Financed lifestyles

[GT03ROB]

anonymous said:

[redacted]

They don't need to be it's easy to come up with that & I don't think he's far out

[Blacksquid]

rockin said:

Specifically on pensions, it's worth remembering there's a current generation of private sector workers who have paid for NOT ONLY their parents pensions - through NI contributions which are immediately spent by the government - BUT ALSO for their own pensions through contributions to funded, defined contribution pension schemes.

I just don't get this at all. I've just retired from a lifetime working in the private sector and all my life I paid NI and made pension contributions. So has virtually everyone else who had a job. All through my younger years I was paying for the costs of older people, this is how it works in many countries. What's more, for far too many years to make ends meet we never went on holidays abroad, never bought coffee out, ran very old cars etc.

[wisbech]

anonymous said:

[redacted]

You’ll be surprised at what comes up at ‘water cooler’ conversations.

[brickwall]

anonymous said:

[redacted]

I mean, obviously I’m generalising and guessing. Every individual situation will be different etc etc

But you do generally have a good idea
- the rough pay level of a role
- how much houses, cars, school fees etc cost
- and we do talk about what spouses do for a living, how many kids we have, etc.

So it’s not hard to draw some broad inferences.

[wisbech]

brickwall said:

I mean, obviously I’m generalising and guessing. Every individual situation will be different etc etc

But you do generally have a good idea
- the rough pay level of a role
- how much houses, cars, school fees etc cost
- and we do talk about what spouses do for a living, how many kids we have, etc.

So it’s not hard to draw some broad inferences.

I know here in Singapore quite a few expats in my old firm are returning to Europe. Yes, tax is lower but you get very little for that tax - and for those with kids, they are are better off ‘back home’

The company doesn’t mind, we replaced them with Indians on the same contracts.

[Grrbang]

Blacksquid said:

What's more, for far too many years to make ends meet we never went on holidays abroad, never bought coffee out, ran very old cars etc.

Are you now able to have holidays and a newer car without worries?

Foreign holidays and newer cars always turn out so much more expensive than predicted. I remember blowing a third of my city break budget on the airport taxi, as the shuttle wasn’t running.

I did the same as you over the last 10 years, aside from a few uk city breaks, and it was so effective minimising mortgage ltv and interest. Now looking at a big holiday next summer.

All of my colleagues go on a foreign holiday at least twice a year, the childless grads even more than that. They always ask where I’m going on hols, and the answer ‘staying local’ seems not to compute - they look surprised then sympathetic!

[romeogolf]

Dr Jekyll said:

I knew someone years ago who ended every month with a £200 overdraft and insisted the only way he could ever stay in the black was if he had an extra £200 a month. We all told him that he only needed £200 once but no, he was convinced that wouldn't work.

I had an identical conversation with a friend at university who lived at the bottom of his student overdraft. I didn't have one and he couldn't understand why not. I explained, as you did, that you only need to save up the sum of your overdraft once - Get yourself to zero and treat it as the bottom of the bowl; Not the -£700 he had instead. He just couldn't wrap his mind around it.

[NickCQ]

anonymous said:

[redacted]

1. Usually the wives don’t work
2. Often the property buying chat is trailed heavily and discussed every which way (particularly I have found in financial-type workplaces)
3. You usually know how many kids your colleagues have and what ages - similar categories of schools cost the same amount

I would say educated guess rather than wild assumption.

[anonymous-user]

brickwall said:

Oh I’ve seen it.

You do the maths and realise they must be spending every penny of the basic salary (or more), and relying on the bonus for any savings/buffer or large expenses.

Say £250k basic (so £140k net), with £150-250k bonus.

Then spending:
Mortgage £40k
PCP car payments £15k
Other house costs (utilities, tax, cleaning, repairs etc.) £15k
School fees £40k
Food, clothes, entertainment, general keeping up with the Joneses ‘life’, etc. £30k
Total £140k

Before holidays, savings, etc. All fine when you include the bonus.

But then there’s a bad year, and bonuses are cancelled...

Oh and hardly any AVCs going into pension, so there’s an almighty shock coming down the tracks there too.

There’s not much value in AVCs at that income level.

[brickwall]

anonymous said:

[redacted]

I’m not sure what “some kind of rep” is, but I’m pretty sure I’m not one.

And yes my AVCs point was misplaced - should have said “DC pension scheme alone unlikely to give halfway decent income replacement in retirement”.

But we digress.