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    • edinburgher
    • By edinburgher 2nd May 14, 3:58 PM
    • 10,799Posts
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    edinburgher
    Only freedom will do
    • #1
    • 2nd May 14, 3:58 PM
    Only freedom will do 2nd May 14 at 3:58 PM
    It has come to my attention that I have been here for a very long time

    I joined these forums in a dim and distant past, where money was my enemy and the weight of my student debts left me crushed and panicked, unable to picture a future where I would be able to get a debit card (never mind a mortgage).

    5 years later and the milestones of marriage, first home and first car have come and gone. Throughout it all, I have had a creeping feeling that something wasnít quite right. I donít get the world of work, and while Iíve never been unemployed in my adult life, Iíve tried too hard to try my hand at too many things and Iím left feeling like Iím an actor who recognises the play, but does not understand his motivation.

    As some of you will know, I have experienced some real heartache of late. Your messages of support and hope have been so touching and in many cases, I have got more comfort from anonymous individuals who took the time to get in touch than people I know in the Ďrealí world.

    While money would have done nothing to prevent it, the luxury of savings and our hard work over the years meant that we were in a position to make the right decisions and take our time with our next steps. Returning to work has been a real blow and without sounding even more melodramatic, I donít think Iíd realised just how damaging I find the merry-go-round of rote work, office politics and bureaucracy.

    It wonít do, I canít believe that this is as good as it gets and to quote one of my favourite singers ĎWe can always build a world better than thisí.

    From this point on, I plan to dedicate myself to achieving financial independence. Not MFW, but freedom from all the nonsense that we go through to just to pay for a pile of bricks and a few years of leisure at the end of our span.

    Hopefully you can join me for the journey
Page 284
    • Karmacat
    • By Karmacat 26th Jun 17, 10:30 AM
    • 28,322 Posts
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    Karmacat
    Sounds good, Ed. I'm going to be using the merging of Friends Life and Aviva as the get-up-and-go to tweak my pensions, I get the impression that everything's going to come crashing down like a house of cards, the way debt keeps building up

    Innate pessimist, moi? How can you say such a thing
    Save
    Retired August 2016
    • edinburgher
    • By edinburgher 26th Jun 17, 10:42 AM
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    edinburgher
    I get the impression that everything's going to come crashing down like a house of cards, the way debt keeps building up

    Innate pessimist, moi? How can you say such a thing
    Save
    Originally posted by Karmacat
    You are not the only one who thinks that way KC, I thought it fitting that the most recent re-post on the ERE blog is one where Jacob asserts that we're reaching the end of a 70 year cycle and that the cheap fuel/fast growth age is over. He talks about adapting to a low fuel world, not hoarding. That said, the American shale revolution will probably postpone that particular party by a decade or two?

    On a more positive note, it was interesting to see comments from the bank for international settlements saying that QE has had a minimal effect on inflation and that central banks should push ahead with rate rises. So while I agree that debt will no doubt be having some pernicious influence on the economy that we haven't quite figured out yet, I'd be more inclined to expect eternal? stagnation than collapse.

    Edit: He was talking about Kondratiev waves
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 27th Jun 17, 8:30 AM
    • 622 Posts
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    SuperSecretSquirrel
    That's an impressive stooze payoff Ed! £235pm extra income for making good use of someone else's money!

    My pot, at half the size of yours, could return as little as zero a month, or over a million pounds a month... Average luck would see me at just over £20pm.

    Mr Average Luck, busy avoiding leveraged investment, is taking a £97pm hit in opportunity cost. I can live with that for now as it's someone else's money I'm playing with, there would be an even higher opportunity cost to not playing the stooze game at all, so current situation is already an improvement over last month.

    Be interesting to see what the next two years hold. Perhaps I'll start upping the risk while you start to de-risk!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero! :)
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£51,530.12 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £269,388.83 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 18.0%
    • Karmacat
    • By Karmacat 27th Jun 17, 9:33 AM
    • 28,322 Posts
    • 157,688 Thanks
    Karmacat
    Just found that blog entry, Ed - that's very much my thinking, I'm a big proponent in other circles of stopping people thinking that the world is going to end. Though personally, a slow collapse that lasts until 2025 is going to be quite difficult for me, for age-related issues. And, um, global war by 2040? Oops. Though I can see cyber issues coming to be called war, properly, I'm afraid.

