I'm 42, No pension, will I die in a puddle of my own S#it
Discussion
Globs said:
audidoody said:
DonkeyApple said:
That is genuinely f
king mental 
Which is exactly how I would describe the current pension industry. How else would you describe the process of handing your money every months for 18 years to a faceless fund manager who has as much chance of beating the markets as you have if you were to stick a bunch of names on a dartboard, blind fold yourself and then invest in whatever the arrows hit? This leaves aside the moot point that said fund manager will help himself to a slice of your money win, lose, or draw followed by HMRC grabbing a whack of whatever is left, assuming the Government of the day hasn't altered the rules so screw you even more.king mental If not the gold, then at least a BTL.
With a bank deposit safe it could work well.
In fact I'm sure it's already being done in large numbers.
My guess is that most of the non physical schemes are Ponzis and that the bid offer spread on re-selling gold that has not been stored securely is so shocking, but no one ever worries out their exit strategy.
Lot's of people sitting on collections of gold painted lead as well.
I think if you were to put £50 a month away into an ISA with a return of 0.5% APR for 30 years, you'd end up with something like £45k.
Put it into a pension giving the same return of 0.5% APR (ifs and buts) and you'd get £55k.
So the tax relief (if you're not higher rate) would add £10k to the pot.
That's a simplistic view of a pension.
ETA
I'm hoping to pay off my mortgage early (£150 a month overpayments) then once that's cleared throw what was my mortgage payment into a pension. Still don't think i'll end up with much of a pot, but it's worth a shot.
Put it into a pension giving the same return of 0.5% APR (ifs and buts) and you'd get £55k.
So the tax relief (if you're not higher rate) would add £10k to the pot.
That's a simplistic view of a pension.
ETA
I'm hoping to pay off my mortgage early (£150 a month overpayments) then once that's cleared throw what was my mortgage payment into a pension. Still don't think i'll end up with much of a pot, but it's worth a shot.
Edited by dirty boy on Monday 14th November 15:16
DonkeyApple said:
It's being done in massive numbers by lots of pensioners who have absolutely no understanding of the market they are investing in or the industry,
How much understanding do you think the average joe has of the pensions industry?Close to none, or none at all?
Gold has always been a good store of wealth, nothing has changed.
DonkeyApple: you make valid points. I would certainly not advocate buying gold you cannot physically own and liquidate at a moment's notice. My scenario assumes safe storage and investing in minted coins of the realm or state, not bars (thus avoiding the yellow-painted lead scenario). Of course you could always replace the monthly gold coin purchase scenario with "bottle of vintage wine", "vintage watch", or "collectible stamp".
The point being that investing in valuable physical assets compared with equities over the long term is now much less 'unthinkable' than it was before 2008, especially when your cash pile is disappearing at a rate of 5% a year.
The point being that investing in valuable physical assets compared with equities over the long term is now much less 'unthinkable' than it was before 2008, especially when your cash pile is disappearing at a rate of 5% a year.
Edited by audidoody on Monday 14th November 15:26
dirty boy said:
I think if you were to put £50 a month away into an ISA with a return of 0.5% APR for 30 years, you'd end up with something like £45k.
Put it into a pension giving the same return of 0.5% APR (ifs and buts) and you'd get £55k.
So the tax relief (if you're not higher rate) would add £10k to the pot.
That's a simplistic view of a pension.
ETA
I'm hoping to pay off my mortgage early (£150 a month overpayments) then once that's cleared throw what was my mortgage payment into a pension. Still don't think i'll end up with much of a pot, but it's worth a shot.
The remaining value that pensions have is that you can claw back your income tax, so your capital investments have a head start.Put it into a pension giving the same return of 0.5% APR (ifs and buts) and you'd get £55k.
So the tax relief (if you're not higher rate) would add £10k to the pot.
That's a simplistic view of a pension.
ETA
I'm hoping to pay off my mortgage early (£150 a month overpayments) then once that's cleared throw what was my mortgage payment into a pension. Still don't think i'll end up with much of a pot, but it's worth a shot.
Edited by dirty boy on Monday 14th November 15:16
The inherant problems with a pension tend to be two main factors, firstly the removal of income relief on dividends which was a huge blow and secondly the massive and criminal fees that can be extracted if people are not extremely prudent about how they invest the money in their pension. If played prudently then the pension wrapper is still an extremely viable savings mechanism. The second factor is also a massive problem with ISAs and should be taken into account when going down that route also.
Paying down the mortgage is nearly always an extremely prudent course of action, especially in current times when income on cash deposits is generally so much lower than the interest charges on typical mortgage debt.
