Is it possible to become a millionaire (or near to) through investments?

racing_blue

Was going to make a JS joke but decided no

BananaRepublic

talexuser wrote: »

Not according to these pension experts:
http://www.theguardian.com/money/2016/feb/20/20-million-lose-out-pension-reform

"20 million low paid workers lose out in the new scheme with government saving 8 billion".

The details are rather sparse, and the source is a confirmed anti-Tory newspaper. An example they give is for someone who has worked for 20 years!!! I suspect the headline is hyperbole. They quote Frank Field as approving the broad thrust of the new scheme, but he had concerns. That to me sounds reasonable. It is a shame the Guardian article is so shallow and lacking in detail to back up their claims. I have seen similar anti-Labour 'reporting' in the Toryguff, sorry Telegraph.

The new scheme gives about £8,000 per years based on 35 years working, which is less years than most people work. Even the low paid will get this. The old scheme has a basic amount, which was more like £6,000, with extra based on salary and years contributing. So the middle classes and well paid would have had much more on the old scheme.

But in truth the government is facing an aging population and a spiralling pension bill, and they cannot provide cakes for all forever, as the Guardian would wish. That paper is not known for its pragmatism.

BananaRepublic

bowlhead99 wrote: »

I have some BAESystems shares. They're a UK listed company that manufactures things. In 2005 the shares were £2. Now they're comfortably more than double, ignoring dividends. So if 'capital value alone having doubled in ten years' is criteria for success, there are certainly manufacturing companies which achieved that. My London property has also done OK, though I haven't had it ten years.

I'm still not quite sure why you keep wanting to bring this thread back to Jimmy Savile?

We do make a lot but we found it hard to compete against cheap labour in Vietnam, Thailand, and more recently India. The East Midlands was a big centre for knitwear, but factories were driven out of business by cheap overseas competition. Someone I knew ran a knitwear factory. Last I heard they ran a watersports centre which went bust around 2008. Germany seems to succeed, but they compete on quality, going upmarket.

talexuser

BananaRepublic wrote: »

That paper is not known for its pragmatism.

The figures were worked out by a firm of pension experts, which presumably have a reputation to protect so unlikely to be lying, and frankly more believable than any old posts on an internet forum.

BananaRepublic

talexuser wrote: »

The figures were worked out by a firm of pension experts, which presumably have a reputation to protect so unlikely to be lying, and frankly more believable than any old posts on an internet forum.

Except that the details given by the Guardian are so sparse that we don't know what they looked at, and what assumptions they made. Hence my scepticism.

Glen_Clark

BananaRepublic wrote: »

Germany seems to succeed, but they compete on quality, going upmarket.

The Germans can't understand the British obsession with house prices. The population density of Germany is about the same as Britain, but they have developed about 12% of their land area, wheras Britain has only about 9% developed - despite nimby talk about 'urban sprawl' and 'concreting over all the countryside' By using planning restrictions to reduce supply and taxpayer subsidies to boost demand, the British Establishment has made unproductive property speculation a more lucrative investment than productive manufacturing, drawing investment and talent away from manufacturing into property speculation, which only increases the cost to manufacturers. Despite being a far larger and stronger economy, and not having the defensive advantages of being surrounded by water, Germany also spends a lot less than Britain on its military. Hence Germany has just posted another record surplus, and Britain another record National Debt.

N1AK

Glen_Clark wrote: »

That sounds an optimistic assumption to me - bearing in mind the returns on index linked bonds etc

It would depend on personal opinion and investment mix (though I'd generally agree) but that's probably too long a discussion for here, especially as the exact numbers aren't that critical for the point I was making. Even with more conservative rates you'd expect to see very considerable returns if you are investing for decades.

N1AK

Glen_Clark wrote: »

Why would he have to 'scrutinise' his pay slip to see it? So you think the average guy is more likely to get a vat receipt for everything he buys, more than look at the tax deducted on his pay slip?

I'm inclined to agree with this point. The prices you see for products don't separate out VAT so you'd have to get and check the receipt to find it out, and even then it is almost always done as a total so you wouldn't know which item incurred what rate of VAT. I just checked some of my recent purchases via Amazon and most don't break out VAT; perhaps because the seller wasn't registered and thus pays VAT themselves rather than charging it (which still increases the cost I pay).

planteria

i'm sure we could learn more from Germany, Glen. the Mittelstand has been very important to them, with lots of business continuing to invest and build, exporting, and employing lots of people.
by comparison we have 'Big Business' and 'Small Business', with less in the middle ground:think:
as it happens i also think we could spend less on defence, and the waste within our public services is off the scale compared with that in Germany..
on the plus side, we do have the opportunity for a huge net contribution to the EU to be better deployed dealing with problems here, perhaps even investing in systems which support SMEs.:)

bowlhead99

N1AK wrote: »

I'm inclined to agree with this point. The prices you see for products don't separate out VAT so you'd have to get and check the receipt to find it out, and even then it is almost always done as a total so you wouldn't know which item incurred what rate of VAT.

But basically the whole country knows that vat is 20% of the ex-vat price of most things you buy, except for the things that don't have vat on -like most grocery food (the major exceptions being booze, soft drinks, confectionery, crisps and ice cream), and books, mags, children's clothes. The ones that don't have standard vat on them are usually flagged as such with an asterisk on your supermarket receipt.

The range of things with an intermediate rate of vat on are relatively few and typically not encountered in the weekly shop (eg my bread and milk doesn't appear oh the same invoice as my domestic gas supply or my solar panels or a child car seat). So the only ones that get mixed in at the supermarket are things like nicotine patches or sanitary napkins.

The idea that you have to look at a receipt to see what vat you paid and maybe get the calculator out does not make vat a "stealth tax". By contrast the fact that your receipts always show a VAT number if the seller's registered should remind you "oh yeah, I pay vat on things I buy".

Anyway, at its core, vat is something charged on the value added as "stuff" (goods and services) gets made and sold. The business takes money off you and gives it to the government at the same time as claiming back the vat that they incurred on their inputs. The more value added the greater the tax. So in a sense, that's pretty similar conceptually to corporation tax, or income tax on the profits of a sole trader.

In other words, the person buying the product knows that not all the money that they hand over to a retailer or trader will make it back into the hands of the business owner, because government wants a cut of the value added or the profits made. That's not a stealth tax. Tax rates are public and we all know about them. Does the customer specifically need to know that 10p of the price of a 60p Mars Bar is vat, if they don't know that 6p is UK corporation tax paid by the retailer and distributor and manufacturer and 1p is US corporation tax paid by Mars Inc and 1p is US income tax on the dividends ultimately paid to Mr and Mrs Mars?