My Tuppence Worth

The question of the week in the UK FIRE blogshphere is: Could Channel 4 have made a less effective TV show about “How to Retire at 40” if they’d tried? The answer is a resounding “NO!”

For me, the show didn’t get off to a great start. As a thick, Northern, Brexit-loving, neo-fascist who could hate gays, women and disabled people, I have to be reminded to celebrate diversity by my intellectual superiors at Channel 4 through their selection of presenters. Patronised? Moi? Surely not.

Putting aside my petty hatreds, the first couple of minutes of the show sounded promising.  The presenters announced that there was a growing amount of people interested in the concept of Financial Independence and Retiring Early in the UK and that they were going to explore the subject from a variety of angles. This seemed like a decent premise, and I felt a wee glow of pride in that I found the book “Early Retirement Extreme” back in 2010. “I’m a pioneer!”, I cheered, and then quickly warned myself not to become the FIRE equivalent of someone who claims that they were at the first Sex Pistol’s gig in 1976. It’s really not that big a deal.

The show quickly went downhill from there, and it soon became clear I wasn’t the intended audience and neither was any of the rest of the FIRE community. We wanted to see the elegance of the maths (which The Escape Artist made a heroic attempt at, no doubt, only to edited down to about thirty seconds of soundbites “You only need to save 75% of your income and you can retire in seven years!”) We wanted to see the heroes of FIRE, Jacob Fisker, Mr Money Moustache et al, and not some bloke selling potatoes who was happy to tell us what his profit was, but not his turnover, and young Pippa of Nut Butter fame, who was happy to tell us the turnover of her business, but not the profit. I held my breath to hear what Huw from Financially Free by Forty would say, but clearly the editor had decided his contribution was going to be his startling good looks alone.  As for Julie and Jason, whose blog I follow as they wander around Europe on permanent holiday, if they’d a point to make I must have missed it.

The following day at work, the couple of colleagues I’d nudged to tune in informed me that they’d squandered an hour of their lives on “utter crap”.  “What was it all about?” they asked, and I was at a loss to tell them. As I’ve tried to evidence on this blog, I’m no evangelist for Retiring Early but would like to see a rise in interest on Financial Independence. I had harboured quiet hopes that this show would at least spark some interesting debate on the subject, but judging by the complete lack of reaction following it in the national press I can’t help but feel an opportunity has been missed.

It’s easy to criticise and forget that while we in the FIRE community had this show planned as TV event of the week, the rest of the nation were immersed in the body-shaved car crash that is Love Island. We find this stuff incredibly interesting and appealing, but 99% of the rest of the population couldn’t give a toss about it. That’s what the producers were up against. But when the Mad Fientist can string together a bunch of immersive, informative and entertaining podcasts on FIRE and the people involved in it, is it beyond TV to produce something of a similar ilk? As it stands it seemed all they managed to do was annoy anyone interested in the subject while failing to interest anyone else. Bit of a shame really.


Tell Me Lies

I’m reading an interesting and entertaining book at the moment, “Everybody Lies: What the Internet Can Tell Us About Who We Really Are”.  It’s about how Google searches tell us much more about people in general whereas relying on surveys, or Facebook, Instagram, Twitter – or even blogs! – is perhaps the worst way to understand anything about anybody because almost nobody “tells the truth” about themselves on these platforms.

Then, driving into work, I decided to listen to a podcast I haven’t for some time, the Dave Ramsey phone-in, a very American biased show about debt, money issues and how to deal with them (hint: buying Dave’s books, audio tapes and signing up for his courses helps).
Dave alway starts his shows with the adage that his is a world where:

“debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice.”

Unfortunately though, having “a paid-off home mortgage” is one of the least symbols of status you could imagine. Look out your window. How many people in your street have paid off their mortgage? Exactly. You’ve no idea. Like the fabled “Millionaire Next Door”, you’ll never meet your mortgage-free neighbours unless they introduce themselves as such.

Similarly, on the internet, if everybody is lying, does that include Mr Moustache, Jacob Fisker or even little old me? Are we really walking the talk? Or are we just broadcasting a facade to the world for some ulterior motive?

