I often write on Quora.com, where I am the most viewed writer on financial matters, with over 365.1 million views in recent years.
In the answers below I focused on the following topics and issues:
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Source for all answers – Adam Fayed’s Quora page.
The graph above is shocking for many people.
It shows the average UK house price since 1845, adjusted for wages. As you can see, the graph shows it has gone down from about a house costing thirteen times income to eight.
Yet in 1908 the average house only cost about twice earnings, and only briefly in 1950, did prices look similar to what they are like today.
This is an example of recency bias. House prices have performed much better in the last hundred years than before.
There is no certainty that with potentially slower economic growth, population decline if immigration isn’t increased and slightly rising interest rates from the current lows, such trends will continue.
What is more, people don’t always compare the prices of a house to:
If they did, they would see that even in recent history, London has dragged up the UK as a whole, when prices in many parts haven’t beaten inflation or wages:
The last graph actually shows that adjusted for inflation, UK house prices hit a peak in 2007, and haven’t fully recovered in the last fifteen years.
That is often because it is hard for people to separate nominal and inflation-adjusted returns.
If your 500k house is worth 515k next year, you are 10k down, based on inflation being at 5%, which it was last year. That isn’t factoring in maintenance costs.
As a final comment, the media don’t help, as they imply that housing only goes up, with analogies like “the property ladder”.
That being said, property can be a good investment in some situations, and it has some non-financial benefits if you use it as a home.
That doesn’t mean it can only go up, even long-term. That is one reason why most professional real estate investors focus on yields and leverage.
That way, even if the price is stagnant/doesn’t increase with inflation in a bad-case scenario, you can still make decent returns.
If everybody could predict the future, then everybody would be wealthy. Not only that, everybody would get every bet right.
In reality, even the best business minds only serf the wave of one business trend.
That is enough as Mark Cuban said below:
Nevertheless, I think existing trends will become more pronounced in the years ahead.
Let me give you an example. Video is getting bigger. It has been for years and that will only continue.
Instagram is trying to compete with YouTube and TikTik with some of its offerings.
As time goes on, VR, AR, and other technologies might just make the video experience more realistic.
Likewise, we are seeing an increase in people wanting to deal with subject matter experts.
Take the YouTube video channel Dr Pimple:
She bursts cysts. For most people that sounds disgusting. Yet she has over 7.39 million subscribers!
To put that in comparison:
Ten years ago, people would have laughed if you would have suggested such a thing would be possible – that a doctor performing surgery would have more followers on YouTube than Bill Gates, channel 4 and Kevin O’Leary combined!
Yet her channel works because it is real, authentic, she is an expert and makes it entertaining.
It is 20% marketing and 80% subject matter expert, which is what many people are looking for in this day and age.
With the exception of a shout-out, it is focused on the actual procedure. As time goes on, and the internet matures further, I think subject matter experts will take more market share, compared to generalists.
The man in the picture is Peter Jones, who is one of the judges on Dragons Den, the UK’s equivalent of Shark Tank.
According to the Sunday Times Rich List, he is worth over a billion Pound Sterling.
On one of the episodes, he asked somebody pitching him a product how much money he had.
He did this to see if he was putting his own money into the project. When the contestant asked him how much money he had, he said about ten million in the bank.
Many viewers might have assumed the number would be higher, but this relative lack of liquidity is quite normal for wealthy people.
The majority of wealthy people’s money is either in businesses (private and publicly traded stocks), real estate, or other assets.
Usually, a very small amount is in cash. So, when you see rich lists and other such sensationalism, all that is just an estimate of the person’s wealth.
It says nothing about
Beyond that, one of the biggest myths about wealthy people is the idea that it is a monolithic group.
Of course, generalizations can be accurate, but to suggest the whole group is either greedy, hard-working or any other kind of stereotype is often false.
Usually, it depends more on other factors, such as the person’s personality, if they are self-made, and many other things.
Comparing a self-made multi-millionaire or billionaire, with a fourth-generation rich royal family member, is like comparing chalk and cheese.