Another good savings mechanism which will yield actual returns and within reason both values and incomes will attempt to keep pace with inflation is second properties. But again, prudence is vital when buying a flat or house to rent and much of the prudence stems from a healthy deposit, low gearing.
In my book a mixture of all three is the most sensible blend for future security.
Globs said:
DonkeyApple said:
It's being done in massive numbers by lots of pensioners who have absolutely no understanding of the market they are investing in or the industry,
How much understanding do you think the average joe has of the pensions industry?Close to none, or none at all?
Gold has always been a good store of wealth, nothing has changed.
At times it has been a practical store of wealth, especially in dynamic situations that see total collapse and a need to move swiftly geographically. But it has never. ever been a sensible choice for actual investment returns. There are periodic windows in history when economic fears have yielded positive returns but the costs of investment and storage and the lack of interim yield mean that gold is a truly terrible form of investment.
audidoody said:
DonkeyApple: you make valid points. I would certainly not advocate buying gold you cannot physically own and liquidate at a moment's notice. My scenario assumes safe storage and investing in minted coins of the realm or state, not bars (thus avoiding the yellow-painted lead scenario). Of course you could always replace the monthly gold coin purchase scenario with "bottle of vintage wine", "vintage watch", or "collectible stamp".
The point being that investing in valuable physical assets compared with equities over the long term is now much less 'unthinkable' than it was before 2008, especially when your cash pile is disappearing at a rate of 5% a year.
The problem with gold coins is that the moment you take physical delivery their value falls. It is a horrible commodity. You pay a premium to purchase from a secure vendor to guarantee that you are in fact buying a legitimate gold coin of full weight, but the moment you hold it in your hand it loses that guarantee and thus its premium.The point being that investing in valuable physical assets compared with equities over the long term is now much less 'unthinkable' than it was before 2008, especially when your cash pile is disappearing at a rate of 5% a year.
Edited by audidoody on Monday 14th November 15:26
This means that the realistic bid and offer of physical gold coins is enormous. It's an instant massive loss of your wealth the moment you make the purchase.
If you hold the coins in secure storage and never see them then you can protect against this but the fees are high and the bid/offer spread when you come to sell are still enormous.
The other thing that many people forget is that if an event ever arises when you actually need gold as a means to transport your wealth then the price for selling is a mere fraction of the market. Just ask any Jew who came to London or NY in the late 30s what prices they recieved for their gold from the jewellers and local traders.
Another classic store of gold wealth is jewelry. Indians try and negate this risk by storing it as bland bracelets but the mark up on gold transformed into jewellry is such that the loss you'll take should you ever need to cash in is catastrophic.
Because it is an unregulated market and we are obsessed by its shininess every bucket shop in the UK is flogging various gold schemes and making a mint. It is all an illusion. For the man in the street in a non 3rd world economy, gold is just about the most useless investment possible. Far worse than a crappy pension.
Very, very crudely, put £1,000 of taxed income into a pension and it is instantly worth £1,250 or even £1,400. Do the same with gold and you'll be lucky to have something worth £750. Gold then won't yield you anything and could infact cost you in annual storage. Your pension investments should at least give you a yield. And finally, neither have any guarantees on capital values.
DonkeyApple said:
In my book a mixture of all three is the most sensible blend for future security.
Realise I've been arguing the pension corner on this thread but essentially totally agree with this.Take advantage of the tax efficiency that pension investments can give, BUT be very careful and buy wisely.
Invest in ISAs and the like enough to secure your low risk access to rainy day cash, but don't go mad because the real value is being eaten away by inflation.
Get rid of debt, as much as and as fast as you can.
Property, especially if there is a healthy and stable rental market demand, but again easy to get fingers badly burnt if you fall for the property porn trap and think you're now a developaahhh! Again care is of the essence.
DonkeyApple said:
The problem with gold coins is that the moment you take physical delivery their value falls. It is a horrible commodity. You pay a premium to purchase from a secure vendor to guarantee that you are in fact buying a legitimate gold coin of full weight, but the moment you hold it in your hand it loses that guarantee and thus its premium.
This means that the realistic bid and offer of physical gold coins is enormous. It's an instant massive loss of your wealth the moment you make the purchase.
If you hold the coins in secure storage and never see them then you can protect against this but the fees are high and the bid/offer spread when you come to sell are still enormous.
The other thing that many people forget is that if an event ever arises when you actually need gold as a means to transport your wealth then the price for selling is a mere fraction of the market. Just ask any Jew who came to London or NY in the
late 30s what prices they recieved for their gold from the jewellers and local traders.
Another classic store of gold wealth is jewelry. Indians try and negate this risk by storing it as bland bracelets but the mark up on gold transformed into jewellry is such that the loss you'll take should you ever need to cash in is catastrophic.
