Hope is not an Effective Financial Strategy

greent

shangaijimmy wrote: »

Gally - afraid to say i've had a look at that, and i'm nowhere near that level of understanding yet!! And when i say nowhere near I mean that may as well be written in Alien code!

Phew! - am glad someone else felt the same - I looked at it last night and then decided there were far too many things to look at and my brain switched off

hiddenshadow wrote: »

You're essentially playing both Time Traveller and Historical Analyst...that site runs through the last 100+ years' worth of stock market data and say "what if the stock market behaved exactly the way it did from [year X] to [year X + retirement length], how would SJ fare?" The bright graphs in the results show each year's data point, e.g. "Year: 1954: Cycle Start Year: 1899: Portolio: -$715,142"...you've lost your house, your neighbours' houses, and can't afford any food (cat or otherwise) ... compare that to "Year: 1988: Cycle Start Year: 1953: Portfolio: $149,935", you have almost £150k to leave to the kids when you die.

In the most basic sense, you really only need to worry about 4 values/areas:

Retirement Year: when you plan to retire (I put in 2039 for your 21 year scenario)
Retirement End Year: when you plan to die (I put in 2075, assuming you might make it to 96!)

Portfolio value: sum of your pension accounts today (real or hypothetical)

Spending Plan: I put in Inflation-Adjusted, with an amount of £30k (so it should assume that your income stays at the same level as £30k today for the length of your retirement)

I find it easiest to fiddle with the portfolio value and see what happens.

For example, if your current pension value is:

£100,000, you have a 1.11% chance of living to 96 sans gutter
£150,000, you have a 26.67% chance of being gutter-free
£200,000, you have a 55.56% of making it
£250,000, you have a 82.22% of succeeding
£300,000, you're golden with a 98.89% chance of success

... I hear you say that you definitely don't have that amount in your pension today! ...

then we move to to the spending plan. You'll be MF so you can tighten your belt.

Income £20,000 instead of £30k, now you've got better odds:
£100,000, you have a 26.67% chance of success!
£150,000, you have a 68.89% chance of being gutter-free
£200,000, you have a 98.89% of making it
£250,000, you have a 100% of succeeding
...same with any higher amounts, obviously....

Yeay! A huge thanks for that from me too Have only input the 4 main variables as above, combining OH's and my pension worth and ignoring our BTL and we have (apparently) a 100% success rate :T - (ok, assuming some other variables would have a negative effect I think we should still be ok overall)

Jimmy - definitely don't underestimate the effect of uni on retirement - our eldest is currently there (2nd year) and our youngest (almost 9) won't finish there (if he goes) until we are 60 :eek::eek: In fact, assuming all 4 of ours go we have a constant run of parental support of at least 1 at uni from now until then, due to no 2 applying to study medicine... :eek:) We do joke about how our friends who stopped after the first 2 (so they are now 20 & 18 ish) can retire much sooner than us (only theoretically - in fact, most still have mortgages so their monthly outgoings are possibly more than ours anyway )
x

shangaijimmy

Greent - the threat of University costs is huge. Poor you on having 4!! Similar to yourselves if our youngest goes, and presuming on a 3yr degree, then she would finish when i am 58. This is a major motivation to clearing the mortgage. If i had to predict now i would say that eldest would be doing something science based (clever boy so far!), our middle is very naturally gifted but is also a whirlwind so could be anything from a mathematician to a demolition expert, and youngest is too early to make assumptions, but knowing our luck it'll be a 7yr medicine degree like yours!! at least we'll have had 2 general elections before eldest is uni age so i'll be voting for anyone that will reduce University costs!!!

themadvix

Thanks from me too Gally and Hidden - lots to look at and process there. Will need to sit down and be horrified by how far behind we are.

All this talk about university costs is making me want to stay child-free!

shangaijimmy

Themadvix - at first the equation results are horrifying, but then when you play around with some scenarios it plays out significantly better. When i had a good think about it i realised how bad it would be if we weren't MFW's. I definitely don't want to be working like this past 60, otherwise i wont get to see any of my pension anyway!

