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  • FIRST POST
    • edinburgher
    • By edinburgher 2nd May 14, 3:58 PM
    • 11,122Posts
    • 59,705Thanks
    edinburgher
    Only freedom will do
    • #1
    • 2nd May 14, 3:58 PM
    Only freedom will do 2nd May 14 at 3:58 PM
    It has come to my attention that I have been here for a very long time

    I joined these forums in a dim and distant past, where money was my enemy and the weight of my student debts left me crushed and panicked, unable to picture a future where I would be able to get a debit card (never mind a mortgage).

    5 years later and the milestones of marriage, first home and first car have come and gone. Throughout it all, I have had a creeping feeling that something wasnít quite right. I donít get the world of work, and while Iíve never been unemployed in my adult life, Iíve tried too hard to try my hand at too many things and Iím left feeling like Iím an actor who recognises the play, but does not understand his motivation.

    As some of you will know, I have experienced some real heartache of late. Your messages of support and hope have been so touching and in many cases, I have got more comfort from anonymous individuals who took the time to get in touch than people I know in the Ďrealí world.

    While money would have done nothing to prevent it, the luxury of savings and our hard work over the years meant that we were in a position to make the right decisions and take our time with our next steps. Returning to work has been a real blow and without sounding even more melodramatic, I donít think Iíd realised just how damaging I find the merry-go-round of rote work, office politics and bureaucracy.

    It wonít do, I canít believe that this is as good as it gets and to quote one of my favourite singers ĎWe can always build a world better than thisí.

    From this point on, I plan to dedicate myself to achieving financial independence. Not MFW, but freedom from all the nonsense that we go through to just to pay for a pile of bricks and a few years of leisure at the end of our span.

    Hopefully you can join me for the journey
Page 274
    • Greying Pilgrim
    • By Greying Pilgrim 21st Mar 17, 8:51 PM
    • 4,219 Posts
    • 47,056 Thanks
    Greying Pilgrim
    Thanks, Greying.

    I was still at school when we had the poll tax. All I remember about it centred around the reporting of its opposition. However, I'm not really sure how it was unfair (do not know much about it).
    Originally posted by AlexLK
    Everybody had to pay 'something' - even the unemployed and students. It was less, IIRC, but you still had to pay. It didn't get away from income disparity - as CT doesn't, it's just that CT is based on property 'value' which is a nonsense - whereas poll tax was an arbitary figure seemingly made up by what the council wanted to spend and they knew how many people they had to divvy it up between in a given area, to fund them.

    Sorry for the thread hijack, ed.

    Greying
    'Ich habe genug' 'Your Vibe attracts your Tribe'

    'I am not in the pursuit of happiness, only in the discovery of joy' - Joyce Grenfell
    • katep23
    • By katep23 21st Mar 17, 9:46 PM
    • 1,318 Posts
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    katep23
    You're probably right re. GPs, I had always thought that some healthcare stuff (local primary care centre type things) were funded by CT, I am wrong on that front.
    Originally posted by edinburgher
    Some health and social services (stop smoking, substance abuse services, domiciliary care) are funded by local authorities, others are funded by the NHS via Clinical Commissioning Groups (such as GPs), whilst yet others are funded jointly.

    The budgets generally work in silos so what benefits one agency in cost reductions may cause increased costs to another agency - we need cross-agency budgets to improve the situation.

    Sorry to side-track the discussion!

    Edit: some roads are the responsibility of local authorities, some are down to Highways England. I don't think VED income is attributed to road maintenance.
    Last edited by katep23; 21-03-2017 at 9:50 PM.

    • edinburgher
    • By edinburgher 21st Mar 17, 10:35 PM
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    edinburgher
    Curious why you think property values are nonsense Greying? Sure, the values used are out-of-date, but the practice of valuation is well established and reasonably consistent
    • AlexLK
    • By AlexLK 21st Mar 17, 10:57 PM
    • 6,066 Posts
    • 32,095 Thanks
    AlexLK
    You're probably right re. GPs, I had always thought that some healthcare stuff (local primary care centre type things) were funded by CT, I am wrong on that front.
    Originally posted by edinburgher
    So far as I am aware the NHS and State Pension are funded by NI. I could well be wrong as I know very little about this.

    Your large house with a private lane is large, ergo it uses more of the public road to connect it with the rest of civilization, raising costs (even without streetlights).
    Originally posted by edinburgher
    Ed, the only contact with the rest of civilisation is a single track road width at the bottom of the lane / drive in most cases. How does that raise costs? Even tiny houses have drives that connect to the main road, I hardly see how this is different?

    I think your 'PAYG' tax will not work - why don't we replace it with a tax that bundles together lots of services and tries to charge people based on their ability to pay? We could call it 'Council Tax'
    Originally posted by edinburgher
    Council Tax doesn't charge on the basis of service usage. E.g. my parents pay c.£3,500 council tax per annum. They have their bins collected once per week and the bins are the same size as everyone else's. They don't use and have not used in the past: streetlights, schools, social care, the fire brigade or other LA provided services. In contrast, my in-laws pay very little council tax c.£1,000-1,250 per annum (less than half!). They similarly have their bins collected once per week but use or have used streetlights, schools (for 3 children), social care and other LA provided services. My parents pay enough tax without being taxed to live in a nice house whereas my in-laws pay less tax but use more services.

