Threads we think could be moved to the Early Retirement Board

PeacefulWaters

Thrugelmir wrote: »

What's the FTSE down in the past month?

I don't know.

I do know adjustments to the world markets mean, if not recovered, that I'm working for an extra six months! Twelve months if the falls double!

jamesd

There are no threads that I think could be usefully moved from this board to the proposed sub-board. I can think of some candidates but think that moving them would be harmful and my inclination would be to restart them in the main board where they could do more good.

Personally I'm not in favour of moving the majority of retirement planning content to a sub-board because it's pretty fundamental to retirement planning and core to the motivation for making pension contributions in the first place.

However, there is a notable difference between this board and the MFW board: a focus on individual diaries. I do think that putting that content in a sub-board would be useful and appropriate. This is partly because the frequency of updates could tend to overwhelm the main pensions, annuities and retirement planning board.

I'm also very concerned that the poor financial decisions often made in the MFW section would be carried over to the proposed board, notably the focus on the generally poor investment decision to overpay on a mortgage and seriously harm achieving both FI and early retirement targets as early as they could otherwise be achieved. One of the great strengths of this board is its focus on efficient long term investing.

Of course none of this means that I'm in any way opposed to FI or early retirement since I was very committed to getting to my base FI target and got there in about eight years, all of it during the period while I've been posting here at MSE.

jamesd

gallygirl wrote: »

Pensions, Annuities & Retirement Planning is the title, you're right Jez. But personally I've always seen it as a board for pension and annuities. I don't read every post, but people coming on to say they are/have retired early are usually reporting on what they HAVE done rather than looking for info on what they could do.

I routinely post replies to people seeking guidance on retirement planning, particularly the question of how much to put into pensions or other retirement planning investments, like ISAs. It's core to the topic since without a clue about what you want as a retirement income and when you can't effectively have an investment plan because you don't know how much you need to fund it with.

gallygirl wrote: »

Also I think Pensions and Annuities automatically makes people think of retiring at or around pension age (or at least once their first pension kicks in) whereas a lot of us are planning on retiring quite a bit before that .

You must not be hanging around in this section much. A high proportion of the content is about considerations far before reaching state pension age or the NRA of a work pension.

gallygirl wrote: »

Personally I'd call the sub-board 'Working Towards Financial Independence' - not everyone will actually want to retire early but being able to if you wish, or not being worried the axe will fall over your head, is very different to the more usual retirement planning.

I do not agree that it is very different to the more usual retirement planning. It is inevitable that achieving a retirement target must also mean achieving an FI target and achieving FI capability is a core step in retirement and early retirement planning.

jamesd

nicknameless wrote: »

As already pointed out there will probably be some interesting discussions with people posting from the MFWB board along the lines of "why have you wasted all that opportunity overpaying the mortgage at the expense of other retirement planning vehicles?"

I have read the MFWB and IMHO it should be that board that has a 'rounded' sub forum focused on maximising personal wealth / reaching financial independence / retirement planning, or whatever incarnation, as a way of stimulating thought beyond the overpaying obsession?

Sadly the core focus of the MFW board is on overpaying a mortgage even though that is poor financial planning for retirement. I don't think a sub-board of that section would be useful because it would probably do more harm than good.

FI would fit better in the main Pensions, Annuities and Retirement Planning board since FI is a key step to plan for and reach along the way to deliberate retirement.

jamesd

gallygirl wrote: »

I raised the possibility of a separate board for financial independence with a view to retiring early and MSE have said yes

So someone who seems to have missed all of the critical and common long term planning content here have proposed stripping out the core planning content, didn't even discuss it with the people who are in this section doing it day to day and MSE were foolish enough to agree also without taking the trouble to discuss it either?

Lets just say that I'm very unimpressed with all involved in the proposal to strip out the core of retirement planing into a sub-board.

jamesd

Thrugelmir wrote: »

What's the FTSE down in the past month?

7.3%, ignoring dividends. Now notice from the bottom of this post that a person using equities from 1945 to 2013 would have had 23 times as much money as using cash.

It's also worth noting that the FTSE has a strong bias towards natural resources companies including oil producers and hence has suffered disproportionately from the oil price drop. It's one reason to prefer a global fund over a UK one for core investment holdings. An oil price drop is a good thing in general, but not so much for the FTSE with its bias.