Fresh on the heels of my Easter/new financial year money decisions, today i have gotten £15 to OP from my small change jar. And i have actioned my cash ISA transfer to new S&S. Only £463 but a good start nonetheless. First DD payment will go on 22nd as well. This fund may well be the thing fund that buys us a year before taking our pension pot...

shangaijimmy

Well a morning off work and we have a nice day...sun and blue sky! So whilst the kids are pottering around (recovering from a few days away in caravan) i have took the plunge and done 3 piles of washing! 2 of which should be drying on the line. Since Feb half term i have to admit that we have lost control of the house. We've both had a shockingly busy period at work, coupled with perpetual transfer of that horrid cold and cough throughout the house. So i am determined to get the ball rolling and get at least one room back under control...

shangaijimmy

And in disastrous financial news, Mrs SJ needs some dental work doing and it's in that top banding of costs so £256 :eek: Teeth and cars are conspiring against me at the minute - £441 of extra expenditure :mad:

try_harder

In that first post today i thought i was re reading themadvixs post this morning how funny .

Oh well , that is a lot of money but so much better to take good care of your teeth

greent

shangaijimmy wrote: »

Well a morning off work and we have a nice day...sun and blue sky! So whilst the kids are pottering around (recovering from a few days away in caravan) i have took the plunge and done 3 piles of washing! 2 of which should be drying on the line. Since Feb half term i have to admit that we have lost control of the house. We've both had a shockingly busy period at work, coupled with perpetual transfer of that horrid cold and cough throughout the house. So i am determined to get the ball rolling and get at least one room back under control...

You and me both - not sure ours ever recovered from Xmas - we had DS2's bday first week of the NY and then the following week I was struck down with flu for 3 weeks which rolled into our kitchen refurb, which took up Feb and a small part or March - then a busy bit at work and then Easter hols - the recovery mission is now underway here! (Sooooo much washing and ironing this past week with PE/ sports kits/ items of uniform not washed often (blazers), DD coming back from uni with masses of laundry etc - argh!)

Hopefully the yellow thing in the sky will hang around today for both of us

Karmacat

Wow. I pick today to tell myself I really want to finally get to shanghai jimmy's diary .... and the first half of the page is about spreadsheets **sobs quietly**. I can't build them, not at all. I used to use the matcher spreadsheet, to do matched betting, and that worked. I use spreadsheets to add up the columns for my tax declarations. And thats it

So I was very brave and opened the link Gally gave you.

For *your* actual news - sorry to hear about car and dental - I think there's something dental going around, my teeth are feeling fragile, for some reason, but I'm still hoping :money: But with three little kids, you have a lot more call on your funds than I have on mine.

**Finally** subscribing.

shangaijimmy

try_harder wrote: »

In that first post today i thought i was re reading themadvixs post this morning how funny .

Oh well , that is a lot of money but so much better to take good care of your teeth

Was you thinking great minds think alike, or fools seldom differ :cool:? (Sorry dvixcs)

greent wrote: »

You and me both - not sure ours ever recovered from Xmas - we had DS2's bday first week of the NY and then the following week I was struck down with flu for 3 weeks which rolled into our kitchen refurb, which took up Feb and a small part or March - then a busy bit at work and then Easter hols - the recovery mission is now underway here! (Sooooo much washing and ironing this past week with PE/ sports kits/ items of uniform not washed often (blazers), DD coming back from uni with masses of laundry etc - argh!)

Hopefully the yellow thing in the sky will hang around today for both of us

Our yellow thing is still up there, and thankfully towels are dried and i have replaced with next pile from 'Mount Washmore'!

Karmacat wrote: »

Wow. I pick today to tell myself I really want to finally get to shanghai jimmy's diary .... and the first half of the page is about spreadsheets **sobs quietly**. I can't build them, not at all. I used to use the matcher spreadsheet, to do matched betting, and that worked. I use spreadsheets to add up the columns for my tax declarations. And thats it

So I was very brave and opened the link Gally gave you.

For *your* actual news - sorry to hear about car and dental - I think there's something dental going around, my teeth are feeling fragile, for some reason, but I'm still hoping :money: But with three little kids, you have a lot more call on your funds than I have on mine.

**Finally** subscribing.

Rest assured there's never a good day to start reading my diary! I just hope the presence of spreadsheets hasn't given you a reason to quickly unsubscribe! So welcome aboard, really pleased to see you in here, and i apologise for my ramblings!