Jan 15 2012

I’m retired!

Published by under Pensions

How did that happen? Largely forced upon me by recession I reckon – not many employers are looking for 58 year old staff! Luckily, I’d been investing in pensions for a while and a few other things dropped into place at convenient moments. Now, though, I have to look at things in a different way. The first stage seems to be adjusting.

Sorting out your head

I had this view of retirement. A sort of feet up, cold beer, hammock kind of image. Now, it may be like that for some people but it doesn’t work for me – either I’m having a problem adjusting or this form of retirement isn’t going to work for me. Actually, I’m having a problem adjusting anyway and I think that’s simply down to the much more flexible routine. In fact it’s so flexible, routine is probably not the right word!

On the other hand fate may have thrown me a lifeline.

There have been studies suggesting longevity may be linked to retirement age but they are not conclusive. One thing IS conclusive – we ALL die sooner or later! That’s not meant to be a morbid observation rather, it’s a practical one. The sooner you retire, the sooner you can start doing things that YOU want to do rather than being tied to doing things that employers want you to do.

So, while the flexibility of my so-called routine is difficult to adjust to, there’s a goal to aim for! If I can get all the other things right I’ll have the freedom to do pretty much whatever I want. Thats part of the reason for writing this post – realisation is just beginning to dawn.

Of course, in retirement you’ll have less money, that’s almost inevitable. But, you should need less too. I’ve had some well-paid jobs in the past and, like many others, I’ve been wrapped up in the consumerism trap more than I should have been. That is, spending money on things I didn’t really need just because I had the money. Fortunately, I recognised that some years ago and started taking steps to free myself. Frugal living is now high on my agenda.

Frugal Living

It’s not about being poor! It’s just about not spending for the sake of it. For example, I have an aversion to regular payments such as mobile ‘phone contracts and subscription TV. They’re commitments to pay something every month for which you may not get good value and may not be able to easily turn off.

There are many sites on the Internet giving good advice but one that I came across recently has some good ideas. Jacob retired at 33 and you can find out how here. If you’re young enough, you could aim for similar goals, if you’re not you could simply make your retirement better and more fulfilling. Jacob talks about financial independence rather than retirement but, since retirement often means lower income, it’s worth looking at ways you can live well for less as well as how you can earn from a diverse range of income streams.

Originally, my income came from just one area, my salary, now it comes from a variety of investments and periodic work projects. The work projects are varied and optional i.e. if I want some extra cash I’ll let it be known locally that I’m available. I’m not particular about the type of work provided I don’t have to travel too far to get it and the cost of doing it is low. Hence the emphasis on local.

Part of my frugal living plan is, therefore, to have a variety of income streams. In effect, I’ve minimised my risk. Ten years ago I just had my salary and if that had disappeared I would have been in deep trouble. Loans and other commitments would have buried me in a matter of months if not weeks.

Today, many of the loans are gone as are most of the monthly commitments. If my work projects dried up tomorrow I could survive for more than a decade on the income I have. No, I don’t have a small fortune, just much reduced expenses.

Most of the time, people call ME on the mobile so I cancelled the contract in favour of pay-as-you-go. It’s pre-paid with cash. If I don’t have any cash, I don’t make any calls. Subscription TV was replaced by freeview and freesat, the only cost being the hardware to do it – not expensive these days. I don’t have health insurance – if you’re reading this in the USA be aware that the NHS provides free health care and, contrary to common belief in some areas, it’s very good! 

Insurance cover in other areas, such as death benefits, have been reduced to minimum levels – after all, there’ll be a decent pot when I go so the estate can pay for the send off! Day to day, I buy only enough fresh food that I will use in the next few days. According to Government figures, almost 7 billion tons of food is thrown away in the UK every year, 40% of which is fruit and vegetables. Some of this is down to cooking too much while some is as a result of buying too much and it going off before we get to it. This costs a staggering £3billion. Buy less, more frequently and save!

Save energy – it won’t get any cheaper, ever. Save by fitting energy saving lamps, installing insulation (there are often grants available) and double glazing. Supplement heating with wood if you have an open fire or have a log burner installed. Run the heating lower – fleeces are cheap and you can use them to go walking!

