Other people's facepalm financial management
Discussion
It really makes me despair when I hear others financial positions. Most people at my current workplace have no pension provision (only auto-enrolled last October) Two cases at work make me cringe, though.
1. Single parent, renting house and always on the 'bread' line. Five years ago got some inheritance. Went on spending spree (new clothes/ electronical goods/ new car/ holiday) and in 12 months time was back to being on the breadline again, living pay-cheque to pay-cheque with a five year old Ford Focus needing work....
2. Couple in mid 50s. Sold their house 3 years ago, having almost paid off mortgage and much equity in it (don't know exact figures). Moved into mobile home, bought for £85k. Bought various electrical goods and new car with the rest of the equity from the house and paid off remaining mortgage. After 18 months, they are told they cannot live permanently on the holiday park (no st, but the salesman who subsequently left said they could - nothing in writing though!!) Holiday park offer them £22k for their 18 month old mobile home, they see no choice and accept (completely unregulated industry, as I checked things out for them.) Move into rented accommodation, having another £22k spending spree decking out rented house and taking entire family on holiday to Florida. No pension provision, a three year old battered Hyundai and various white goods is all that is left.
Arrrrgggghhhhh! Neither of them earns a huge amount either.... but helping them financially is difficult. One has opted out of the workplace pension too.
Mike
1. Single parent, renting house and always on the 'bread' line. Five years ago got some inheritance. Went on spending spree (new clothes/ electronical goods/ new car/ holiday) and in 12 months time was back to being on the breadline again, living pay-cheque to pay-cheque with a five year old Ford Focus needing work....
2. Couple in mid 50s. Sold their house 3 years ago, having almost paid off mortgage and much equity in it (don't know exact figures). Moved into mobile home, bought for £85k. Bought various electrical goods and new car with the rest of the equity from the house and paid off remaining mortgage. After 18 months, they are told they cannot live permanently on the holiday park (no st, but the salesman who subsequently left said they could - nothing in writing though!!) Holiday park offer them £22k for their 18 month old mobile home, they see no choice and accept (completely unregulated industry, as I checked things out for them.) Move into rented accommodation, having another £22k spending spree decking out rented house and taking entire family on holiday to Florida. No pension provision, a three year old battered Hyundai and various white goods is all that is left.
Arrrrgggghhhhh! Neither of them earns a huge amount either.... but helping them financially is difficult. One has opted out of the workplace pension too.
Mike
There's a lot of talk about the gap between rich and poor, and the inequality in society. But I suspect that if we took all the money in the UK and divvied it out equally to everyone tomorrow, in 10 years time 90% of people will be back where they are now.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
TwigtheWonderkid said:
There's a lot of talk about the gap between rich and poor, and the inequality in society. But I suspect that if we took all the money in the UK and divvied it out equally to everyone tomorrow, in 10 years time 90% of people will be back where they are now.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
I'd not considered that before, a very good point.The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
TwigtheWonderkid said:
put it in their suitcase and jetted off to New York for a long weekend to assess their problems!!!
A bit of me quite likes their style. In a "hands over face but squinting out between fingers" kind of way.If I owe the bank £100 and I don't have it, I have a problem. If I owe the bank £100K and I don't have it, the bank has a problem?
TwigtheWonderkid said:
There's a lot of talk about the gap between rich and poor, and the inequality in society. But I suspect that if we took all the money in the UK and divvied it out equally to everyone tomorrow, in 10 years time 90% of people will be back where they are now.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
That binman from Essex who won a few million is a classic case in point. I hear he's a binman, again.
mike9009 said:
It really makes me despair when I hear others financial positions. Most people at my current workplace have no pension provision (only auto-enrolled last October) Two cases at work make me cringe, though.
Mike
similar colleague with my company , he has just joined the pension scheme where the co. pays in 7% as long as you pay in 5% AFTER 10 years employment and only after me nagging him to get his arse into gear.Mike
wtf is wrong with some people?
dingg said:
similar colleague with my company , he has just joined the pension scheme where the co. pays in 7% as long as you pay in 5% AFTER 10 years employment and only after me nagging him to get his arse into gear.
wtf is wrong with some people?
wtf is wrong with some people?