Because it is an unregulated market and we are obsessed by its shininess every bucket shop in the UK is flogging various gold schemes and making a mint. It is all an illusion. For the man in the street in a non 3rd world economy, gold is just about the most useless investment possible. Far worse than a crappy pension.
Very, very crudely, put £1,000 of taxed income into a pension and it is instantly worth £1,250 or even £1,400. Do the same with gold and you'll be lucky to have something worth £750. Gold then won't yield you anything and could infact cost you in annual storage. Your pension investments should at least give you a yield. And finally, neither have any guarantees on capital values.
I hope BillybigbThis means that the realistic bid and offer of physical gold coins is enormous. It's an instant massive loss of your wealth the moment you make the purchase.
If you hold the coins in secure storage and never see them then you can protect against this but the fees are high and the bid/offer spread when you come to sell are still enormous.
The other thing that many people forget is that if an event ever arises when you actually need gold as a means to transport your wealth then the price for selling is a mere fraction of the market. Just ask any Jew who came to London or NY in the
late 30s what prices they recieved for their gold from the jewellers and local traders.
Another classic store of gold wealth is jewelry. Indians try and negate this risk by storing it as bland bracelets but the mark up on gold transformed into jewellry is such that the loss you'll take should you ever need to cash in is catastrophic.
Because it is an unregulated market and we are obsessed by its shininess every bucket shop in the UK is flogging various gold schemes and making a mint. It is all an illusion. For the man in the street in a non 3rd world economy, gold is just about the most useless investment possible. Far worse than a crappy pension.
Very, very crudely, put £1,000 of taxed income into a pension and it is instantly worth £1,250 or even £1,400. Do the same with gold and you'll be lucky to have something worth £750. Gold then won't yield you anything and could infact cost you in annual storage. Your pension investments should at least give you a yield. And finally, neither have any guarantees on capital values.
kss Chim is not reading this ! 
RacerMDR said:
this thread is really depressing!! I'm 36 - have a house that is worth nothing - literally, has gone down in value to the point it would cost me to sell it.
I only started a pension and ISA 2 months ago.........must stop spending money on depreciating assets!!
All you need is a PCP and you have the full set! I only started a pension and ISA 2 months ago.........must stop spending money on depreciating assets!!
RacerMDR said:
this thread is really depressing!! I'm 36 - have a house that is worth nothing - literally, has gone down in value to the point it would cost me to sell it.
I only started a pension and ISA 2 months ago.........must stop spending money on depreciating assets!!
Don't be depressed!I only started a pension and ISA 2 months ago.........must stop spending money on depreciating assets!!
I was a tiny bit younger than you, getting divorced and I then resigned from my very well paid job, started my own business and now 14 years later all bar a few payments I own a large house (near on 7 figures of house), have nice cars, nice holidays, own some commercial property and have 5 wonderful children from 18 months to 22 and a loving wife (new one that is
)You never know what life is going to throw at you, but if I can do it - anyone can
People say paying down the mortage is a good idea but surely if your interest payment is lower than inflation then debt is being eroded (assuming you are making some provision for paying it off) a million quid in twenty years would be around 200k in todays money therfore the inflation would be eroding your debt.
You would have to seek a better return with the money you were saving but in theory this might work??!?
You would have to seek a better return with the money you were saving but in theory this might work??!?
birdcage said:
People say paying down the mortage is a good idea but surely if your interest payment is lower than inflation then debt is being eroded (assuming you are making some provision for paying it off) a million quid in twenty years would be around 200k in todays money therfore the inflation would be eroding your debt.
You would have to seek a better return with the money you were saving but in theory this might work??!?
The real issue is the cost of funding that position over the period and then whether you have any income in 20 years time to pay down the debt. There is also the technical issue that the lender will be demanding settlement instantly upon expiry of the loan period. So, seeing as you need to save up that £1m to have it ready to pay off the loan at the end of the 20 years you might as well pay down to reduce funding than run a separate taxed savings pool.You would have to seek a better return with the money you were saving but in theory this might work??!?
If you are paying 5% interest on £1m then in 20 years you will have paid over £1.5m in funding, I think my very elementary mathmatics ability suggests. And then many peoples' carreers will be entering the winding down period so paying off the original debt is harder in many cases.
I think that generally any man wishing to advance the lot of their family would be prudent to maintain practical property debt exposure and pay this down as swiftly as possible without jeopodising other factors.
HoHoHo said:
RacerMDR said:
this thread is really depressing!! I'm 36 - have a house that is worth nothing - literally, has gone down in value to the point it would cost me to sell it.
I only started a pension and ISA 2 months ago.........must stop spending money on depreciating assets!!
Don't be depressed!I only started a pension and ISA 2 months ago.........must stop spending money on depreciating assets!!
