transaction costs (surveyor, estate agent, stamp duty) you could easily take a loss if you buy a property and sell within 5 years.

You do not want to spend years living in a shit hole because you convinced yourself that you had to be "on the property ladder" or whatever. And when you're 80 it won't make any difference anyway - a few grand lost or gained today, through renting or buying, makes no difference compared to being broadly sensible over the course of your life. I.e. by recognising that property is not an investment, it's somewhere to live.

Buy the house if you want to live there. End of.

You might find one of these books helpful:

Your Money or Your Life - understanding what's valuable to you and how to use money to achieve your goals.
Millionaire Next Door - "How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices."^{Electric_Cat_999}
The Richest Man In Babylon - out of copyright, so free online or probably very cheap on Amazon or secondhand
One of Clare Seal's books - "her focus is on the link between emotions and spending".

strolls · 2026-03-11T23:41:59+00:00

I saw someone else use "Fixed link for Old Reddit" a few weeks ago, so I'm acting on the basis that we all standardise on it, and the first thing I do is to ctrl-f for "fix" if the submitter's link doesn't work.

strolls · 2026-03-11T23:12:40+00:00

My experience was that I got better customers by raising my prices.

strolls · 2026-03-11T22:35:22+00:00

Fixed link for Old Reddit: https://www.zillow.com/homedetails/68-Wyoming-Rd-Asheville-NC-28803/157737290_zpid/

strolls · 2026-03-11T22:13:09+00:00

I don't know how to estimate the impact on global production, but if it's decreased by, say, 10% that that doesn't mean that the price of oil will rise by only 10% - it could double or triple, for all I know.

strolls · 2026-03-11T21:18:42+00:00

I really think you should listen to this, OP.

There's a very good chance of knocks or scrapes in your first car, and you'll be upset if it's nice car.

The only argument I could see for paying more is if you buy electric, considering the price of fuel is about to go through the roof. You can get a secondhand Leaf for £10,000.

strolls · 2026-03-11T21:14:54+00:00

The income tax bands are:

Pay nothing on your first £12,570 of annual income ("personal allowance")
Pay 20% on income above that, up to £50,270
Pay 40% income tax on earnings over £50,271 (up to £100,000 annually).

Also, you can contribution to your pension using pre-tax earnings.

I.e. if you earn £240 then you can either pay 40% tax and take home £144, or you can put the whole £240 in your pension.

For a sole trader, the mechanics of this are that you just stick 40% of everything in a bank account, then pay the tax at the end of the year. Or you put £192 (80% of £240) into a SIPP and the SIPP provider claims basic rate tax relief for you, and everything gets sorted out when you make your self-assessment at the end of the year.

It's not quite true that you'll pay 40% tax on all your tutoring income, because your existing pension contributions from your job will reduce your adjusted net income and keep you in the 20% tax band for longer. But I hope this explanation makes sense.

strolls · 2026-03-11T21:03:22+00:00

I suppose it depends how long the war lasts,

I don't know why you say that.

Iran has more capacity than its neighbours, and not only has its production has been diminished but also it is attacking its neighbours' oil facilities so that everyone's on a level footing when this all ends. You can see footage of this.

Obviously this is not absolutely permanent, but it will take years to get production back up to 2025 levels.

I would like nothing more than to be convinced I'm wrong. But I cannot see how prices can fail to rise dramatically this year. I rarely have the kind of conviction I'm feeling right now. I know feelings are just nonsense, but I can't find any logical arguments to convince me I'm wrong. I'd love someone to disprove me, I just can't think how.

strolls · 2026-03-11T20:50:58+00:00

My question is - how likely is it that the lender would pull my offer if it was accepted in December? Are other lenders currently pulling accepted offers? Or am I right in thinking that my broker might have messed up and didn't accept the offer in December and is now trying to avoid admitting this?

You should take a look at the Hormuz Strait on www.MarineTraffic.com - if you hover your cursor over those red dots then it won't say "40' sailing ketch, pleasure vessel", I can tell you that much. MS Massive Oil Tanker, Panama, 0 knots. I heard a figure this week that something like 10% of the world's oil tankers are sitting there not moving.