So he's lost out on 10 yrs of 7% free contribution to his pension all because he wouldn't pay in 5% (on which he would have got 20% or 40% tax back anyway).
What a fking moron.
Hoofy said:
TwigtheWonderkid said:
There's a lot of talk about the gap between rich and poor, and the inequality in society. But I suspect that if we took all the money in the UK and divvied it out equally to everyone tomorrow, in 10 years time 90% of people will be back where they are now.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
The idiots would fk up their windfall, and those with above average money would have found a way of getting back what they lost in the divvy up.
That binman from Essex who won a few million is a classic case in point. I hear he's a binman, again.
http://home.bt.com/lifestyle/money/money-tips/real...
The American versions I've seen in other articles tend to go even more off the rails. They are the ideal lottery candidates though, millions buy tickets, government and charities get a cut, the wider economy gets a cut with their spending and they piss it all away.
TwigtheWonderkid said:
So he's lost out on 10 yrs of 7% free contribution to his pension all because he wouldn't pay in 5% (on which he would have got 20% or 40% tax back anyway).
What a fking moron.
yes - I literally had to nag him for about 3 months until he signed up to it.
I just could not/cannot grasp why he hadn't signed up as soon as he joined the co.
emicen said:
He's not alone;
http://home.bt.com/lifestyle/money/money-tips/real...
The American versions I've seen in other articles tend to go even more off the rails. They are the ideal lottery candidates though, millions buy tickets, government and charities get a cut, the wider economy gets a cut with their spending and they piss it all away.
What a wasted opportunity. I think it's even worse than not winning because now you've had a taste of the life you'll never be able to afford again.http://home.bt.com/lifestyle/money/money-tips/real...
The American versions I've seen in other articles tend to go even more off the rails. They are the ideal lottery candidates though, millions buy tickets, government and charities get a cut, the wider economy gets a cut with their spending and they piss it all away.
I guess you're right, though.
BoRED S2upid said:
Hoofy said:
interest only buy to let mortgage
and the "landlords" who are renting a property for less than the repayments! Some people really don't have a clue. The repayment part of a mortgage is a savings choice.
Sure, it is more conservative to do a repayment but at least you aren't INCREASING the debt, just keeping it flat.
In my case it's far more beneficial to syphon off savings into a pension where the govenment add back a huge chunk rather than pay off a very low interest rate mortgage with post-tax money. [/PH Director - obviously!]
Frankly, people who just opt for a repayment mortgage without understanding the savings choice they are making deserve a facepalm!!
dingg said:
TwigtheWonderkid said:
So he's lost out on 10 yrs of 7% free contribution to his pension all because he wouldn't pay in 5% (on which he would have got 20% or 40% tax back anyway).
What a fking moron.
yes - I literally had to nag him for about 3 months until he signed up to it.
I just could not/cannot grasp why he hadn't signed up as soon as he joined the co.
I would suggest that none of you should consider watching "How to get a Council House" on C4. Woman last night couldn't pay £22 a month in rental for a £900 pcm flat and was effectively making herself and her 8 year old homeless. Cut to the 8 year old sitting in the corner fixated by his ipad (or...a years worth of rent)
Northbloke said:
uknick said:
An example of this is when Osborne allowed people to cash in their pension fund so as to generate growth in the economy, albeit temporary.
Agreed. What was he even thinking with that one?There's a real problem with people not saving anywhere near enough for their retirements (so future govts will have to pick up the tab). I know, let them blow some of what little they do have on a car and a holiday.
Bonkers.
As a natural saver it really bugs me that all incentives are biased towards the feckless (e.g. bailouts, no repossessions for political reasons). Is it the absence of moral hazard (or is it the presence of it, not sure which way around!)
Hoofy said:
What a wasted opportunity. I think it's even worse than not winning because now you've had a taste of the life you'll never be able to afford again.
I guess you're right, though.
This is the one I was thinking of;I guess you're right, though.
http://uk.businessinsider.com/lottery-winners-who-...
I think the biggest issue is the notion of a millionaire lifestyle.