I was a tiny bit younger than you, getting divorced and I then resigned from my very well paid job, started my own business and now 14 years later all bar a few payments I own a large house (near on 7 figures of house), have nice cars, nice holidays, own some commercial property and have 5 wonderful children from 18 months to 22 and a loving wife (new one that is
)You never know what life is going to throw at you, but if I can do it - anyone can
just depressed that at 36 I don't own a nice big fat house! I'm working on it though.........just need to sell the crap negative equity one first and find something that I actually want to live in!
Deva Link said:
Or you could what a fair number of people seem to - convince the older person to sell their house, give one of their children the proceeds and then and move in with them. The child sells their house too and uses the combined sum to buy a bigger house with suitable ground-floor accommodation. Then bides their time until the old person kicks the bucket and doesn't have to contend with sharing the original equity with brothers and sisters.
I know several people who have done this and are in houses that are significantly bigger than they would have owned if they'd not had the additional funds. One of them has council funded carers going in 3 times to look after their elderly mother.
My Grandparents did this. Big victorian townhouse.I know several people who have done this and are in houses that are significantly bigger than they would have owned if they'd not had the additional funds. One of them has council funded carers going in 3 times to look after their elderly mother.
Great Nan had 4 rooms downstairs (kitchen/diner, living room, bedroom and bathroom) and everyone else lived on the 1st and 2nd floor.
RacerMDR said:
ha - love the sign in name. Thanks - i'm cool. I've got my own business, and a proper tidy new bird
just depressed that at 36 I don't own a nice big fat house! I'm working on it though.........just need to sell the crap negative equity one first and find something that I actually want to live in!
My sign in name changed last Christmas to get into the festive spirit - just never bothered changing it back!just depressed that at 36 I don't own a nice big fat house! I'm working on it though.........just need to sell the crap negative equity one first and find something that I actually want to live in!
Glad it's starting to happen - tidy bird helps when you need a bit of R&R
Class thread... 
Like so many on here, I too am beginning to think more about the future and investments etc.
Having had quite a decent paid job (above avg with co. car etc) with (defined cont) pension etc, I decided to go freelance to get a better cash take home pay, just as the financial world appeared to start going to rat st again. I have a few little debts (4k) to pay off by xmas, but hope to start the new year with a bit of an investment plan.
Id like a bit of advice on my situation too, Im 30, and have a flat of my own, mortgage of about 70k, and a value of about the same, taken out at about 115% back in 2006. Im moving out in the new year into a mates rented house, and will be renting out my flat. Strange decision maybe, but i really want a house, drive garage etc, even though it is a couple of hundred quid extra over i dont really need to spend. Decision made on that one. Will overpay on my mortgage once Ive moved out.
Ive got a couple of pension pots from previous employment, worth about 12k each on last update (uh oh!)
Will start 2012 (unsecured)debt free with an idea to invest in a) my flat (overpayments), b) max out the ISA (mix of cash and S&S, unsure of % split) c) a cash savings account to put towards a deposit on a house at some point. Plan to meet a missus at some point too...
Ive lived my twentys by generally spending what I earned on cars, holidays etc and intend for my 30's to be more prudent, although will still live a life worth living.
All a bit scary really, its the unknown unknowns that does it !
Any advice? An IFA I know said to get an aim for retirement age and size of pot and work towards that.
Like so many on here, I too am beginning to think more about the future and investments etc.
Having had quite a decent paid job (above avg with co. car etc) with (defined cont) pension etc, I decided to go freelance to get a better cash take home pay, just as the financial world appeared to start going to rat s
t again. I have a few little debts (4k) to pay off by xmas, but hope to start the new year with a bit of an investment plan.Id like a bit of advice on my situation too, Im 30, and have a flat of my own, mortgage of about 70k, and a value of about the same, taken out at about 115% back in 2006. Im moving out in the new year into a mates rented house, and will be renting out my flat. Strange decision maybe, but i really want a house, drive garage etc, even though it is a couple of hundred quid extra over i dont really need to spend. Decision made on that one. Will overpay on my mortgage once Ive moved out.
Ive got a couple of pension pots from previous employment, worth about 12k each on last update (uh oh!)
Will start 2012 (unsecured)debt free with an idea to invest in a) my flat (overpayments), b) max out the ISA (mix of cash and S&S, unsure of % split) c) a cash savings account to put towards a deposit on a house at some point. Plan to meet a missus at some point too...
Ive lived my twentys by generally spending what I earned on cars, holidays etc and intend for my 30's to be more prudent, although will still live a life worth living.
All a bit scary really, its the unknown unknowns that does it !
Any advice? An IFA I know said to get an aim for retirement age and size of pot and work towards that.
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