    I may have been working on exactly that for my apoca-novel based in a village near to me
    Retired August 2016
    • edinburgher
    • By edinburgher 27th Jun 17, 3:41 PM
    • 10,799 Posts
    • 56,968 Thanks
    edinburgher
    That's an impressive stooze payoff Ed! £235pm extra income for making good use of someone else's money!

    My pot, at half the size of yours, could return as little as zero a month, or over a million pounds a month... Average luck would see me at just over £20pm.

    Mr Average Luck, busy avoiding leveraged investment, is taking a £97pm hit in opportunity cost. I can live with that for now as it's someone else's money I'm playing with
    Originally posted by SuperSecretSquirrel
    Mhhh... if we're talking opportunity costs, I think it's fair to look at like for like comparisons, so your opportunity cost is nearer £200, which is walking around money for most of us

    Unfortunately for me, I'm an inveterate tinkerer and now that I have seen the stoozing gun on the wall, I had to pull the trigger.

    To be honest, I was largely inspired by Mrs E who puts up with a lot in my stumbling progress towards FI. It's a real sacrifice to save 30%+ of gross salaries when one of you works p-t and you have a big (to us) mortgage and childcare. This is my attempt to make it feel a bit less like hard work, I'm probably doing the wrong thing for the right reasons.

    On that front, I have just come out of an interview for a post that would slash my pension costs to 1/6th of their current level for the same provision, so if I'm lucky I'll be able to increase my salary through more conventional means

    Edit: That should be *our* stumbling progress to FI, she's retiring at 48 whether she likes it or not
    Last edited by edinburgher; 27-06-2017 at 3:58 PM.
    • Brodiebobs
    • By Brodiebobs 27th Jun 17, 9:40 PM
    • 755 Posts
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    Brodiebobs
    Interested in the whirlygig Ed, we live on the edge of a valley and v.windy but cant afford/have space for a a 'proper' turbine!
    Addicted to MSE.
    Overpaying mortgage for a better debt free life!
    • edinburgher
    • By edinburgher 27th Jun 17, 9:44 PM
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    edinburgher
    I think I may have caused confusion... a whirlygig!

    • Greying Pilgrim
    • By Greying Pilgrim 27th Jun 17, 9:48 PM
    • 4,011 Posts
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    Greying Pilgrim
    Gosh, I'm out of my depth with terminolgy on your thread Ed - I assumed that 'whirlygig' was a triangular, revolving clothes line.......

    But, what I did drop by to tell you was that finally, finally i have got my act together and invested Baby Greying's birth gift money into a S&S wrapper. At present it's just a pot, sitting in my isa, because I don't want them to have access at 18 to this money (they can have access to other accounts, but this is intended for 'bigger' purchases). Anyway, I've procrastinated for too long, but I've been intending to follow your example and get it done a long-time since. So now I have. THANK YOU for unravelling a little of the financial fog for me, and my family

    Greying X

    Edit: Cross-posted - it was a clothes line!
    'Ich habe genug'

    'I am not in the pursuit of happiness, only in the discovery of joy' - Joyce Grenfell
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 27th Jun 17, 9:50 PM
    • 622 Posts
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    SuperSecretSquirrel
    Good luck with the job! Same provision for one sixth of the cost, wowza, that's either a massive salary or extremely generous employer contributions, or both!! Hope it goes your way!

    Are you saying my opportunity cost is that high because the half sized pot is no excuse? I should be able to increase the size of my stooze pot to match? I'm not sure it's that simple... Tried opening a third no fee BT card and was offered a tiny CL, didn't seem worth the bother. Already have cards from the providers of a couple of the other zero fee BT cards available, so doubt I could get another from either of them. Don't think there's much else available. Maybe I should consider low fee cards not just zero fee cards, see if the math works out, but I have a feeling having opened 3 cards already this month I'd be offered tiny CLs or even outright rejected

    Edit: My first thought regards the whirlygig was some kind of electricity generating windmillamabob, thought it strange that such a substantial investment was mentioned so casually... It clicked a few moments later!
    Last edited by SuperSecretSquirrel; 27-06-2017 at 10:06 PM.

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero! :)
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£51,530.12 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £269,388.83 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 18.0%
    • Brodiebobs
    • By Brodiebobs 27th Jun 17, 9:54 PM
    • 755 Posts
    • 3,219 Thanks
    Brodiebobs
    oh dear... that is what I call that a whirlygig... but no-one knew what i meant.. i was told I was wrong its a rotary airer and a whirleygig is a turbine.