If you were to win a UK lottery [rollover] jackpot and bag £5,000,000 or so, the best interest bearing accounts and funds will probably give you 5% on that, so £250k a year.
It sounds a lot, and is, a lot by normal standards. However, its not accounting for inflation eroding the core value and you'd be taxed on it. £15k a month I suspect isn't very hard to piss away when all you have to do in life is spend money with no other foibles like work taking up your time.
Anything under £10m I would still be showing up for work every day. How I arrived at work would be subject to an upgrade and the holiday budget would be seriously improved though.
emicen said:
This is the one I was thinking of;
http://uk.businessinsider.com/lottery-winners-who-...
I think the biggest issue is the notion of a millionaire lifestyle.
If you were to win a UK lottery [rollover] jackpot and bag £5,000,000 or so, the best interest bearing accounts and funds will probably give you 5% on that, so £250k a year.
It sounds a lot, and is, a lot by normal standards. However, its not accounting for inflation eroding the core value and you'd be taxed on it. £15k a month I suspect isn't very hard to piss away when all you have to do in life is spend money with no other foibles like work taking up your time.
Anything under £10m I would still be showing up for work every day. How I arrived at work would be subject to an upgrade and the holiday budget would be seriously improved though.
You've done your sums!http://uk.businessinsider.com/lottery-winners-who-...
I think the biggest issue is the notion of a millionaire lifestyle.
If you were to win a UK lottery [rollover] jackpot and bag £5,000,000 or so, the best interest bearing accounts and funds will probably give you 5% on that, so £250k a year.
It sounds a lot, and is, a lot by normal standards. However, its not accounting for inflation eroding the core value and you'd be taxed on it. £15k a month I suspect isn't very hard to piss away when all you have to do in life is spend money with no other foibles like work taking up your time.
Anything under £10m I would still be showing up for work every day. How I arrived at work would be subject to an upgrade and the holiday budget would be seriously improved though.
If I had £15k a month coming in, my lifestyle would be much better and I certainly wouldn't be working in the traditional sense - I'd still have the drive for running a business so I'd probably really build my charity and put a lot more time into it that I can afford to now.
mike9009 said:
2. Couple in mid 50s. Sold their house 3 years ago, having almost paid off mortgage and much equity in it (don't know exact figures). Moved into mobile home, bought for £85k. Bought various electrical goods and new car with the rest of the equity from the house and paid off remaining mortgage. After 18 months, they are told they cannot live permanently on the holiday park (no st, but the salesman who subsequently left said they could - nothing in writing though!!) Holiday park offer them £22k for their 18 month old mobile home, they see no choice and accept (completely unregulated industry, as I checked things out for them.) Move into rented accommodation, having another £22k spending spree decking out rented house and taking entire family on holiday to Florida. No pension provision, a three year old battered Hyundai and various white goods is all that is left.
Arrrrgggghhhhh! Neither of them earns a huge amount either.... but helping them financially is difficult. One has opted out of the workplace pension too.
Mike
That is very sad indeed - did they have no-one to they could ask some advice?Arrrrgggghhhhh! Neither of them earns a huge amount either.... but helping them financially is difficult. One has opted out of the workplace pension too.
Mike
BoRED S2upid said:
and the "landlords" who are renting a property for less than the repayments! Some people really don't have a clue.
I know a chap who rents out his old home - a really nice and quite expensive apartment. The rental income doesn't cover the cap and int mortgage and he has to put in about 10% a month of it from his pocket. He reasons that in about 10 years the mortgage will be paid off and he'll have bought a really nice and quite expensive flat for a tenth of what he'd have paid ordinarily. He sees his current contribution as savings. I see where he's coming from. It's not that stupid really.
drainbrain said:
BoRED S2upid said:
and the "landlords" who are renting a property for less than the repayments! Some people really don't have a clue.
I know a chap who rents out his old home - a really nice and quite expensive apartment. The rental income doesn't cover the cap and int mortgage and he has to put in about 10% a month of it from his pocket. He reasons that in about 10 years the mortgage will be paid off and he'll have bought a really nice and quite expensive flat for a tenth of what he'd have paid ordinarily. He sees his current contribution as savings. I see where he's coming from. It's not that stupid really.
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