Thrugelmir wrote: »

Assumption is a dangerous game.

So is short-termism on plans that typically last decades and have to provide an income for many more decades.

Pick a month and make an equity-based investment. Here are your historic chances of having beaten cash, first percentage, or gilts, closer to mortgage rates, the second:

2 years: 67%, 68%
5 years: 74%, 73%
10 years: 90%, 79%
18 years: 99%, 88%

Source for these is the 2013 Equity Gilt Study, page 77. And of course each month is a new period so you end up with a more positive overall picture than even those numbers.

It's really easy when it comes to either FI or retirement planning: invest or lose out big-time. Not impossible with sufficient effort to achieve objectives anyway but there's no need to do it the hard way. As illustrated by these values for £100 invested at the end of 1990 in 2013 from page 79 of the study:

Equities: £614 nominal, £324 real
Gilts: £696 nominal, £366 real
Index-linked gilts: £504 nominal, £266 real

Also worth noting the bull market in bonds/gilts during this period. Don't expect that to be repeated any time soon. Sadly that lacked a cash figure, so here's something for investing from 1945 on the same page, also for £100 starting value:

Equities: £147,384 nominal, £4,379 real
Gilts: £7,078 nominal, £210 real
Cash: £6,215 nominal, £185 real

Use equities or wonder why you're doing so poorly compared to those who do.

jamesd

The original proposal is in New forum for 'Financial Independence'? over in the site feedback section. Unsurprisingly there seem to have been no responses by anyone who regularly uses this section about the idea of stripping out the key content that gives it its purpose: accumulating enough to live on independently of a conventional job. At least until the post I just made over there.

edinburgher

Jamesd, I agree that it's reasonable to consult forum users who are already having the discussions, this would appear to be a bit of a fumble by the forum team.

I had hoped that they would go for a FI board specifically (as opposed to early retirement per se), which could have been a very different beast.

It maybe comes across as a bit too enthusiastic and American personal finance blog, but I think there is a small but growing group with an interest in achieving this lofty goal through a combination of spending restraint, mortgage reduction, savings exuberance and investment planning.

I for one couldn't see how this would have worked well on the existing boards. I am personally 27+ years away from 'official' retirement, I doubt my planning resembles that of someone in their 40s or 50s.

Here's hoping that the always helpful forumites from the existing boards and sub-boards opt to spend some time on the new sub-board :T

atush

Thrugelmir wrote: »

Perhaps its part of a longer term correction. Japanese stagnation has lasted 25 years now. Credit growth was the root cause of the over valuation of the Nikkei.

and people have been talking about Britain becomming another Japan for over 5 years now. And it hasn't happened yet.

I do agree we wont really see boom times like in the past, esp before the BOA controlled interest rates and politicians did.

Karmacat

jamesd wrote: »

So someone who seems to have missed all of the critical and common long term planning content here have proposed stripping out the core planning content, didn't even discuss it with the people who are in this section doing it day to day and MSE were foolish enough to agree also without taking the trouble to discuss it either?

Lets just say that I'm very unimpressed with all involved in the proposal to strip out the core of retirement planing into a sub-board.

edinburgher wrote: »

Jamesd, I agree that it's reasonable to consult forum users who are already having the discussions, this would appear to be a bit of a fumble by the forum team.

I had hoped that they would go for a FI board specifically (as opposed to early retirement per se), which could have been a very different beast.

It maybe comes across as a bit too enthusiastic and American personal finance blog, but I think there is a small but growing group with an interest in achieving this lofty goal through a combination of spending restraint, mortgage reduction, savings exuberance and investment planning.

Here's hoping that the always helpful forumites from the existing boards and sub-boards opt to spend some time on the new sub-board :T

I'm a fan, with edinburgher, of a new sub board, but I agree in hindsight that the decision for it has been reached very hastily, without consultation about where it belongs I remember other sub-boards being established, notably the diaries in dfw, and it took months, maybe years.

I hope it wouldn't take that long, and I hope it wouldn't strip out the regular information and threads from the board where its situated, I wouldn't want it to impoverish its 'mother' board, absolutely not.