From: "Nebulous" 
Newsgroups: uk.finance
Subject: Re: Property rental paid for by interest on savings
Date: Sat, 15 May 2004 09:48:27 +0100


"Dave Dixson"  wrote in message
news:76c0e2e9.0405140437.41ec5554@posting.google.com...
> Hi,
>
> We are moving to a different part of the country in a couple of
> months, as I ditch my high paid IT job for a job in teaching (seems
> like a good idea at the moment - hope I feel the same way in a years
> time!).
>
> Anyway, we have almost sold our house and are looking at making about
> £180,000 equity, which we were hoping to sink into a new house without
> the need for a mortgage (teachers dont get paid much!).
>
> We are having trouble finding a house, and time is starting to run
> out.  Looking at building society interest rates, it looks like I
> would get over £500 a month if I put this cash into a savings account
> (sound about right?), which would allow us to rent a house while we
> continue looking and not have to dig into savings.
>
> Apart from the fact that we will be out of the housing market for a
> while, and so at risk of being priced out of the market, does anyone
> see any problems with this idea.  It seems too good to be true to me,
> but then I suppose I have never had very much cash in my savings
> account, and so I am not used to making much cash from my interest.
>
> Cheers,
>
> Dave.

One thing to be careful of if you have cash is spending it! With 180k in the
bank a new car is going to look very attractive. Its very easy to spend a
bit extra on meals out, a weekend away- stick it in the credit card. The
bill comes in, you pay it off and suddenly you dont have 180k any more.

What I'm saying is that having money makes many people feel more able to
spend and you need to be very disciplined to prevent it.

Neb