Investments

It’s true what they say – if it looks too good to be true it probably is. Treat investments this way and you won’t go far wrong. I’ve always invested in pensions and, now my pension is in a SIPP, I get much greater control over how and where it’s invested. But, in the interests of diversity and minimising risk, I have other investments including property and shares. I didn’t need to be rich to do this but it took a while.

At the time of writing a 4% return is considered good and relatively low risk. Some of my 4% comes from cash invested in notice accounts i.e. I have to give notice to make a withdrawal and some is in no-notice accounts – that’s the emergency cash!

Then there are the shares. I’m not a trading guru so I don’t buy shares to make a quick killing – I don’t know enough about this sort of thing and I don’t trust anyone else to gamble with my money. I buy shares for the long term, big companies with solid histories and global reach. Their products are things that people buy regardless, such as food, energy and general commodities. The sort of stuff people still buy even in recession. I also look for good dividends – that’s my income – but if the dividend is in double figures I get suspicious.

Filling in the days

I hate this phrase! I have absolutely no problem filling in the days, in fact, I have more things to do than I can fit into the average day. However, I still get people asking “But what do you do?” Whatever I want! If work is your only interest now, you’ll have a problem when it goes away – develop more interests right now! They needn’t cost much, if anything. It’s free to walk somewhere.

You could start by de-cluttering – put some time to good use and add to your income at the same time. Sell unwanted items on Ebay or one of the many free sites on the Internet such as Gumtree or Craigs List. Alternatively, put cards in the local shop or, in the Summer, have a garage sale. If you just want rid of it, use Freecycle or similar. If you’ve never done this sort of thing before check out this site.

[to be continued]

6 responses so far

Aug 15 2011

Navigating the pension maze…

Published by under Pensions

Pensions are a very complex area and, despite the huge number of individuals and organisations apparently offering help, they all seem to have a vested interest i.e. getting their hands on your cash! Here’s a quick guide to what I’m doing and why.

First of all, let me make it clear that I’m NOT a Financial Adviser and none of the following should be deemed to be advice, it’s all my opinion. However, if you do your own research I think it all makes good sense.

I’m at the stage where I’m starting to take money from my pension pot so if you’re just starting out then this is not for you – things may very well have changed dramatically by the time you get the opportunity to draw the cash.

Having paid into various pension funds over the years I consolidated into two funds a couple of years ago, luckily just missing the recession which would have seen my pots decimated. That really was luck! I would have consolidated to a single pot but the MVR (Market Value Reduction) brought tears to my eyes and since that one had a guaranteed minimum growth of 4% I was reasonably relaxed about leaving it where it was. I can get my hands on that one in 2014.

Everything else went into a SIPP (Self Invested Personal Pension). Why? Because I got more control and I don’t like Financial Advisers much! Over the course of about a year I looked at numerous investment options but I’m a bit risk-averse so I’ve opted for dividend-bearing shares. I selected large, global companies with a good history of growth and reliable dividend payment. The companies I’m most likely to invest in have good cash-flow projections (like Vodafone), supply products that are in demand Worldwide (drugs, drinks, tobacco, household) and utilities such as energy.

I’ve avoided most of the financial sector for obvious reasons!

Now this is certainly no get rich quick scheme, I’m currently on target to make around 5% this year, but it’s better than being in cash and it will help protect my SIPP against inflation.

I’ve opted to put my SIPP into draw-down mainly because annuity rates are so poor and once I take an annuity I’m stuck with it. On the other hand the payment from the annuity would be guaranteed so, if you want very low risk an annuity may be right for you. In reality, the payment from draw-down is about the same as the payment from an annuity but I’m more likely to get more of my money back under draw-down. That’s because annuity rates are, in part, determined by average life-expectancy and those that live longer are funded in part by those that do not. Unless you take out a joint annuity, when you die the fund dies with you. It’s used to fund those people who live longer than you do. Income draw-down can be passed to your spouse.

To find out how much you might get from your fund search the Internet for a GAD (Government Actuaries Department) calculator. I found one here. The GAD calculations change regularly so check you are using the most up to date tables.

I also took the 25% tax free lump sum but I’ve invested that rather than spent it! The reason for doing this is that I can only withdraw money from my fund up to the upper limit in draw-down so it’s not really cash. Most people who know about retirement will advise moving more and more into cash as you get older so this 25% represents my flexible cash element. I have some cash tied up in longer term, but low-risk, savings to secure a better return while the remainder is in easier access accounts in case of emergencies. A holiday in Spain doesn’t qualify as an emergency!