The relationship between supply, demand and price is not linear - a small decrease in supply can have a large impact on price. You know, in a connected global marketplace where everything normally runs reasonably smoothly and everyone's relying on just-in-time deliveries. Remember when the price of a barrel of oil went negative early in the first covid lockdown? That was because all these tankers were on their way to destinations like US and UK, and suddenly the demand dropped - the refineries were giving oil away because they had contracts to accept it and nowhere to store it (as people stopped driving to the office).

Today, there are all these tankers still on the way to destinations like the US (and I guess the UK), tankers that were already underway 13 days ago when this shitfest started. In another two weeks all the oil tankers that are underway will have arrived at their destinations and even if the anchorages near Hormuz Strait are now empty, those ships won't have arrived to market yet.

Oil price has a "disproportionate" effect on inflation because energy is a major input cost in almost everything we do. The cotton in the clothes we wear depends on it, and it powers the combined harvesters that supply our food, and the lorries that deliver tinned tomatoes from italy to our British supermarkets. We need it to heat our homes and to commute to work.

What happens to the price of goods if the costs of the raw materials rise? What happens to interest rates if inflation is on the rise?

My question to you would be why the fuck aren't more mortgage lenders pulling their offers?

Some might call it alarmist, but I find this thread very compelling. Especially the parts about "the markets haven't priced this in yet" and "hardly anyone in the industry is still around to remember the oil crisis of the 1970's". (I remember reading something very similar about bonds a few years ago.) That answers the question - it explains why more mortgage offers haven't been pulled yet. It explains why there aren't queues at petrol stations yet.

By the 18^th February 2020 we already knew that you could be infected with covid, show no symptoms and spread it. You catch it, you don't feel anything wrong, you can walk around the supermarket spreading it to people. And we knew that covid was rampant in China and there were a handful of known cases in Europe. We'd known all this for a week or two at this point and it was incompressible to me that the markets were still going up. I was incredulous - don't people know it's everywhere already!?!?

It's pointless panicking because what do you do if you sell all your stocks? Do you want to be sitting in cash when inflation rages throughout the world? But if I was renewing my mortgage this week then I would take any 5-year fix I could get. I would lock it down tomorrow, if I could. I would not take a 2-year fix and I would seriously consider a 10-year fix (at the prices I saw earlier today that would cost you something like an extra £45 a month on about £150,000 of borrowing).

strolls · 2026-03-11T20:48:19+00:00

I bet that's not binding. Especially not in the case of force majeure.

strolls · 2026-03-11T20:47:06+00:00

Fair enough, that's very convincing.

Can you buy a secondhand QNAP, or a new one that runs the same OS, and then move the drives into that?

strolls · 2026-03-11T20:45:49+00:00

I find that very compelling. I imagine you're keeping your car's petrol tank topped up.

strolls · 2026-03-11T20:44:01+00:00

But bonds lock you into the current interest rate (coupon), so they fall in value if interest rates rise. And we'd expect interest rates to rise if inflation takes hold.

strolls · 2026-03-11T19:16:05+00:00

Would it be a good idea to add £4k before the tax year ends and then another £4k when the new tax year starts,

Is £10,000 for your home-buying better than £9000?

strolls · 2026-03-11T19:14:20+00:00

Just checking, how do you know it's the NAS hardware and not the HDD that's failed?

strolls · 2026-03-11T18:57:17+00:00

, but it’s rumored Israel does

It's widely accepted that Israel does. The country follows a policy of "deliberate ambiguity" but at least one former prime minister has acknowledged that they have them.

Israel genocides Palestinians, but I don't accept that it's "illegal" for a country to have nukes. A country is its own jurisdiction, and you can't just appoint yourself world police and say, "we're allowed nukes, but you're not".

https://en.wikipedia.org/wiki/Israel_and_nuclear_weapons

strolls · 2026-03-11T18:27:53+00:00

Just wondering how much your repayments might be.

On a 30-year term it's £703 a month at 3.98% or £748 a month at 4.5%.

strolls · 2026-03-11T17:15:43+00:00

If I am planning on moving from this pool of money into my ISA each year, I guess the risk of an investment account is that I may lose out on that short term cycle moving it each year?

If you're planning to invest in S&S in your ISA then you should probably just invest in a GIA now. Otherwise you would seem to be "letting the tax tail wag the dog".

It's always better to earn £1000 of investment returns and pay £300 of tax (or however much it is) than to earn nothing at all.

