Still Growing
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What has the UK stock market averaged over the past 30 years in increases vs what was your sister's home interest at?
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My sister bought her home in 1998 and paid it off in 2006. The FTSE100 was 4750 in 1998, it's 4300 today...
There is this myth that stocks always go up. No they don't! The 1982-2000 period was an abberation, as was the 1914-1929 period. And you only really saw returns if you invested at the start of those periods. Most people on this board probably started investing towards the end of that late 20th C bull run, and have lost out. I'm not sure we are going to see high returns again for several decades in the western world.
The other thing you have to consider is that if you have a 25 year mortgage, you pay a hell of a lot of interest over that time. Crude rule of thumb is that you pay roughly three times your purchase price once you've paid interest
and repaid your capital - that is, if you purchase a home for £100,000, you end up forking out £300,000 over the 25 years before you have paid the debt. That's around £200,000 in interest, which is a small fortune. Much better to pay off the debt asap.
As I said, once you have your shelter all paid for, you can afford to take risks and not bat an eyelid if you make a few losses here and there (some losses are inevitable when you take risks). But you do need to secure basics first. Think of all those people losing their homes and moving into trailers - it's not pretty when you lose your shelter.
My sister is only in her mid thirties - it was a lot of hard work paying off the debt so fast, she was shopping at Aldi, while others were living it up eating out every night. But she now has her whole life ahead, with good earnings, and shelter all paid for, and she can enjoy herself, work part-time, afford to have children, etc etc.
More important than anything is the sense of peace of mind - it's hard to describe how well you sleep when you have no debt and your home paid for, and are therefore pretty much invulnerable to the vagaries of the economy. It's a priceless feeling, worth more than the actual wealth you accrue by paying off debt.