I also have some property so my portfolio is reasonably diverse.

I do my own research and NEVER respond to cold calls or junk mail even from my bank.

[to be continued]

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Aug 10 2011

Politics is just about…well, politics!

Published by under News,Topical Events

Politics is just about politics and it should be about more than that. It should be about leading, about governing and about building for the future. That’s the problem, there’s far too much one-upmanship to allow anything useful to be done. Too much sniping and too much stabbing in the back. We’re also very much a blame culture – someone makes a mistake and they’re forced to resign, never allowed to learn from their mistake and move on.

No doubt that the recent riots, primarily in London but latterly spreading to other cities, will be followed by opposition calls for an end to austerity measures. If only it were so simple!

Long before cuts were mooted graduates were coming out with degrees but no jobs to go to. There’s a limit to the number of jobs available to graduates so there’s no point having loads of well-qualified people with nowhere to work. Then there’s the ‘stupid’ degrees like David Beckham studies (Staffordshire University, UK), that’s pretty useful in the world of work! Then, of course, despite all that expensive education they STILL can’t spell for shit…

Then there’s all the cannon-fodder that used to get mopped up by manual labouring jobs and the armed forces, but are now languishing on benefits because the armed forces are cutting back and immigrants take all the labouring jobs. It pays less than benefits anyway! Point is, there’s little or no social mobility any more so people see no chance of improving their lot – not that there’s a simple answer as far as I can see.

Politicians need to not only listen more, they need to DO more. Do more with the ideas they get from the electorate instead of fobbing people off as though they were mindless simpletons. Yes, Theresa May, we know you believe in policing by consent. Well, ask the people in the affected areas of London what they think about the riots and you’ll get your consent – to send in the Police with water-cannon, CS gas etc. and give the rioters a bloody good hiding.

While the Police do their job politicians should consider this. Politicians made the country what it is, engineered a situation where it was possible for a mob of mindless thugs to cripple whole swathes of a city, loot, maim and kill with impunity. Longer term, politicians should be thinking of ways to atone for previous mistakes.

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Jul 25 2011

Is the Norway massacre a sign of the times?

Published by under News,Topical Events

Political Correctness is a form of repression and the harder you try and keep people in their little boxes the more they will rebel.

Radical elements like Anders Behring Breivik put into action what many people think but can’t debate because it’s racist (or something else-ist).

Where there is something to rebel against there will be a small number of nutters prepared to go to extreme lengths.

It’s not racist to consider unmanaged immigration wrong. It’s not racist to want to retain your own culture while allowing others to retain theirs. And it’s not racist to state that IMHO multi-culturalism doesn’t work, will never work unless it happens in an evolutionary manner and it’s insulting to have it rammed down my throat.

That said, I’m not gonna go off shooting anyone! I’ve just stirred the pot a bit – what do you think?

No responses yet

Jun 10 2011

Will common-sense die with the over-fifties?

Published by under Environment,Family,Work

They don’t seem to want the over-fifties in the job market while, at the same time, common-sense appears to have flown out of the window in the younger ones…

Take climate change, all you hear is politically-motivated claptrap from people with an axe to grind about something. Where’s the motivation for ordinary people to do anything? Perhaps it’s only experienced old grumpies like me that think about this sort of thing…

Yes, I know about oil, that it’s running out but transportation only accounts for ~28% of energy usage by sector. Industry uses ~22% while buildings consume the remainder. Buildings also gobble up 76% of the electricity generated. Okay, those figures are from the United States but I would guess they apply to pretty much the whole of the developed world.

Common-sense suggests to me that buildings, as the largest consumers of energy, are the first things we should be looking at with regard to averting climate change. Or is that too sensible?

Now, you could go berserk with your insulation but you could also reduce the amount of unnecessary commuting. Why do you need to go to the call centre when it can quite easily be done from home. The same applies to designers, publishers, administrators and many others. The wage bill could be reduced as the travelling costs would be eliminated. Building costs would be massively reduced as they could be much smaller.

