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justthisbloke

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Everything posted by justthisbloke

  1. As parent you get first dibs on indoctrinating the kids (until the state does something about that as well)! Mine are properly brainwashed into HPC ways. They always use cash, won't touch debt, query the value of university, and are achieving savings rates of over 80%. Their peers and pals, OTOH, are a disaster zone. Would sell their grandmothers to Big Brother if it made for a more convenient payment mechanism.
  2. Yeah - but if you'd stuck your wonga in one of those accounts - how long would the rate have lasted and what would you be getting now? IME, if you don't keep alert, your previously "high interest" account will change to 0.00000001% as soon as you turn your back. And these days with AML and KYC, it's a thorough pain in the **** to move money around.
  3. One of the advantages of holding equities is that it's less hassle than trying to keep on top of savings accounts. I've got shares that I bought two decades ago - and all I've had to do is collect the dividends. If I'd opened "market leading" bank accounts 20 years ago and just sat back, the only person to have done well would be the bank!
  4. Liberty and privacy are threats to the power of the state. When coupled with the tax dodging potential that cash brings, it's easy to see why those who want an all powerful state are so anti-cash.
  5. Anyone who remembers the pre-AST rental market will say the 88 Act was a Good Thing. Prior to the Act there was barely any legal rental market. People rented but it was grey and dodgy and landlords were even more unpleasant than the current mob. I don't think it was even the banks willingness to lend that created the nightmare we see today. In the natural course of things, reckless lending would have eventually reaped its own whirlwind. No, the blame must lie squarely with the government - the combination of bailing out reckless banks, a low interest policy, inflated Housing Benefit, and the HTBx schemes are what has turned a minor bubble into a structural disaster.
  6. Cost you £95k but I'll bet being debt-free saved you from some sleepless nights. Well, it would me. Moving into an even more speculative, soft-issue realm: did it even cost you £95k? Did being a filthy renter and needing an unconventional Plan B (rather than the usual middle class mortgage-work-pension-with-side-order-of-school-fees story) influence the path you chose and that has resulted in a FIRE-size pot of loot?
  7. The best credit score to have is a trashed credit score, IMO. Being able to borrow money just enables you to borrow money - horrible. I know someone will pipe up and say "but...but...but...mortgage to buy a house" - to which my response is "save up - like JoeD". Re: registered addresses - when Mrs JTB and I were toying with becoming itinerant boaties on the high seas (we she chickened out) we looked into this. You can work around it for most things - PO Boxes, mates/family, boatmail et al. Those will work for insurance/driving licence primarily because no one ever checks and it's *probably* legal anyway. My worry was investments - I had a vision of being addressless and trying to prove I was indeed the owner of all my lovely wonga.
  8. What I've read so far is a good read. Now, I'm no motor expert or car mechanic but are self-tapping screws through the bodywork really considered acceptable workmanship? And where he makes holes for wires and ventilation, shouldn't he be doing some rust prevention after he's hacked through?
  9. I'm eight months into my post-work FIRE life. If I snuff it tomorrow, every day of those eight months of total freedom and independence more than compensates for tat foregone. Equally, I'll go knowing that my wife and children will be financially OK. People sometimes see the FIRE road as an exercise in delayed gratification but it never felt that way to me. It's very gratifying to have money in the bank.
  10. And that's the problem with directly held property - minimum investment of £200k required. So most people aren't going to have a big enough pot for this to be part of a balanced and diversified portfolio. And even if they have sufficient wonga that £200k is, say, 15% of their pot then they still cannot be diversified - they've bought one house in one location. It's like your equity allocation being a single holding in a single AIM stock with a single factory and dependent on a single local market. Of course, lack of diversification is just one of the (many) problems with directly held property - even as a pure investment and without borrowing to totally screw you up.
  11. Most people are idiots. Why on earth is it a "bad thing" if prices are lower because a company understands its tax obligations? Most of the savings are being made by people who need the money. Need the money for rent, their children, heating bills - that sort of thing. Or maybe some people think that paying tax is a means of "doing good". Well, it's a very poor means.
  12. You're kidding me? They've had so much cash out of me over the years it makes me weep. And it's not even as if great or even good things have been attempted, let alone achieved. My taxes have funded pointless bloody wars, a benefit system that will crucify the economy and the poorest in it, and the vanity projects of vacuous politicians. From now on, I retain ownership of my money. If I want to "do good" (which I do), I do so directly. Every £100 of donation I make to one of our local charities (a hospice, a youth club, a generic village trust) gets spent on doing good as I intended. Not a penny gets diverted to wrecking the economy. Not a penny gets spent on interest or debt. And not a penny is used to kill people.
  13. I've just come back from my almost daily shopping run. A quick internet shop to see what's cheap where, call in at a couple of supermarkets, the greengrocer and some roadside stalls and back home. Actually, it's just an excuse to get out for a couple of hours cycling every day - I doubt I save that much compared with paying for a £1 midday delivery slot from ASDA!
  14. Ditto. Age 45 for me. Towards the end, I was paying more in tax than the sum total of *all other expenses*[1]. What sort of muppet do they take me for? Mrs JTB works - mainly for her sanity rather than cash - and with judicious use of a SIPP, we should be able to get the household income tax bill to zeroish. The status anxiety of the middle classes has always been their Achilles' heel that keeps them enslaved. I doubt that'll change. [1] Admittedly, I live cheap. Which is the only respectable exit strategy, IMO.