After all, attaining FIRE is quite a status symbol, isn’t it? Or at least telling people you’ve attained it is. I’ll hold my hands up here and admit that I got a nice charge from telling people I had retired early. I was proud of this fact, although now having gone back to work I kind of wish I’d kept my mouth shut. Outside of pride and ego, I’m not sure what my motivation was for announcing it. I like to think it was something more than just to parade my own “status symbol of choice”, but I don’t know. I sometimes think that I had to tell people as a way of committing myself more to the idea of retirement and I do think there is a germ of truth in that. It’s just not a very big germ. Maybe I thought I’d be a bit of an inspiration to people, but that’s a pretty vain assumption too. Perhaps I felt it made me a bit of a curiosity, a slightly more interesting person who, as Dave Ramsey states, “lived years like nobody else to now live like nobody else”. Pride, vanity, ego. Surely there’s more to it (and me!) than that?

Well, one thing I could argue about why I told people I’d “retired early” was that I was definitely inspired and motivated by the FIRE bloggers who I’d discovered via trying to learn more about investing, saving and being cheerfully frugal as a lifestyle choice. If it inspired me, perhaps it would inspire others to adopt, what I felt, were worthwhile goals and objectives? There is an alternative to buying pairs of £500 shoes, if only more people knew what those were. I can’t say I wanted to be an “inspirational figure”, I just felt that maybe some people could learn from my example and experience of the FIRE lifestyle that seemed to be gaining prominence in certain circles. When you’ve experienced something positive in life, you’re kind of inclined to want to share it and I find that blogging allows me to do that whereas trying to “convert” individuals on a personal basis is, I find, being a bit more evangelical than I want to be. When if comes to my blogging, people can take it or leave it.

So, as my blog attests, the “retiring early” part of the FIRE equation didn’t work out and I wanted to write about that because I was fairly sure I wasn’t the only one out there discovering that I missed the workplace once I was out of it. All the same, I didn’t want to dismiss FIRE as a waste of time because the “Financial Independence” part was a massively positive goal that I couldn’t see a downside to. The difference between having to work for a living and choosing to work to enhance your living is massive, and more people should strive to allow themselves the opportunity to achieve it. I’ve seen quite a few bloggers describe this state of employment, where you’re not doing it for the cash, as having “FU Money” but when I see my salary drop into the bank for doing a job I’m choosing to do, it’s more “Thank You” than FU!


My Top Ten Pension Questions

As I approach 55, and the first opportunity to take my Defined Contribution pension, I keep going back to the same questions about pensions that I feel I should either find out more about, or make a decision on. I’ve listed them here, not necessarily looking for answers, just trying to get them out my system:

Do I take my DC pot at 55, even if I don’t retire then?

This is so I can get my hands on the 25% tax free sum, before the Government come in and reduce it. When it comes to pensions we almost all take it as read that the endless tinkering on this potential cash cow by whichever bunch of inadequates happen to be in power will just never stop. But why? Why can’t they leave us in peace and let us do our sums against a background of stable assumptions?

If I do take my 25% cash Lump Sum, do I “recycle” it back into personal SIPPs to get some tax relief?

This is where pensions begin to get complicated – even when you’re trying to keep it simple. There’s also a “moral and ethical” aspect to doing this which, frankly, as long as I’m not breaking the law, I’ll consider for all of two seconds before I do it. My bigger problem, I feel, will be “Can I be bothered”? working it all out and then taking the necessary administrative steps. Which leads me to my next question:

Do I get Professional Pensions Advice?

Can I get it for free, is my rejoinder to that one. Isn’t all relevant information available on the internet anyway? Of course – but how much of it is “fake news”? There seem to be so many shades of pension options that I’m never sure if what I’m reading applies exactly to me. It’s like when the newspapers do those tables of how the budget will affect you, and they pick about six different groups – singles, married couples, pensioners, students and so on – estimating their incomes and expenditures. Never once  in history has any one of these sub-groups applied exactly to my situation.

Assuming I take my DC pension at 55, and my cash free lump sum, how much then do I drawdown?

Firstly, what are the damn rules on drawdown? What’s the minimum I can take a year? What’s the maximum? Will I still be working? Is it beneficial to continue working? Should I go part time? If so, what’s the most tax efficient approach?

Am I in danger, when taking all my pensions into account, of exceeding the Life Time Allowance?

Absolutely no idea. I’ve taken the “protection” available, although I’m not quite sure what this means. I can’t seem to get an estimation of what my Defined Benefit pot is worth, or will be worth when I decide to take it. I’ve written three times to the provider to get some guidance only to eventually be informed of a sum of money that I’m due per annum. But is that if I took it at “normal retirement age”? And is it in today’s money? No lump sum options are given either. I used to get a really clear statement every year about this pension. Now I have to write and then wait two months for a rubbish response.

