It's time to start digging up those Squirrelled Nuts!!!!

Sea_Shell

[Deleted User] said:

Sea_Shell said:

It was the 5 year anniversary of this thread yesterday!!!    

After 5 years, we have 122% of what we started with.
Our total spends over that 5 years equate to 14.5% of the figure we started with
Rolling 12 month spends equate to 2.5% of our current total


You do the maths!!        I wouldn't want to 'brag' now would I.   

Congrats!

But there is a different way of doing the maths.  CPI was 289.6 in June 2019.  In May 2024 (latest available) it was 386.4. So CPI inflation has been roughly 33.4%  If your pot had gone up by CPI inflation it would be worth £715,332 [£536,129 x (386.4 / 289.6)]   

Well it didn't, so no point dwelling on it.

But, does that take into account the 14.5% that we've spent?

If we reset for the next 5 years, starting now, as "day one", it's still a pretty good position to be in.

However, who on earth knows what the next 5 years holds 😉.    Will our pips be squeezed?

cfw1994

Ahhh…that tricky one, inflation.

Other than roughly modelling some inflation-based wizardry on a spreadsheet to take us to 100, or whenever we expire (whichever comes first😳), I try not to dwell on what-might-have-beens…

I see inflation as a very personal thing.
Some things you can’t impact.  Council tax, for example (short of moving!).  Pensions might rise at a particular rate.

Many things you can.
Despite this year causing much more legwork than usual, judicious use of topcashback and a willingness to ‘do the insurance dance’ has meant that our car insurance (& we have three in the house 😜) has remained *broadly* flat for several years.  Good, considering one renewal this year had jumped over 70% (H***ings D***ct can go fish for other suckers this year 🤣).  Ended up with a 20% hike elsewhere, but got one of the others down a little 🤷‍♂️
We cook more of our own food from fresh, and are happy to shop around (Aldi/Lidl/Costco/greengrocer) to keep those prices down.

I prefer to take the Sea_shell approach and check our ‘net worth’ figure from time to time.  

If a year passes and we are broadly the same, life is good….even if that number should be ‘even more’ if we applied inflation 💪

We do squander far too much on festivals, events and indeed our luxury item, a month in the snow…but there are always ways to do these things to maximise fun and minimise outgoings!

Sea_Shell

[Deleted User] said:

Sea_Shell said:

But, does that take into account the 14.5% that we've spent?

No, it doesn't. It's just a straight indexation of the starting pot.  

So, in that case we HAVE beaten those CPI inflation figures!!     As we would have 137% of what we started with, if we hadn't touched that pot and our 5 years of spends had been covered by other "income" outwith these figures.    If, say, they'd come from SP or DB (which they haven't...yet) 

Sea_Shell

[Deleted User] said:

Sea_Shell said:

[Deleted User] said:

Sea_Shell said:

But, does that take into account the 14.5% that we've spent?

No, it doesn't. It's just a straight indexation of the starting pot.  

So, in that case we HAVE beaten those CPI inflation figures!!

It's not a competition.

I didn't say it was and I'm not turning it into one.    Just that one can "spin" figures in different ways.   

cfw1994 said:

I prefer to take the Sea_shell approach and check our ‘net worth’ figure from time to time.  

If a year passes and we are broadly the same, life is good….even if that number should be ‘even more’ if we applied inflation 💪

Notepad_Phil

[Deleted User] said:

Sea_Shell said:

It was the 5 year anniversary of this thread yesterday!!!    

After 5 years, we have 122% of what we started with.
Our total spends over that 5 years equate to 14.5% of the figure we started with
Rolling 12 month spends equate to 2.5% of our current total


You do the maths!!        I wouldn't want to 'brag' now would I.   

Congrats!

But there is a different way of doing the maths.  CPI was 289.6 in June 2019.  In May 2024 (latest available) it was 386.4. So CPI inflation has been roughly 33.4%  If your pot had gone up by CPI inflation it would be worth £715,332 [£536,129 x (386.4 / 289.6)]   

Isn't that RPI rather than CPI? If you use the ONS's preferred CPIH measure then I think that Sea_Shell is not far off from matching inflation. And as the pot has been withdrawn from, then it's doing even better. 

michaels

Apologies SS for more on this.  I always think it is easiest to always work in 'todays prices' as we know what things cost today so rather than adjusting the current pot to compare with the 5 years ago pot, I would adjust the 5 years ago pot to see what it could purchase at todays prices.

For example a pot that was £500k in June 2019 actually had spending power of £667k at todays prices so if the current pot is say £600k then effectively the pot has fallen by 67k - but has obviously supported 5 years of spend so not surprising.