    But appears i was right!
    Last edited by Brodiebobs; 27-06-2017 at 9:58 PM.
    Addicted to MSE.
    Overpaying mortgage for a better debt free life!
    • edinburgher
    • By edinburgher 28th Jun 17, 10:30 AM
    • 10,799 Posts
    • 56,968 Thanks
    edinburgher
    But, what I did drop by to tell you was that finally, finally i have got my act together and invested Baby Greying's birth gift money into a S&S wrapper. At present it's just a pot, sitting in my isa, because I don't want them to have access at 18 to this money (they can have access to other accounts, but this is intended for 'bigger' purchases). Anyway, I've procrastinated for too long, but I've been intending to follow your example and get it done a long-time since. So now I have. THANK YOU for unravelling a little of the financial fog for me, and my family
    Greying X
    Originally posted by Greying Pilgrim
    Did you invest the money in anything esoteric Greying?

    Well done, getting started is almost all of the battle.

    Good luck with the job! Same provision for one sixth of the cost, wowza, that's either a massive salary or extremely generous employer contributions, or both!! Hope it goes your way!
    Are you saying my opportunity cost is that high because the half sized pot is no excuse? I should be able to increase the size of my stooze pot to match? I'm not sure it's that simple... Tried opening a third no fee BT card and was offered a tiny CL, didn't seem worth the bother. Already have cards from the providers of a couple of the other zero fee BT cards available, so doubt I could get another from either of them. Don't think there's much else available. Maybe I should consider low fee cards not just zero fee cards, see if the math works out, but I have a feeling having opened 3 cards already this month I'd be offered tiny CLs or even outright rejected
    Originally posted by SuperSecretSquirrel
    Thanks SSS, I was offered the job

    It comes with membership of the local government pension scheme, so yes, extremely generous contributions. The difference between my current (DC) contribution and the DB contribution is over £600/month

    The downside to all of this is that I won't be able to draw the new pension until 68, so this will change my planning for FI quite a bit. The money freed up will probably be split 3 ways between SIPP, ISA and lifestyle improvements.

    There's a disconnect between how we're thinking about the opportunity costs and it's entirely understandable, because we are individuals with different risk tolerances, circumtances and credit balances.

    I am not saying there is 'no excuse' for the size of your stooze, more that we need to compare like with like if we wish to analyse the respective merits of our stoozing. It's like boasting that your car is faster than your neighbour when you're in a Porsche and he's driving a clapped out Citroen.

    We should probably stop talking about leverage, we're both leveraged (i.e. saving/investing a borrowed sum because we expect the proceeds to exceed the cost of the borrowing). I am perhaps doubly leveraged, because I have thrown the specific risks of my different investment classes into the mix as well.

    We are also both gambling, just in our own ways. I am gambling on an inflation beating real return from a mix of low quality and guaranteed assets and you are gambling on shortfall risk (i.e. if Mr Average Luck doesn't win the million, his expected return will be even lower than the figures you've shown). Personally I wouldn't bother stoozing for average PB return - money transfer cost - interest to point of BT - inflation. Then again, the fact that it's OPM softens the blow a little.
    • Suffolk lass
    • By Suffolk lass 28th Jun 17, 4:27 PM
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    Suffolk lass
    Congratulations but 68!? Oh my. I realise you have SIPP, ISA and other trickles of pension income. Will you consider transferring any of your existing pension pots into the Local Government scheme? or perhaps you prefer to keep them separate - I recall you were in a public sector scheme that was DB that has frozen index-linked accrued benefits, with a reserved right to take it earlier than 68. And there's your DC scheme. And your SIPP (Oh dear, I feel like I am an e-stalker!) - I think I would want to keep them separate so that not all eggs are in one basket.

    I presume you could take an actuarially reduced pension before 68?
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2018 #53 - my annual target is £10,000
    OS Grocery Challenge 2018 budget of £3,500 including stores
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • edinburgher
    • By edinburgher 28th Jun 17, 4:42 PM
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    edinburgher
    You have wonderful recall

    Yes, 68, therein lies the rub of the current offering from the LGPS!

    I have considered transferring in either/both my DC pension and my SIPP, as from memory (the reason my original preserved DB pension is worth a few grand a year), the rates offered were very good. But at that point, the concept of FI was unheard of and my horizon has shifted.

    If I transfer in, I'd get a theoretical NW bump of ££,£££, but there would be no way I could match my income from 68+ earlier on in the retirement cycle. I am sure there would be ways to smooth the income, but by a few years, not for 15 years or so! One basic example would be slow stoozing with as many credit cards as I could lay my hands on, but that would only buy me a couple of years of smoothing. Perhaps moving to a low COLA, but if anything, Mrs E and I will want to live closer to the action in retirement!