Newer buildings could be smaller and more energy efficient – reduction in energy usage. Commuting would be reduced – reduction in energy usage. We over-fifties might get some of these new jobs too! After all, we could do them from our ‘easy riser’ armchairs and our zimmer-frames could remain at home 🙂

References:

Architecture 2030 – http://architecture2030.org/the_problem/problem_energy

One response so far

May 09 2011

Work from home…

Published by under Spam & Scam

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One response so far

Apr 24 2011

Austerity Measures

Published by under News,Topical Events

A the cuts start to REALLY bite it’s clear what’s going to happen, months of unrest from Public Sector workers plus dirty political manoeuvring from Labour keen to blame the Government for anything that goes wrong! Don’t get me wrong I’m sorry for the Public Sector workers who will lose their jobs, the teachers whose pension rights have changed for the worse and the budget cuts for local authorities.

However, I’m also sorry for all the workers who have not only lost their jobs but in many cases their pensions too as companies have failed during the recession. As for front-line services it’s not clear how the Government will prevent the likes of NHS management protecting non-jobs at the expense of medical staff. Rank and file Public Sector workers will take the biggest hit while their managers and the non-jobs will simply remain where they are. Public Sector is massively top-heavy, generally overstaffed and riddled with diversity officers and the like but what will they do to save money?

Correct! Make lollipop ladies redundant, refuse to take a reduction in their fat-cat salaries and blame someone else for their inadequacies.

Unfortunately, some people still don’t get it! The country is on it’s way to a national debt of a TRILLION pounds. The austerity measures will not reduce this, only prevent it from spiralling out of control. Unfortunately, many people seem to think that the national economy should be just like the millions of debt-laden idiots who make up the population.

The fact is, if we don’t achieve genuine savings then our World standing will be badly affected, it will cost us more to borrow and we could end up like Greece, Ireland or Portugal.

I know which I’d rather be.

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Mar 29 2011

Special Education Week

Published by under Family

Its Special Education week, and this is in HONOUR of all the children who need a little extra help, patience & understanding.

We all need a hand one way or another, please don’t discriminate 😎

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Feb 17 2011

Stirring things up!

Published by under Humour,News,Topical Events

Getting into the spirit of things this morning having woken up listening to all the bleeding hearts and artists…

  • I’ve just finished my soundproof room where parents can come and slap their children secure in the knowledge that the EU will never know!
  • A second room has been converted into a bar – non-smokers will NOT be permitted.
  • I’ve started a fund to pay for Mark Gilbert, the thief who stole money from his boss, to be humiliated on a weekly basis or until he hands back the compensation he won.
  • I’m currently working on a new diet plan. It is equally suitable for men and women (no sexism here!) and will feature Full English breakfasts, beer, chocolate and a host of other goodies.
  • I won’t be having unmarried couples sharing a bed in my hotel, gay or otherwise. If they don’t like it they can bugger off!

[To be continued]

One response so far

Jan 22 2011

How to get petrol prices down!

Early in 2010 someone suggested we should boycott petrol stations with a regular ‘not buying petrol’ day as a way of forcing suppliers to reduce the prices. More recently there’s been hints of a campaign to boycott the two largest suppliers i.e. Esso and BP and buy from someone else but this is naive at best.

In the first instance, oil companies do not drill for petrol they drill for oil, bit of a give-away in the name! Petrol is what’s left after all the good bits have been drawn off and oil goes into the manufacture of far more than petrol. For example, Ammonia, Anaesthetics, Antihistamines, Artificial limbs, Artificial Turf, Antiseptics, Aspirin, Auto Parts and Awnings are all made from oil! All of these products have higher profit margins than petrol which is only profitable when sold in high volume.

Secondly, there are literally hundreds of refineries throughout the world most of which people have probably never heard of i.e. Silver Eagle Refining Inc., Wyoming. They’re one of the top 140 in the US, wonder where their petrol goes? Most of the BP stations are not actually owned by BP but are small businesses in their own right. BP petrol has a few additives that make it the brand BP but these are often not put in until the last moment so that the ‘raw’ petrol could be sold to someone else such as Asda or Texaco. Yes, oil companies buy from each other! Outlets such as Asda, Sainsbury and Tesco might buy petrol from several suppliers so you’ll never know whose petrol they are selling today.

If you stop buying BP petrol they’ll simply sell it to someone else and you’ll get it at Asda or one of thousands of other outlets.

The ONLY way you can lower the cost of petrol is reduce the amount used. Lowering the demand will push the price down.

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