Inflation falls to 2.4%

chucknorris

ILW wrote: »

So is saving now considered imprudent?

Would you say a sixty year old putting their life savings into a basic savings account is being imprudent?

Or should it be be put into risky investments with a chance of losing the lot.

Balanced portfolios?

EDIT: This is mine, not perfect by any means:

23% cash
7% shares
11% pension
59% property

I want to boost shares and pension and lose cash, property is falling over time, so happy to leave, but must admit I am tempted to buy another.

ILW

chucknorris wrote: »

Balanced portfolios?

EDIT: This is mine, not perfect by any means:

23% cash
7% shares
11% pension
59% property

I want to boost shares and pension and lose cash, property is falling over time, so happy to leave, but must admit I am tempted to buy another.

You are not exactly the average investor though.
The vast majority are lucky to have a few 10s of thousands they have saved up and would like a small return. These are the people being hammered.
Very few are in a position to say"I may buy another property or two".

wotsthat

ILW wrote: »

Would you say a sixty year old putting their life savings into a basic savings account is being imprudent?

Or should it be be put into risky investments with a chance of losing the lot.

Come on - you're one of the sensible people on here.

Both of your examples are entirely imprudent.

Generali

chucknorris wrote: »

Balanced portfolios?

EDIT: This is mine, not perfect by any means:

23% cash
7% shares
11% pension
59% property

I want to boost shares and pension and lose cash, property is falling over time, so happy to leave, but must admit I am tempted to buy another.

Unless you're pretty old you are very short shares and very long cash IMHO.

I'm a bit circumspect about pensions. They're hard to move and a very tempting target for greedy Chancellors as Mr Brown showed us.

ILW

wotsthat wrote: »

Come on - you're one of the sensible people on here.

Both of your examples are entirely imprudent.

True
It does appear that taking out an IO mortgage for as much as you could get your hands on would have been the sensible thing to do. The BoE, government, etc will bend over backwards to make sure you do OK.

chucknorris

Generali wrote: »

Unless you're pretty old you are very short shares and very long cash IMHO.

I'm a bit circumspect about pensions. They're hard to move and a very tempting target for greedy Chancellors as Mr Brown showed us.

I'm (only?) 55. Yes my share/cash position is quite annoying, the recent rise in the ftse really caught me out dithering and I feel quite foolish now.

I'm a recent covert to pensions, previously I avoided them like the plague, but when I started lecturing I had the opportunity to pay into the teachers pension fund where I am buying the max additional pension allowed. But I will only get up to about 18k of pension (excluding the state pension). But I might take a sipp out in the form of a ftse tracker which would kill two birds with one stone. But I do share your concerns over private pensions.

My cash isn't doing too badly overall (long term bonds) but I do accept cash is a bad place for me to be. But I will be possibly using up to 150k of it extending my house next year and I also have about 125k of mortgage on my investment properties which is not tax deductable, so when my mortgage rate goes back to normal from 1% I could pay that off. Between the 2 that gets rid of most of my current non ISA cash.

chucknorris

ILW wrote: »

You are not exactly the average investor though.
The vast majority are lucky to have a few 10s of thousands they have saved up and would like a small return. These are the people being hammered.
Very few are in a position to say"I may buy another property or two".

Yes but you can still have a balanced portfolio on a lesser scale.

Graham_Devon

Bloody hell chuck....150k on an extension!?

Were in different worlds!

I guess sometimes it's neccesary to relfect on this kind of thing, as obviously everyone will see differently depending on their position.

wotsthat

ILW wrote: »

It does appear that taking out an IO mortgage for as much as you could get your hands on would have been the sensible thing to do. The BoE, government, etc will bend over backwards to make sure you do OK.

I know someone near Belfast that bought IO and is in negative equity to the tune of £40k. They don't want to live there anymore but can't sell for an amount that would clear the mortgage and haven't got £40k to clear the shortfall.

They don't think they were sensible or prudent, I don't and I'm pretty sure you don't either.

ILW

wotsthat wrote: »

I know someone near Belfast that bought IO and is in negative equity to the tune of £40k. They don't want to live there anymore but can't sell for an amount that would clear the mortgage and haven't got £40k to clear the shortfall.

They don't think they were sensible or prudent, I don't and I'm pretty sure you don't either.

My point was more a reflection of Hamishes view that the defivition of prudence was "if it works out your favour".