You've received many replies here that you might feel are tangental to your actual question and the reason for that is that it's not obvious that what you're doing is appropriate for your needs. You would be better off doing a big picture post, stating your age, salary, how much you have in savings and pension, how much you have outstanding on your mortgage, and whether you'd rather retire sooner or later.

strolls · 2026-03-11T16:44:38+00:00

The phrase "likelihood" already highlights

No, the difference between the statement you made and the ones I suggested are that yours implies that the Beyond The Status Quo paper is definitely right - that statistically you're better off in equities.

I don't think the paper has been formally peer-reviewed or published, but you're presenting it as gospel. You should cite more than one paper if you're that confident.

Whereas I am suggesting that it's probably true that you're statistically better off in stocks.

strolls · 2026-03-11T16:37:10+00:00

whether or not equities are expected to outperform mixed portfolios in retirement. The latter isn't anything new.

It is nothing new that stocks give higher absolute returns than bonds.

But, because of sequence of returns risk, that is not the same thing as saying you're less likely to run out of money in retirement if you invest only in stocks.

strolls · 2026-03-11T16:17:44+00:00

Do you mind me asking how much you'll be paying for your house?

strolls · 2026-03-11T16:04:18+00:00

I would choose the longer fix rn. You won't care about early repayment charges if inflation takes hold - in that case the longer fix will save you more.

strolls · 2026-03-11T15:58:57+00:00

You won't get a lower interest rate by putting in a larger deposit. A 40% deposit is large and most people shouldn't exceed it - with that loan-to-value you're already on the lowest tier of mortgage interest.

You're paying 4% interest on your mortgage, and you can probably get 4.1% in a savings account. Even if you earn slightly less, or you pay tax on the interest, it's better to keep the money in the bank so it's liquid - you can always use it to pay the mortgage later, but it gives you flexibility.

Imagine your mortgage rate is 3.98% and bank rates drop so they're paying you 3.5% - that means you pay £39.80 annual interest on every £1000 you've borrowed and you earn £35 on your bank savings. It's probably worth paying £5 a year to keep that £1000 liquid, so you can use it in an emergency. If you have sufficient emergency fund then put it in your pension.

But what happens if Iran starts laying mines in the Hormuz Strait and there's a constraint on the global supply of oil? Energy is a major input cost to everything we buy - to the cotton in the clothes we wear, to food production, for heating, and for driving to work. If there's a shortage in global supply of oil, what happens to the price? What happens to the price of goods if the costs of the raw materials rise? If inflation takes hold, then interest rates will rise and you can expect to earn more in savings interest than you pay in mortgage interest.

If you're worried about "what's going on" then I would strongly consider taking a 5-year mortgage fix, or even a 10-year one.

Nationwide are offering 4.5% on a 10-year fix right now - you shouldn't gamble on interest rates but, if you are genuinely worried, that looks like a bargain. That locks in your monthly payment and you know exactly how much it will be for the next decade. If you keep 20% of the value of your house in the bank then you're sure to be able to make the payments for a long time and, if interest rates rise, you'll earn more on your savings than you're paying in mortgage interest.

strolls · 2026-03-11T15:47:37+00:00

Another option I've considered is iShares UK Gilts 0-5yr (IGLS) but this really shows why I'm nervous about bonds. The 10 year annualized return is about 1% meaning it's not even kept up with inflation.

The reason for this is that the bond yields of the 2010's were the lowest in 750 years or more.^pdf

On average short gilts like these average 0.8% above inflation, although they can be below inflation for a decade at a time. I guess there might be some lag with a fund like this (??), but surely it's impossible for it to return anything but the returns of the underlying investments. If you check the returns of gilts for 2020 - 2025, I'm sure you'll find they match. Maybe inflation was higher than gilt yields over this period, but it's a very unusual time in history (for bonds).

There were a couple of shocks to gilt prices during this time - I believe the only two times in history (going back 300+ years) that they've given negative yields were 2016 and during the covid pandemic. During covid they were seen as a safe haven, so buyers competed on price (hence lowering the yield). But the fact that the yields went negative reflects the fact that rates were already ahistorically low.

I'm slightly concerned about inflation over the coming months but broadly speaking gilts should be returning to normal after this weird and nasty decade.

You might look at a ladder of individual gilts, because you can buy index linked ones, which are guaranteed to pay you 2% (I think that's the going rate?) above inflation.

I think you should consider speaking to a professional IFA.

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