How much will I need to live comfortably in retirement anyway?

Well, I’ve come to answer on this one. It’s: How long is a piece of string?

What’s the best Spreadsheet to estimate (a) what my pensions will be worth and (b) how I might take them over thirty years?

An easier question might be how many spreadsheets do I have trying to work through these scenarios? I’m only certain that it’s too many. I do have a “definitive” effort sitting on Google Docs, but that only serves as the model that I compare all the others to. It will also only be “definitive” until I find one that I think surpasses it (i.e. gives me a better outcome).

Will the State Pension be means tested by the time I get there?

If there’s anything that the last General Election taught us it was that if you mess with Pensioners benefits they will vote you out of office. They won’t even give up on a free bus pass, for Gawd’s Sake, so no, I predict that this isn’t about to happen anytime soon.

What are the rules when it comes to pensions and inheritance?

Answering this question means I have to contemplate the fact of my own death. Which I currently refuse to do.

Haven’t I anything better to do with my time?

This is always my final pension question after hours of wrestling with the above ones.


Working (for a) Living

It’s been a tough week. Yes, for lots of reasons, but I’m not going to be talking about politics here, nor terrorism, nor the horror and scandal of what happened at the Grenfell Tower in London. No, I’m not discussing those, but suffice to say they help put the worries and troubles of my own little world into perspective. So many others have so much more to worry about than I do.

Having said that, it now seems almost pathetic to state that the reason I’ve found this a tough week has been because it’s been really quiet at work, and I find that difficult to deal with. We all know people who can turn up to work, have one task to complete in the day and then find a multitude of ways to not complete it. That’s not me, I’m afraid, and I’d guess for the majority of FIRE adherents that’s not you either. If I turn up at work at 0900 with one task to do, I’ve usually completed it by 0901 and am looking for the next one. We are the type of people who set goals, take action, push out into the world and make changes in the hope that these will help us attain our ambitions. We’re doers, whether that’s in the world of work or leisure. We fill our days and we’re happiest when we get to the end of the day, pour ourselves a beer, a glass of wine or a cup of tea and reflect on what we’ve managed to achieve in the waking hours.

I reflected on this when one of my recently early-retired golfing buddies mentioned that he’d “Never been busier” since quitting work. He then added, “I’ve just not had time to be bored, not like you were when you were retired.”

Well, I’m sorry, but if I ever did say I was “bored” in my year out, that’s not what I meant. I wish I had been just “bored” because I could have fixed that in a millisecond. There are endless enjoyable ways to fill empty hours – take a walk, read a book, splurge on a Box Set, listen to podcasts, cook, bake, go for a swim, go to the pub, practice your golf…..on and on the list can go. Boredom? Of course there were times when I would admit that I was at a loose end, but it was never a major problem. It could be rectified.

No, filling the hours wasn’t an issue. For me, the problem was filling the hours with things that were, in my mind, constructive. What I was looking for in my retired days was “fulfillment” and, as those days stretched on, that became increasingly hard to find.

It’s funny, because my attitude to this changed over time. In the first month or two of my retirement I was ecstatic about having the ability to take ninety minutes to walk into town from home and reward myself with a nice cup of coffee and a read of the paper in a favourite cafe bar once I’d arrived. I’d listen to podcasts as I walked in and reveled in having the time to think about what I was learning, maybe heading to the library later in the afternoon to find a book on a subject that had whetted my interest. It was fantastic. At first. But, as my diary attests to, nine months in and I was moaning that this self-same activity was a total waste of time and was doing my head in. What was it achieving? How was I growing? What was I contributing? If I was learning things, how was I applying them? Really, what was I doing with my time?

Perhaps this was a legacy of the near thirty years of working life I’d had up to that point. It was never going to be easy to readjust. I thought that in acknowledging this situation I’d find a way to cope with it. The thing was that I expected to come to terms with lazy days over time, that I’d grow to ever more appreciate them and the finer things in life that my career had prevented me from enjoying. But that wasn’t the case. If anything, the feeling that I wasn’t achieving anything concrete with my days began to torment me and I realised that, at the bottom of it, I was missing work.

