Don’t Fear the Reaper

I received a circular from Standard Life this morning in the email, offering advice on “How to pass on your pension to your loved ones”. This, I thought, was  a bit previous as I have no intention of dying anytime soon, although I grudgingly admit that at some point it may have to happen. Like Woody Allen, however, I don’t intend to be there when it does. 

One of the main tips in the article was to remember to regularly review your will. My wife and I made our first will about twenty five years ago when we took out a new mortgage. I think, at the time, that we giggled our way through it at the strangeness of it all, laughing in  the distant face of our assumed unlikely deaths. Oh to be young again. When we recently updated it, we weren’t quite so jocular and it seemed quite a serious exercise, simultaneously quite simple and complex as you work through various scenarios. These brought up the question of also making a Power of Attorney, which we resolved to do (and still haven’t.)

Another document we were handed to complete prepared you for things that you might like to happen upon your death – including such things as what music you’d like played at your funeral – in a Statement of Wishes. Filling that out is also still on the “To Do” list. It’s one of these things that you know you should focus some attention on but somehow find yourself not getting round to it. 

I also admit that I have very little knowledge on the financial side of the death equation. I’m aware of very general points of inheritance tax – such as that it exists – but have not looked in any detail whatsoever at the subject. I’m probably telling myself that I’ve got years, nay decades, to look into all of that. Another general thing I tend to think of is the scenario that I’ll go first, leave everything to my wife, and then she can sort it all out. (That actually happened to a friend who had his own business, with disastrous results.) 

I am aware of the importance of “putting your affairs in order” on a hypothetical basis at least, as I bet many of us are. Actually “putting our affairs in order”l takes a bit of work and might not seem the most appealing thing to do, but at some point will need to be done. It also seems obvious that this should happen while you’re still in sound mind to do it. It surprised me, when I sat down to review the contents of our first will, that we immediately wanted to change a few things in it. I had kind of assumed we’d just be rubber stamping things that we’d previously requested, but it didn’t turn out that way. There were no drastic changes, but the exercise caused us to think things through that, decades ago, had seemed straightforward. Bottom line was that over the years your circumstances change, but so do your attitudes toward them. 

In the end it’s the reality of the Grim Reaper that stands behind many of the decisions that we make today. For starters, at what point do you end your spreadsheet modelling for retirement? Does it just kind of fade away as you approach your nineties? Or have you had a stab at filling out one of those on-line calculators that give you an actuarial Estimated Departure Time? For me, it’s one of the big unanswerable questions that frustrates when trying to work out your pension plans – how long do you need your funds to last? Should you spend more in your Sixties than you plan to in your Eighties? The answer to that would seem an obvious “Yes”, leading to the next question of “How much more”?  It’s all very well planning to “Die With Zero” only to find that you actually have to “Live With Zero” because you got some assumptions wrong. (I’m sure that book tackled this issue and gave you some strategies for it. But, as I’ve mentioned, hypothesising is easy.)

And so, at last, I’ve managed to write a blog entry about Death! Only Sex to go, and I will have finally delivered on the promise of my title.

Stranded at the Drive In

I opened The Times yesterday morning to this photo and my heart fell. Was one of this timeless couple gone? Alas, it was true. Oh Sandy baby, some day, when high-igh school is done. Olivia was up there with Felicity Kendal in the nineteen eighties as the girl all the boys wanted. Well, us good, somewhat innocent boys anyway. It takes a few years under your belt before you start to suspect that you’d maybe prefer some time with Rizzo. Olivia was such a great choice for Sandy, but I can’t say the same for that goon Travolta. I thought, and still think, he was totally gormless in the role, and was so lucky that she was so perfect in hers that, as a couple, they worked. I have to wonder if Grease would be in my Top Ten films of All Time? It could be and maybe it should be, with its portrayal of the All American High School Dream, unrivalled until Marty McFly appeared at the Enchantment Under the Sea Dance in Back to the Future. Due to these movies, ask anyone in my generation which years and where we’d like to have lived through and many of us would probably say “Nineteen Fifties America”. 

What’s that got to do with Early Retirement, I don’t hear you ask? Well, not much really, I suppose, although I could try and hack out a link along the lines of “If I’d invested £100 a month in the year that Grease was released in a Global Index Fund, that sum would now total £112,000.” (That’s a guess, I haven’t done the maths.) 

Films can have such a big influence on us though. I think of portrayals of capitalism such as “Wall Street”, “It’s a Wonderful Life” and “Local Hero” and wonder about the cultural impact of them? Could you imagine a world in which the key scenes in Grease or Back to the Future are centred around young people gathering at the local bank to invest a small amount of cash each week, instead of squandering it on yet another strawberry milkshake? It would certainly have more influence than the stupid banking adverts we see of black stallions galloping down your local high street. I have noticed that Vanguard has been advertising on TV recently, but have to admit that, other than noticing it, I couldn’t tell you one message or scene that the advert contained. Maybe they should have gone with a white horse?

On the other hand, maybe I should just be heartened that Vanguard is actually now able to advertise, regardless of how hopeless they’ve been about getting their message across. I count myself really lucky that I discovered Index investing almost thirty years ago, because I still reckon nine out of ten people I know have no idea what Index tracking funds are. In fact, the majority of our best friends, incredible as it is to write this, hold most of their life savings in cash. As for what their pensions are invested in and how much they are being charged for the service, well, answers on a postcard please.

I could also use the reflection on time going by to moan that in the Nineteen Eighties there was no information for young people like myself on the glories of compound investing. Or actually on anything to do with the stock market. I read J L Collins, who started his investing career in the Eighties, and think to myself where was I and what was I doing with my time and money at that point? Those were the most important years for saving! Why was I squandering my cash on going to watch popcorn films like Grease? 

Well, I’m glad I went to see Grease instead of saving the cash. Iconic films of your youth remind me there’s a lot more to life than money and that the years go quickly by. I also won’t try to justify the post on the basis that this subject could be relevant to at least three of the four words of my blog title. That feels just too crass. But I have written a few draft posts trying to find something worthwhile to say about “gathering rosebuds while you may”, because I do feel myself thinking that a lot more in retirement. With that in mind, maybe it’s time to go and watch Grease again.