    My thoughts at the moment are either transfer it all in, prepare to retire slightly later and chuck everything else I can into SIPPs/cash savings, or keep the DB and the DC separate and miss out on the loaded offer of a hefty NW bump.
    Last edited by edinburgher; 28-06-2017 at 4:44 PM.
    • Suffolk lass
    • By Suffolk lass 28th Jun 17, 5:16 PM
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    Suffolk lass
    Our plan is to each have our DB pensions as our main income stream, and to use Mr Lass's DC pension as top ups between stopping work and drawing his state pension. His DB will be a bit below the Tax threshold so spreading it out over about 4 years will minimise the tax on the taxable part of it.

    I didn't clock the advantages of a SIPP until far too late. I plan to retire in less than two years so an ISA is my favoured option, albeit losing the 40% tax relief (that now sounds pathetic as I write it - I shall have a ponder - pure cutting off my nose to spite my face, as granny used to say!)
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2018 #53 - my annual target is £10,000
    OS Grocery Challenge 2018 budget of £3,500 including stores
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • Greying Pilgrim
    • By Greying Pilgrim 28th Jun 17, 6:34 PM
    • 4,011 Posts
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    Greying Pilgrim
    Did you invest the money in anything esoteric Greying?

    Well done, getting started is almost all of the battle.
    Originally posted by edinburgher
    'Tis funny you should say that ed, because..... erm, no, I didn't The very fact that this money is anywhere near the stock market is out of my comfort zone enough! It's soooooo tempting to stash it all in a cozy, friendlee, neighbourhood building society, with it's oh so tempting interest rate of -0.10% and where they send you a card on your birthday.......................

    Or better yet, in a sock. Under the mattress.



    Thanks for your help

    Greying X
    'Ich habe genug'

    'I am not in the pursuit of happiness, only in the discovery of joy' - Joyce Grenfell
    • edinburgher
    • By edinburgher 28th Jun 17, 9:25 PM
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    edinburgher
    @SL - that sounds sensible

    @Greying - I was joking, honest
    • Karmacat
    • By Karmacat 28th Jun 17, 10:09 PM
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    Karmacat
    Congratulations, Ed! 68 is a bleep, but I bet you find a way to make it work.
    Retired August 2016
    • edinburgher
    • By edinburgher 29th Jun 17, 8:30 AM
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    edinburgher
    Thanks KC - it is a bleep - but all it has done is make my plans a little more conventional.

    Thinking about it in a different light - if I work 'til 50 and then retire I will be guaranteed a minimum income of £20,500 (+ inflation linking) assuming state pensions are still around when I'm a duffer. That's fantastic, no cat food! If I somehow actually worked 'til 68, I'd retire on considerably more money than I earn now!

    I am going to call my current DC provider today and check what their fees are. From memory, it's a very low 0.3% with no additional costs for basic index funds. If they'll let me continue to pay in after leaving my current job, that could save me a bit over the years. Alternatively I could transfer everything into my SIPP, sure they'd be happy to see £35k extra to charge fees on
    • edinburgher
    • By edinburgher 29th Jun 17, 10:02 AM
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    edinburgher
    Mhhh... turns out that the platform charge is 0.4%, higher than I thought. I can transfer out for free.

    So, even allowing for slightly higher charges (say 0.47% for one of the VLS funds if I open a Close Brothers SIPP), I think I'd be better off moving. I'm fairly sure that my L&G funds perform at least 0.07% worse than VLS100! I could also clone VLS with individual funds, perhaps slightly less efficient, but think it can be done for a total charge of something like 0.4%/year including the platform charge?

    I will get transfer values for what would happen if I transfer in to the LGPS, but I don't think I can afford to kill my DC pot. I know £35k isn't a huge sum in the scheme of things, but my perspective changes if I think 'that's 2-3 years of living expenses before my DB pension kicks in'. So my retirement age would be a maximum of 65, with another year off each time I can accumulate £15k or so. That would be a convenient way to think about it for me, roughly £300 before tax for a week of retirement/£232 after tax for each week of freedom.
    Last edited by edinburgher; 29-06-2017 at 10:05 AM.
    • Karmacat
    • By Karmacat 29th Jun 17, 10:04 AM
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    Karmacat
    Of course £35k is a big deal! How hard would you have to work/ how many more years, to make up for that? We celebrate the odd tenner, we certainly want to look after £35k!

    Retired August 2016
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