Was this a bad thing? I came across an interesting TED talk this week, where Mike Rowe laments the way manual work has been demeaned in today’s society. I could argue the same for many white collar jobs too. There’s a cliche that “Nobody on their deathbed ever stated ‘I wish I’d spent more time at the office’”, but in my retirement I found myself thinking that I wished I could spend at least SOME more of my time in the office! “You don’t know what you’ve got ‘til it’s gone” – another cliche that has an element of truth to it, but that’s not the whole truth either.

So yes, I’ve had a quiet week at work and I’ve found it tough, but it has not been as tough as having a quiet week at home. That’s one of the things I discovered in my early retirement and, for the moment, is something that that I’m happy to have rectified through finding a job.

Home Thoughts

It’s the eve of the General Election and it seems to me that there are two groups of voters that all the parties have to attract and woo – the young and the old. I like to tell myself that I’m the squeezed middle, but have to admit that I’m heading toward the latter camp much faster than I’m comfortable with, and thus I know where my sympathies selfishly lie.

That’s not to say I don’t relate to the predicament young people today find themselves in, I just don’t understand why more of them don’t seem to recognise it? Or, if they do, don’t seem to be overtly bothered with the debt ridden future that faces the majority of them.

While the young probably figure that the future will work itself out and live a bit more for the moment, the nearer I approach pensionable age (which I’m taking as 55) the more I find myself pondering the future and trying to work out the detail. What steps do I have to take to fully realise the next two, or hopefully three, decades of life that might be left for me to really enjoy?

For those of you who’ve managed to plough your way through self-improvement tomes, there’s a trick or technique they often encourage you to employ to help you work out your values and what’s important to you in life. What you have to do is vividly imagine your own funeral service and focus on what your close family, friends and possibly colleagues might want to say about you in a eulogy. What would you want them to say?

I’ve played with this technique over the years, but I’m a bit like Woody Allen when it comes to my own death – I’ve no intention of being there when it actually happens. And, on the occasional time when I have actually had a serious attempt at imagining this situation, I can’t say I found any blinding insights. I didn’t imagine anyone getting up and saying, “He had a fantastic house that we all envied, with that red Ferrari parked in front of it. And wow, I see he’s still wearing that Rolex Oyster there, lying in the casket.” (Actually I can’t imagine anyone picturing that at their own funeral, except maybe Piers Morgan.) What most of us probably think about are people extolling our social connections, the deep friendships we had, the importance we placed on being close to our loved ones.

Another thing I don’t imagine many people thinking about is their funeral taking place on some distant shore. I have a few friends who are currently enjoying the expat life in Hong Kong, Dubai, Spain, the Philippines and so on. I’m sure none of them have any intention of dying in these countries though, because all of them, when I’ve asked, are imagining retirement to a serene Scottish shore, or a rose covered English cottage with the village pub a stone’s throw away. Where, of course, everybody knows your name. Which begs the question of why they left in the first place, but we all know the answer to that, don’t we? Unless they’re running away from something, it’s usually money, or an improved life they think money can buy, that they’re running toward. Fair enough, I say, I’ve been tempted to do the same myself over the years – but I’ve never imagined anything but my own retirement here in Britain.

It strikes me that the young know and appreciate the value of friendships and community every bit as much as the old. I don’t think you ever forge as strong bonds with anyone as you did when you were young. If you’re lucky, and work at it, you’ll keep those friendships with you for a lifetime and you’ll always feel your heart warm a little bit when you walk the streets of your old home town.

So, given that the young and old seem to have a surer sense of what’s important to them, it’s a bit sad that the election focuses so much on the monetary side of life – tuition fees, tax bombs, the cost of social care, whether or not you’ll receive a free bus pass. Yes, those things are important, but when they exclude everything else then we all end up poorer because of it.

Taking Account

I see that some celebrities have been struggling with FIRE this week. Ryan Giggs was quoted as saying, “Retirement is a big problem. I lost the energy I had and I needed other projects. People say “You have earned your money”. But money has nothing to do with it. You have still got a life to live.”

Then up stepped poor old Fred Goodwin, Billy No Mates. Well, he has one mate, who admitted to the press this week that Fred’s enforced retirement was leaving him “intellectually under-occupied”. (It seems to me that Fred didn’t do too well either when he was intellectually over-occupied at RBS.)