  15. Trouble is there are so many unknown unknowns that it's very hard to model - even if you know what you want! Much as I like the diversification of having an income stream that is different to equities, I also like the idea of knowing exactly what I hold. Currently, I'm promised (lets say) £20k pa when I'm 64. Rising with inflation (capped at 5% for the majority of that income, 2.5% for some). Mrs JTB gets 50% of that whenever I snuff it - whether in drawdown or deferment. You know, I'm happy with that. I'm not out to try and max every penny - I'll trade gain for security. But what are those promises worth? If the pension review changes the inflation rates, I lose shedloads - we're 45 ish so are counting on lots of inflation protection even before starting drawdown. Wouldn't prudence suggest taking the capital sum that I can see, hold, monitor, and manage? I'm waiting for the capital sum quote. Every man has his price. But, to be honest, calculating what my price is has proved utterly beyond me. I've read a lot of "wish I could afford one's" blog - he seems like a man at a similar stage in life to myself. IIRC, he's just declared himself FI although he hasn't pulled the trigger on the job yet. I'm slightly ahead of him on that - I've been an unemployed layabout since Christmas. Currently living off divis for basic living costs + Mrs JTB's part time income for the bunce in life.
  16. Can you elaborate on that? I know a couple of millionaire (no kidding) tax credit queens and I'd like to know if there's anything like a come uppance around the corner. Edit: only changes on income sources - I understand the rent but cocked up the post.
  17. The nuclear option is for the middle classes to do nothing. It's the middle class that keep "the system" functional. Not just through the roles they play in management, in professions, in government but also via their central function as the financial beasts of burden who pay the taxes. The pooe don't pay tax. The rich are few in number and to varying degrees tax is optional (they can always take the bus t'Malta, for example). So it's the middle classes who keep the whole edifice together both through their jobs and their self assessment cheques.
  18. In markets, no one decrees anything. That's the point. There are two reasons, the economists think, that money makes money. Firstly, "time value of money". People seem, understandably IMO, to value money today more highly than money in a year's time. If you have £100 and lend it to Joe Bloggs, most people would want to see £102 returned in a year's time as pure compensation for losing the liquidity for a year - even if the payback is 100% guaranteed. The second reason is compensation for risk. In reality, there's no guarantee you'll get anything back - so most people demand a promise of a little more to be paid back to cover that risk. The value of that risk compensation will vary depending on the risk - so lending to a sound fellow with a track record of repayment and loads of assets of his own would see a lower risk premium than lending to some fly by night chancer you've only just met down the pub. Those are the economic theories. But there's no decree - everyone is able to strike whatever bargains they fancy. And I'm sure there are some people who, for whatever reasons, lend a tenner but ask only for a fiver to be repayed. It's their money, after all and they can do as they wish - spend it on Cheese Strings and prostitutes or lend at whatever rates they fancy. But at a population level, the tendency for people to demand the time value of money and to be compensated for risk show through on the average. Hence the popular phrase "money makes money". And money, well paper money, does decay. Cash is an investment that is guaranteed to lose you money. Hence why people are incentivised to lend it and see the returns outlined above. This is good for an economy as lending means business can grow, people can be employed, etc, etc.
  19. My dilemma exactly. I've asked for a transfer value (and am still waiting - they're probably trying to find a calculator with more zeroes). This deferred DB is a long way from being my total investments - I have other wrapped and unwrapped stuff - but it's still a chunk of money I'll be counting on at some point. On the one hand, leaving it to run in the DB scheme gives me a sort of asset diversification. And the promises are sweet; annual rises plus a pension for Mrs JTB should I kick the bucket first. Nice. OTOH, how safe is it really? The govt have already moved goalposts and seem to want to do so again with another pensions review. And then there's the fund/company risk - which looks OK for now but who knows? Maybe I should transfer it out and buy shares in pension-beknighted companies. If the review relieves them of some of their burden and divis/SP rises accordingly, I'll be quids in! I'll probably do nothing. Tends to be my investment strategy: sloth.
  20. That's certainly the Mark Alexander / 118 line. Costs drive prices. I'm not so sure. It's not the case in other markets and I don't see why the housing market is any different. There's certainly a substitution effect between renting and buying but I'm not convinced prices drive rents.
  21. I see high house prices as a result of (1) constrained supply combined with the larger impact of (2) easy lending and low interest rates. Addressing (1) would act to reduce both rents and prices. But (2) is, IMO, the real driver behind high house prices. And it's (2) which causes the wider economic damage. Lending is only easy and cheap if it's for houses (unproductive economically) rather than for businesses (productive economically).
  22. Is (2) accurate? To what extent do high house prices create higher rents? For a given housing stock, if an owner (or putative owner) rents then that frees up a house to either be sold to an OO (lowering house prices) or to be rented (balancing the supply v demand for rentals). Rents, surely, are set by the wages/benefits of renters v the supply of rental properties. Costs on the supply side (house prices, interest rates, etc) shouldn't change the rental market. In fact, it's more likely to be the other way round - high rents create high prices; just like other assets.
  23. The focus in the OP quote seems to be more a concern about tenant behaviour than about landlord standards. I'd be interested to know (well, not that interested - I can't be bothered to google) how a tenant's rights are protected and what is contracted away.
  24. Quite. I'm not on HPC out of missed-the-boat jealousy either - I own property. And that's "own" as in "own", not "own" as in "owe", Mark. In fact, I wonder who actually owns more property - Mark A, or the average HPC-er. I'm on HPC for several reasons. The first was as a refuge from office BTL mania. Just like the dot com malarky, I found I was the only one with a calculator, a history book on finance and bubbles, and a brain. HPC provided a forum of similarly sane people. You need this sort of anchor to survive bubbles - the buyers at top are always the most risk averse, the most logical and rational, and the biggest losers. It's a psychology thing. My second reason is that I started to see the damage that BTL was doing. Damage to my children's prospects. Damage to the economy. And, my particular hobby/interest, damage to the appearance of our streets and the urban fabric of our towns.
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