Pro's and Con's of Shared ownership

[bottle]

Any account paying 6%

 

1. £6360

 

2. £6741.60

 

3. £7146.09

 

4. £7574.86

 

5. £8029.35

 

6. £8511.11

 

7. £9021.78

 

Actual interest £3021.78

 

Of course this is where the money is not touched for the period and before tax

 

Look for tax free savings (ISA) top rates at the moment are above 6%

 

Will wait for Anhar (Steve) to confirm or blow me out of the water

[mayalld]

Please tell me where I can get £2500 interest on £6000 in 7 years, and I'll move all my money there immediately.

 

£6,000 will earn interest of £2,499.05if invested at a net AER of 5.1% for 7 years, assuming that interest is re-invested.

 

It isn't impossible to get 5.1% on a number of savings products, particularly if you comit to no withdrawls.

[bottle]

Two sites that may be of interest (sorry)

 

Money facts

 

Money saving expert

[anhar]

Any account paying 6%

 

1. £6360

 

2. £6741.60

 

3. £7146.09

 

4. £7574.86

 

5. £8029.35

 

6. £8511.11

 

7. £9021.78

 

Actual interest £3021.78

 

Of course this is where the money is not touched for the period and before tax

 

Look for tax free savings (ISA) top rates at the moment are above 6%

 

Will wait for Anhar (Steve) to confirm or blow me out of the water

My guns are silent Keith because your calculations are correct.

 

However the assumptions may not necessarily be so because as you say this is before tax, assumes the interest is compounded and that the rate is maintained throughout. In practice you couldn't have obtained 6% pre tax for the last six years, rates were quite a bit lower previously and moreover most sources would have deducted tax at 20% of the interest. If you are a 40% taxpayer you would have to pay 40% tax on it. Cash ISAs are one place where interest is tax free for example.

 

But the principle as I said earlier is correct. That in a purely financial comparison of hiring vs sharing, the interest on the purchase price of the share over the period of ownership must be brought in. But then again I could argue that interest is lost by hirers on the cash difference between the hire cost each year and the lower maintenance charges of sharing. To do the whole thing properly would require an accounting exercise known as discounted cash flow, where all the monies being paid under each scheme each year are subject to a given interest rate. Adding them both up reveals the true total cost including interest on all the money spent or tied up in either.

 

However I am insufficiently anal to do all that and in any case as I've said, I don't think that cost alone is the real comparison. Much more important is the comparison of freedoms.

 

regards

Steve

[bottle]

Steve

 

Absolutely agree with all that you said (who am I to argue )

 

 

As you mention, ISAs are the way to go for safe tax free savings, every one should put their first £3,000 of savings into them every year.

 

There is an argument that if you are not a tax payer then it is not necessarily the best option but not many of us are non tax payers.

 

I am sure/know there are some people that cannot save £3,000 but still there savings should start there.

[Billw]

I think that it's a case of "horses for courses".

 

If you live near your boat it must be very nice to have it available at any time. If you have plenty of leisure time this is also the case.

 

In my case I live at least four hours drive from the main canal network, and have very limited time away from work. For the cost of one weeks hiring I will use at least four weeks a year on a boat that is cared for and I know is well maintained. Being a private group, the object is to maximise enjoyment of the boat, meaning that short breaks are possible, and handovers can be arranged between members away from base to enable varied trips.

 

For this "horse" shared ownership in a self managed group is at present ideal. Retirement will probably mean owning a boat outright is better.

 

Each to their own I say.

Edited June 13, 2007 by Billw

[kawaton]

In response to other posts...

 

i would rather hire, and spend loads of $$$$ than have a cruiser. Not practical for dogs, and i dont like em' as much as NB's. my choice!! nothing against them.

 

If i had the cash and time, of course buying a boat is preferable to sharing, because you get the freedom.

But, i dont have the cash, or time, so sharing IS preferable to hiring....

 

but thats my story, as per above, everyone is different...