I mentally file away such comments. Having just returned from three weeks holiday to work, I walked into my dull little office while the sun beamed down outside to find the same pile of problems, issues and unresolved small conflicts that had been there when I left. Nobody, as ever, had tackled any of them in my absence, booting them into the long grass for my return. Deep sigh. But, as I pulled a chair up to my desk and turned on my PC, I mused, “You know, I could walk into the boss’s office right now and tell him I was off. Like right now, today. What could he do about it?” With that thought in mind, I was more able to face the day ahead. I was choosing to do this job, and I can thank FIRE for that.

Work versus Retirement. It’s all in the mind. Psychologically, you have to be ready for both. I thought I was ready for retirement and that I’d had my fill of the office, but that turned out not to be the case. It was a shock to me when I quit the workplace when I found that I could be on a bigger downer facing an empty day at home than I’d ever been at work, but it was a fact. This was largely because when I had an empty day in my “retirement” I’d give myself a hard time about it, feeling that I was failing, that I was doing nothing constructive, that I was fading from view, becoming inconsequential and achieving nothing. It really wasn’t fun. Work can be a lot of things, or at least the type of work I do can be, but the days are very seldom “empty”. And I always end the day feeling that I’ve accomplished something, even if it was just turning up. A lot of people don’t even achieve that.

Another psychological facet of work versus retirement is the financial one. I refrain from going into detail about my finances on this blog, but I will state that my retirement financial goal was to have the same net monthly income in retirement that I’d had when I was at my “peak” earning power. I felt if I could manage that, I’d be sorted. When I hit fifty and found my career at an end, a substantial “good leaver” package from my firm helped me achieve the goal I’d set myself. Or at least that’s what my spreadsheet forecasts indicated. Given that I no longer had to salt away a big part of my salary toward my retirement goal, my net income in not working was exactly the same as the net income I had previously received in pay. Nice one.

But in realising this goal, I had now to actually realise it. Every month I had to cash in investments equal to the amount my firm used to pay me. I didn’t have to “pay myself” this way, but that was the way I preferred to do it. At first, I got a big kick out of doing this, but it soon wore off. In fact, I came to dread “pay day”.  I’m just not a spender, I’m a saver, and the retirement role reversal was just so hard to take. I felt I was the type of person who didn’t reduce savings, I built them up! It was actually nothing to do with the amount of money that I had to withdraw because I felt I was “safe enough” in that regard. It was more the action of making the withdrawal with no proactive plan for the cash other than paying living expenses which was an existential shock to me.

Now that I’ve returned to work, I tell myself I’m spending every penny I earn because I deliberately don’t save any of my current salary, even the bit that I could afford to. I’m not depleting my investments, but I’m not adding to them either. I’m a lot more comfortable with this situation. I feel it’s a bit of a halfway house between the sublime (saving a load of my cash) and the ridiculous (spending a load of my cash).

I still have days at work when I ask myself if I’m ready to retire again? But the intellectual and social stimulation work brings, plus the cream on the cake of being financially compensated for it means that I’m just not ready for the retired life yet. When will I be? No idea. But I’ll let you know when it happens.

Minority Report

Over the last few weeks I’ve been delving back into the blogs, articles and podcasts posted by the FIRE community which I always find interesting, full of good advice and, occasionally, inspirational. But, after a month of it, I’m beginning to wonder if all that can be said about the subject has already been said? As ever, you can make anything over-complicated and repeat basic tenets in a million different ways, but it seems to me that FIRE boils down to a few simple concepts: avoiding debt, spending less than you earn (and the more you earn, the better) and investing regularly into passive Index Tracking funds over a longish term – so add to that the fact that the earlier you start, the better. Pretty soon it feels that it’s all rather obvious, common sense and hardly news to anyone.

Sometimes I have to pause and tell myself that no, hardly anyone is talking about FIRE and the subject is still a minority report. The evidence isn’t hard to find. List ten well-known blogs about FIRE – well, you could probably do that without too much difficulty. List ten well known UK blogs about FIRE and that’s a bit more of a challenge, although most of us on these sites could have a good go at it. I’m well aware, however, that I’m preaching to the converted here in the blogosphere – you’re reading this, no doubt, because you’re interested in financial matters and connected affairs.

What signs are there that the wider world is interested? A small test could be to go to the library and try to borrow five books on FIRE. Not Amazon, where you could easily find five books focused on the subject of the sex lives of Patagonian grasshoppers, but the local library. There will be a few books available that are devoted to investing and general money matters, but investing or being astute with money are not the same thing as Financial Independence, although they’re strongly connected.

As far as books on Early Retirement go, I’ve never found any at the local library. Sure, you’ll find a few books on retirement in general, but pretty much all I’ve seen are aimed at pensioners.  