It means that despite the seemingly stellar performance of the last 5 years, once adjusted for inflation they are probably pretty average.

zagfles

cfw1994 said:

Ahhh…that tricky one, inflation.

Other than roughly modelling some inflation-based wizardry on a spreadsheet to take us to 100, or whenever we expire (whichever comes first😳), I try not to dwell on what-might-have-beens…

I see inflation as a very personal thing.
Some things you can’t impact.  Council tax, for example (short of moving!).  Pensions might rise at a particular rate.

Many things you can.
Despite this year causing much more legwork than usual, judicious use of topcashback and a willingness to ‘do the insurance dance’ has meant that our car insurance (& we have three in the house 😜) has remained *broadly* flat for several years.  Good, considering one renewal this year had jumped over 70% (H***ings D***ct can go fish for other suckers this year 🤣).  Ended up with a 20% hike elsewhere, but got one of the others down a little 🤷‍♂️
We cook more of our own food from fresh, and are happy to shop around (Aldi/Lidl/Costco/greengrocer) to keep those prices down.

I prefer to take the Sea_shell approach and check our ‘net worth’ figure from time to time.  

If a year passes and we are broadly the same, life is good….even if that number should be ‘even more’ if we applied inflation 💪

We do squander far too much on festivals, events and indeed our luxury item, a month in the snow…but there are always ways to do these things to maximise fun and minimise outgoings!

Inflation is not really a "personal thing". People consume differently and so may be affected slightly differently in the short term but in the long run most people are affected pretty much the same. There is a lot ridiculous hyperbole from the media and some politicians about the so-called "cost of living crisis", but even so most people seem to have a head in the sand attitude towards it. 

I think it will be tempting for the next govt, whoever it is, to use inflation to help balance the books. It seems to be an easy way to raise taxes and reduce govt debt, through fiscal drag and devaluing debt, without people complaining too much because they aren't seeing losses in £. 

cfw1994

zagfles said:

Inflation is not really a "personal thing". 

The ONS might disagree with you 😉
https://www.ons.gov.uk/visualisations/dvc1833/calculator/index.html

Plenty of others too: one example here, but you are of course welcome to disagree with me/them 👍

Pat38493

zagfles said:

cfw1994 said:

Ahhh…that tricky one, inflation.

Other than roughly modelling some inflation-based wizardry on a spreadsheet to take us to 100, or whenever we expire (whichever comes first😳), I try not to dwell on what-might-have-beens…

I see inflation as a very personal thing.
Some things you can’t impact.  Council tax, for example (short of moving!).  Pensions might rise at a particular rate.

Many things you can.
Despite this year causing much more legwork than usual, judicious use of topcashback and a willingness to ‘do the insurance dance’ has meant that our car insurance (& we have three in the house 😜) has remained *broadly* flat for several years.  Good, considering one renewal this year had jumped over 70% (H***ings D***ct can go fish for other suckers this year 🤣).  Ended up with a 20% hike elsewhere, but got one of the others down a little 🤷‍♂️
We cook more of our own food from fresh, and are happy to shop around (Aldi/Lidl/Costco/greengrocer) to keep those prices down.

I prefer to take the Sea_shell approach and check our ‘net worth’ figure from time to time.  

If a year passes and we are broadly the same, life is good….even if that number should be ‘even more’ if we applied inflation 💪

We do squander far too much on festivals, events and indeed our luxury item, a month in the snow…but there are always ways to do these things to maximise fun and minimise outgoings!

Inflation is not really a "personal thing". People consume differently and so may be affected slightly differently in the short term but in the long run most people are affected pretty much the same. There is a lot ridiculous hyperbole from the media and some politicians about the so-called "cost of living crisis", but even so most people seem to have a head in the sand attitude towards it. 

I think it will be tempting for the next govt, whoever it is, to use inflation to help balance the books. It seems to be an easy way to raise taxes and reduce govt debt, through fiscal drag and devaluing debt, without people complaining too much because they aren't seeing losses in £. 

Didn't I read somewhere that the UK government has been issuing a lot of inflation linked bonds in recent times, so their scope for using inflation to erode debt is more limited than before?

Cus

There are a lot of people on this thread  who have retired or fire'd that appear to gain satisfaction and happiness from saving money and managing on a relatively small income, good for them.
There are also a lot of people who gain satisfaction and happiness from spending money and living on a high income.  They are generally not on these forums.  It's not always the case that spending more doesn't make you happy.

I guess if you are preoccupied with justifying your own low income/spend versus others who have/spend more, and regular tell yourself you are happy with that then maybe there's an element of kidding yourself, a bit like the people who spend loads and say it makes them happy but they aren't.