What are your repayment plans?

Reply to the comment left by "Vanessa Warwick" at "07/12/2013 - 10:43":

Oh dear, oh dear, oh dear Vanessa!

The debt snowball method of reducing debt is fine when you apply it to the highest interest rate paid, but only assuming you can't get a better return on your investable surplus income elsewhere.

3% return on money invested is always going to be more effective than paying off a debt costing 1.5% because your surplus investable income will build a fund to clear debt much quicker if it is growing by 3% per annum than the surplus investable income will reduce a loan costing 1.5% per annum.

You have mentioned tax. Yes you may pay tax on your 3% interest on savings but that depends where your money is saved, you won't pay any tax if it is saved in an ISA for example. However, you will ALWAYS lose the tax relief on the 1.5% interest you will no longer be paying on your BTL mortgage debt which gets paid off.

John Correy's explanation of the debt snowball method is a good one, especially for people riddled with expensive consumer debt. However, you have obviously misunderstood the most important issues which I have outlined above. This is actually quite disturbing given the influence you carry in the PRS.

My own strategy regarding debt repayment can be read here >>> http://www.property118.com/landlords-buy-to-let-property-investment-strategy/interest-only-vs-repayment-mortgages/
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Hi Mark,

Please pull your neck in Mark with such personal comments.

The allowance for an ISA is £11,520 for tax free cash. Hardly a large sum of money to protect you when interest rates rise. Just ask the many people on your WB thread how long that sum of money will save them from the interest rate rises! It will run out very quickly.

Not to mention to effects of inflation on savings.

The point of a forum is robust debate, not to belittle people and insult their input, which I have noticed you doing more of lately.

You should know better.

For some people, they might want to pay down their mortgage instead of paying into a savings account at 3%. That is their right. Let them know about the options open to them.

Indeed, it might be their ONLY way of reaching the end of their mortgage term and end up with something worth having after years of investment property ownership.

You write from a position of significant wealth and assets. Other people are not so fortunate and everyone has different circumstances so it can never be a case of "one size fits all" or "my way or you are a numpty".

Thanks for the title of "influencer". However, I am not and I don't appreciate it from you. I am a "contributor" to open and robust debate and interested in learning. I will happily admit if I am wrong as well. But in this case, I stand by what I said.

May I respectfully suggest that you start thinking the same way unless of course, you think that owning a forum and having an opinion makes YOU an "influencer"? If so, I would find THAT very disturbing.

Reply to the comment left by "Vanessa Warwick" at "07/12/2013 - 12:19":

Even is the saver paid 50% tax on saving at a 3% interest rate that would still equate to 1.5% net. Given that we are discussing paying down a mortgage at 1.5% interest rate which attracts tax relief at a similar rate (i.e. 50% in this example) then it remain 100% more effective to save the funds as opposed to repaying debt on a purely financial basis.

Factor in real life scenarios such as the potential requirement to access cash quickly and without incurring fees or higher interest rates on new borrowings and the alternative method of saving vs paying down debt (for the scenario being discussed) becomes even more compelling.

Therefore, I continue to disagree with the points you are making in respect of the viability of the financial structure you have referred to.

I fully appreciate that people can and will do what they consider to be right for them. This debate is a useful one as it affords people an opportunity to fully understand the choices they are making and helps them make the right choices. However, I cannot think of any set of circumstances where it would be considered good advice for a person to pay down debt costing 1.5% when savings returning 3% is also achievable.

I am sorry that you feel my response was personal, I wasn't intended to be. I was, however, angry because your comments will lead some people to make bad decisions affected their finances.

In all cases like this, I obviously recommend people to take professional advice which is backed with professional indemnity insurance in the event of being bad advice. Whilst I am fully qualified to provide advice I am now retired and hence no longer insured to provide it. Therefore, my comments should be treated as guidance only and not relied upon as professional advice.
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My comments are just an opinion. Nothing more.

Being angry is one thing. Making personal insults and belittling someone is another.

I told my own Mum to undertake her own due diligence on information I gave her.

I am not personally responsible for anyone's decisions based on FREE opinions shared on any forum, and its a bit silly to suggest that I am.

When people have PAID for advice, then they can get angry if they perceived it to be wrong.

I've always advised due diligence, and will continue to do so ... and that includes due diligence on anything I say as everyone must take ownership and responsibility for their investment choices. After all, its their money.

"Good advice offering requires knowing a person very, very well. So well, in fact, that you may know more about them than they know about themselves in certain situations. Then, good advice is loving and given out of love. It is never to control or manipulate. Then, it is giving information; just giving, not enforcing, information. And lastly and most importantly, after advice is given, the outcome is let go of completely, trusting that the other person will take it, leave it, or ponder it". ~ Ann Wilson Schaef

Reply to the comment left by "Vanessa Warwick" at "07/12/2013 - 13:13":

Interesting quote Vanessa but when it comes to taking financial advice I think advice from a qualified and highly experienced professional with the backing of good professional indemnity insurance is far more reassuring that taking advice from a well meaning friend or relative.

It wasn't the intention of your advice that made me angry, it was that you are a well respected influencer whether you choose to believe that or not and on this occasion you well intentioned advice was wrong. I can't think how to sugar coat that so I'm just saying it as it is.
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It was wrong ... but only in your opinion.

So allow people to be the judge ... in their opinion. Let them ponder and work it out for themselves. Unless you think your opinion is the only one that matters?!

Without conflicting opinions there can be no robust debate. Without robust debate, no one can learn.

See how I sugar-coated that?

sorry Vanessa but Mark is 100% correct.

No need to apologise Paul.

Hopefully people have learned something from this discussion, so it has served its purpose.

However, the personal insults remain unacceptable.

Reply to the comment left by "Vanessa Warwick" at "07/12/2013 - 13:58":

Mathematics are a matter of science not opinion Vanessa in that there can only be one correct answer.

I am sorry that you were offended by the manner in which I corrected you.
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Okay Mark, I see little point now in continuing with this. You were right all along and that gave you the right to belittle me, which you just did in your last post again.

Congratulations on being right Mark!