What other sources do we have in the mass market that are talking about FIRE? At the weekend, I always have a good two hours reading the Sunday Times and have done this for years. After browsing the main paper I turn to the supplements, and my second choice of reading is always the Money section. I often wonder how many people do likewise, because when I visit the gym (where they stock free daily newspapers in their cafe) it’s generally the Money section that’s available to read, sitting unopened and unloved on the rack while just about everything else is either missing or well-thumbed.

For a few years now I’ve looked forward to reading something about FIRE within the Money pages, but it’s yet to happen. I wonder why not? To me, it’s an interesting and appealing concept and I know I’m not alone in this. It touches on loads of the subjects that are featured regularly in the Money section – pensions, investments, property, taxes and so on – but as yet FIRE doesn’t seem to have a mainstream market even within the broader financial community.

This may be changing. I recently wrote about our guru, Mr Money Moustache, being profiled in the New Yorker and he’s recently been interviewed in the much downloaded Tim Ferriss podcast. I’ve also seen him being interviewed on American TV, so if the FIRE movement is going to have a Buffett-like figurehead and cheerleader then it looks like he’ll be the one. Which is great, but I’m not so sure that the coverage will necessarily be as focused on the subjects that most of us are likely to hope it will be. TV is much more interested in image over message and style over content. Nobody will really care about how MMM reached his goal, they’ll be more focused on what it means in terms of what he has got – how big is his house? What’s he got in the bank? What does his wife look like? Does he have a big flat screen TV?

Recently, like some other UK bloggers, I’ve been approached by a UK TV company who seem to be interested in making a pilot about Early Retirement. I doubt I’ll participate, but I would be interested in seeing the output of the show, and I would hope they’d focus on the simple principles that underpin FIRE which I outlined in the first paragraph. It’s about clearing debt, spending less than you earn, saving hard and investing simply but astutely. Even I’d admit that these aren’t very sexy or appealing concepts. They look like hard work and they are hard work, done over a long term. There’s no quick wins, instant celebrity, millions to be made overnight. Nothing that TV really likes. I’d hope it would be a positive show, but I fear it could be a “Look at this guy, living on lentils and knitting his own socks in an effort to retire at thirty five”. (Either that or “Matched Betting Ruined My Early Retirement Dream”)

In fact, thinking about it, I’m not sure I’d want FIRE to become mainstream. Would I want to be bombarded by adverts in the Money section promising to help me retire at forty? Would I want to see Mr Money Moustache torn to shreds in some sort of “You’re alright Jack” expose that unpicks the financial underpinning and background to his story? Would I want the Daily Mail to reveal how FIRE is just an upper middle class dream that’s basically impossible for anyone earning the UK average wage these days?

No, I think I like it as it is at the moment, where the people interested in the subject are interested in it for the right reasons. After all, isn’t it true that the best clubs are the more exclusive ones, the best bands were always better before they became popular, the best books are seldom bestsellers and the best films are either indie, arthouse or foreign? The mainstream ruins everything, doesn’t it, so maybe we should keep FIRE to ourselves?



Maggie, Maggie, Maggie

A couple of times this week I’ve read the same statistic, that a young person leaving University to begin a career that pays enough to allow them to start repaying their student loan is going to be taxed at 41% from Day One they cross the earnings threshold of £18.5k.  Simply put, it’s 20% basic income tax, 12% National Insurance and 9% student loan repayment.

It seems that Jeremy Corbyn has twigged to this, and thrown the abolition of tuition fees in the ring as a potential vote winner, and this will certainly appeal to a lot of people. But my question is: where are all the young people protesting about this phenomenal tax burden they’re going to have to carry? Ye Gods, when I was at University, every single time our student grants were threatened we were out on the streets, stopping traffic, chanting “Maggie, Maggie, Maggie, Out, Out, Out” and occupying the library until it was clearly time for a deserved pint or six down the Mandela Bar (i.e after about twenty minutes of sitting in the library cafe.)

To me, it’s absolutely incredible what has happened in terms of the cost of education with, as far as I can see, hardly a peep from the general public or the students themselves. Okay, maybe it’s killed off the Liberal Democrats in the short term, but the fact that Clegg felt he could renege on his promise to end tuition fees as quickly as he did just shows the complete disdain and disconnection many politicians have for ordinary people. Clegg and his ilk are from a background where thirty thousand pounds of debt is play money. Surely most people spend around that amount each year on holidays?

But, after a short vent of middle class fury against Clegg taking them for a ride, it seems that everyone has accepted that we’ll just have to get on with it. When you think about it, if your degree does help you gain a decent career, then actually the loan system is fantastic value for money. Isn’t it?

Well, maybe. But when you take the 9% repayment, lump in a further 32% of taxes, then add whatever you’re going to have to put by for a pension – and you’re absolutely going to have to put by for a pension, unless you’re insane – well, if I was a youth today, I’d be damn angry about it. Especially if I read blogs like mine where Baby Boomers in their fifties ponder early retirement and the most tax efficient ways to drawdown their pensions while wondering if they can be bothered taking two long haul holidays a year? A Baby Boomer, that is, like me who was given a fantastic free education, who took out a mortgage as soon as he started working (required deposit, fifteen hundred quid and a 95% loan) and sat back to watch property rocket over his working lifetime. Nice work, if you can get it. Which you no longer can.

The repayment burden of student loans is one thing, but the underlying message that debt is necessary, and maybe even a good thing, is even more outrageous. Debt is the one thing that everyone should be trying to minimise and avoid. Instead, what we have is a system that’s telling us that debt is fine, it’s manageable, it’s a fact of life and it’s nothing to be frightened of. Your Student Loan debt, it’s just like a mortgage really – which, dear student, you’re never actually going to have, unless the bank of mum and dad step in. As far as I am aware, your outstanding student loan debt will be taken into account whenever you’ve finally scraped enough together to put down a deposit on a property. In your forties. When most half decent “starter” homes are going to be coming in at around two hundred grand. Good luck with that. (They’re probably already more expensive than that in London.)

Corbyn will probably win a few votes in promising to abolish tuition fees, but I doubt it will make much of a difference to the election result. Why should I get angry about though? It’s not my problem. I’m alright Jack. I think. But I see Theresa May is starting to muck around with pension commitments. She better watch out. We are Thatcher’s Children in more ways than one. There really is no such thing as society, except the Baby Boomer’s pensioner one, and these days we don’t protest on our feet, we do it at the ballot box with a pen.


Le Triple Lock

I see that one of the carrots being dangled by Marine Le Pen before the French electorate is a retirement age of 60. Meanwhile, here in Blighty, we are looking at ending the “Triple Lock” on pensions as the Tories realise that even the Oldies probably won’t vote for Corbyn under (m)any circumstances. Time to fill your boots, raid the pension pots of the great British public while kicking the more thorny problem of how to tax Google, Facebook, Starbucks, the banks et al into touch. It would make you puke. The paucity of original thought and ideas in Government is breathtaking. It’s a never ending retread of the same paths where the outcome is always that Joe Public will pay. Meanwhile a pint of milk or a gallon of petrol costs the same for Philip Green as it does for my old mum. This is what we voted for. Or rather, this is what we voted for?

Hey ho. Enough of politics. Retiring at 60 for everyone though, is that a good idea? I’m not sold on it. I think we need to be thinking more about how people’s lives after 60 can be more worthwhile and can be seen in a more positive, fulfilling way than merely putting the feet up in retirement. Ageism is a massive issue and was something I had a taste of myself when I tried to re-enter the job market in my fifties. When your CV covers more years that the headhunter interviewing you has been on the planet, you can’t help but feel a wee bit uncomfortable. This suddenly dawned on me when I explained a project I’d once led to a young “recruitment consultant” and realised that she was probably four years old when I’d completed it. But, to me, it seemed, and still seems, like recent history. To return to politics for a second, Tony Blair being elected for the first time seems like yesterday, never mind it was twenty years ago. Twenty years ago!!

Deep sigh, there I go, sounding like Grandpa Simpson. It was a lot better in my day, mostly because I was twenty years younger then! Those years have gone by quickly and, based on experience, the next twenty to come will speed by even faster. I always liked the Tony Robbins statement that the only sure things about your future years is that you’re going to live through them, so how do you want them to look? Thoughts like that keep me going to the gym on a regular basis and, to be fair, the pub. I want to be healthy enough to still enjoy a decent pint of ale down my local in my seventies!

The thought also pertains to my work. When I “retired” at fifty, I found I really wasn’t psychologically ready for it. I still wanted to work, to contribute, to be part of a team and to be rewarded for a job well done through a pay packet. After all, that is what I’d known, and on the whole enjoyed, for the best part of thirty years and, when it disappeared, I missed it. I also didn’t choose it, because I lost my job through redundancy, and perhaps that was part of my problem. Now that I have returned to work, however, it often hits me with a start that I only maybe have a good ten years of a career left, if I choose to stay in it (or my company allows me to stay). Ten years? That’s a blink of an eye. For me, part of a job was always trying to progress within it, gain the next rung of the ladder, take on more responsibility and stretch myself. It still is, but I recognise – have to recognise, maybe – that perhaps I should now try to progress in a different way. What I should be looking for is maybe not the next promotion and wage increase, but to gain the next set of skills or network that will help me better when I next face “retirement”. Mentally, I can’t see myself much different in ten years from where I am today. My mum, facing eighty, still maintains that she thinks like a twenty year old, despite all the evidence against it. She still is who she is and will always be who she was. Why will I be any different?



My post last week was about how people in general are frightened to invest in the stock market while I, daring rebel that I am, have been shelving all my spare cash into equities for years. At the weekend, however, I read through this post by Jim Collins where he talks about the Wealth Accumulation stage of your life versus the Wealth Preservation stage. There’s no doubt that I am in the latter camp but, it struck me, I’m still acting as if I was in the former, because I’m still about 95% invested in equities.

I read what Jim has to say on Wealth Preservation – that basically I should now have about 25% in bonds – and think that he’s right (providing that you keep reallocating to this ratio as the market moves.) The trouble is, equities have been so good to me over the years (I think) that my own personal strategy of “do nothing” always kicks in when I think about making any changes to where I put my money. Leave it be. It ain’t broke, so don’t fix it.

Funnily enough, Jim also backhandedly supports this strategy when he mentions that Fidelity recently did a survey of their most successful investors:

Word is, Fidelity reportedly conducted an internal performance review of accounts held between 2003 and 2013 to find which did the best. The results:

  • First: Dead people
  • Second: People who forgot they had the account

I’m not sure if those dead people were 100% in equities or not, and reading that survey leads me to think, “You know, life’s too short. Why not go and spend some of your damn money while you still can!”, which immediately sees me following The Rhino’s advice to go and take a cold shower and calm down. Spend it? We can’t have that.

Anyway, my other balance against switching equities into bonds is my Defined Benefit pension scheme. God Knows how that’s all invested and, for all I know, He might care about it too. I don’t. I just want it to pay out, solidly, securely and forever, as it said it would. For me, that’s the really passive, conservative part of my investment portfolio that I’m never going to tinker with.

And then there’s the not to be sniffed at State Pension too, which I often forget about. Providing that me and my Darling Other Half both get to draw upon that, it will provide around fourteen grand’s worth of household income every year. That’s actually quite a bit of cash. With those two “bankers” to come (plus my wife’s NHS and Council DB pension schemes too) surely I can afford to “gamble” whatever else I have on the markets?

The State Pension, when I do think about it, does lead to me ask what I think I’m going to be doing with my money at sixty seven years old? For me, that’s about fourteen years away and those fourteen years are going to be, probably, the best I’ll have in terms of health in both body and mind. Shouldn’t I sprinkle some of the sugar of wealth on top of that while I still can? Because I can already see signs that my world is beginning to shrink. I used to happily take two long haul holidays a year. These days I can hardly be arsed taking one. I just can’t be bothered with the hassle of flying ten hours somewhere to be confronted by a McDonalds or KFC, the same traffic jam I just left, adverts for HSBC or Barclays and another bleeding slew of shops selling the same tat that I can buy in Aldi, Lidl, Debenhams etc etc.. As for heading somewhere unsullied and uncommercialised, well, the Scottish Highlands offer that in spades. Am I rushing there every spare weekend? No, so why would Peru or Nepal be better? Seen one mountain, you’ve seen ‘em all. I mean, if that’s how I’m thinking now, how likely is it that when I’m sixty seven I’ll suddenly be jumping on a flight to Auckland just to hear the pilot announce “Welcome to New Zealand. Please adjust your watches back twenty years” which allegedly happened when one of my mates holidayed out there. And, when I asked him how he found it, he replied, “It’s a bit like the Scottish Highlands”.

Given that, maybe I’ll just continue to try and enjoy my life and investing on pretty much the same trajectory as I’m on now. It’s served me well so far and, when you think about it, choosing to “do nothing” is still “doing something”, isn’t it?