    My proposal would be for people to pay to access / use services which seems the fairest way to me. However, I could well be wrong.
    2018 totals:
    Savings £7,600
    Mortgage Overpayments £1,750
    • AlexLK
    • By AlexLK 21st Mar 17, 11:39 PM
    • 6,066 Posts
    • 32,095 Thanks
    AlexLK
    Just read this page back to myself and realise I am being somewhat dense and rather self absorbed. Whilst I don't really agree with the amount of taxes we pay in this country, I have spent a while thinking about the alternative (each providing for ourselves) and it led me to think about some of the pupils I teach. I don't think some of the pupils would have an education if it were left to their parents to pay for the service. It often seems like we pay far too many taxes. On a personal level, I often feel I'm not getting value for money. However, I wouldn't want to see a child go without an education or somebody elderly and infirm with only a state pension go without help.

    I was being selfish and idealistic (that we can all pay for ourselves).
    2018 totals:
    Savings £7,600
    Mortgage Overpayments £1,750
    • Greying Pilgrim
    • By Greying Pilgrim 22nd Mar 17, 6:40 AM
    • 4,219 Posts
    • 47,056 Thanks
    Greying Pilgrim
    Curious why you think property values are nonsense Greying? Sure, the values used are out-of-date, but the practice of valuation is well established and reasonably consistent
    Originally posted by edinburgher
    I don't think that they are consitent ed - and go out of whack too quickly. 'Value' is a notional thing at best. Our street was valued pretty much as a single band (for the majority of houses) and yet even back in 1991, there were 2 and 3 bedroom houses mingled togther (victorian housing - modernised/upgraded and not). There is a big disparity in use of services between the households, and yet we all (notionally) pay the same, with the exception of eligible discounts.

    I don't see how your property 'value' determines your use (or not) of services - I never have been able to see the connection. I can see that if an 8 bedroomed property has 8+ inhabitants, then there is the potential for there to be a bigger call on services - rubbish collection alone (potentially), but I can't say (because I really don't know) if an 8 bedroomed property is asked to pay 8X the CT that a 1 bedroomed property would be asked to pay.

    As I said ed - I don't know what the answer is - so yes, maybe we have to put up with an imperfect system, that always penalises someone, somewhere along the line - perhaps that is the nature of society. My point was that 'flat-rate' per capita tax has its problems too.

    Again, apologies for hijacking your wonderfully flowing thread and I'm bowing out of the discussion, as I appear to be adding nothing to it

    Happy Wednesday, ed and readers of this thread

    Greying X
    'Ich habe genug' 'Your Vibe attracts your Tribe'

    'I am not in the pursuit of happiness, only in the discovery of joy' - Joyce Grenfell
    • hiddenshadow
    • By hiddenshadow 22nd Mar 17, 8:30 AM
    • 2,479 Posts
    • 11,344 Thanks
    hiddenshadow
    I don't necessarily mind the concept of a PAYG system (though I think it would cost people far more than they think), but the implementation seems impossible:

    - how do you track "use" for things like streetlights? do you only pay for the ones near your home? what about near your work? do we all get trackers installed so we can "ping" against specific streetlights we actually "use" (e.g. travel past)?
    - how do you charge for preventative things? It's fine to say "police person X came out to your house for 2.5 hours after an incident, £1,340 please", but what about "that robbery that didn't happen due to law enforcement locally"?
    - how do you handle services that everyone wants available but no one wants to pay to use (similar to the law enforcement example - see also fire department, probably other community things like whoever mows the common areas, etc. basically anything not connected to a specific property)
    - to Alex's point above, how do you handle people who can't afford PAYG for those things? do you just prioritise certain things, do you allow people in certain circumstances to use them for free (thus rising the cost for everyone else as you have to pay to administer/monitor those freebies), are there things you deem them "unworthy" to have because they can't afford them?

    and then you get back into the realm of fair vs unfair taxation all over again. Just like universal basic income is too simplistic when you think about it (COL factors, mainly), PAYG taxation falls over pretty quickly, especially when faced with real-world numbers.

    I do think council tax is also too simplistic, especially as everything's based on 20+ year old valuations which seems a bit ridiculous. I wonder if you could do something similar to Ed's idea, though - take a given area and figure out a basic number you want to charge and apply that to the average house value in that area. If you're in a house less than that value, you pay the proportionate amount less, if you're in a house more than that value, you pay the proportionate amount more. Of course, the council would have to take into account how many houses would fall above/below the average, but at least then if property in an area starts skyrocketing in value, it wouldn't really matter for taxation purposes because all properties are going up (and, if anything, would likely be more fair as the properties whose value is going up the most would pay more in CT). That would require more regular adjusting of property values (no idea if/when CT bands are due to be re-calculated?).

    Anyway....taxes are hard!
    MFW: £197,100 (2013) to £100,646 (May '18)
    2018 MFW #56: £4,000/£105,000 3% / MFiT-T4 #15: £58,854/£90,000 65%
    • edinburgher
    • By edinburgher 22nd Mar 17, 8:54 AM
    • 11,122 Posts
    • 59,705 Thanks
    edinburgher
    @HS - I love that you credit me with 'an idea' - you are giving me far too much credit - I am largely talking nonsense and enjoying the frank back and forth that this thread generates

    @Greying - I think valuations are fine when they're current, with the exception of property hotspots with crazy price increases (London and then each incremental stop along the railway lines leading out of London that people can reconcile commuting to). An idea might be to revalue everything, change the multipliers (they can't double tax for everyone overnight) and then cap it (like the triple lock in reverse)?

    @Alex - I have been gently jesting in your direction re. it's ok for wealthier people to pay a bit more tax because your PAYG ideas have been the golden dream of small government fans and libertarians for... forever? You're right, everyone cannot be completely independent from each other and only pay for what they personally use, as it means that some people will be left behind. Some of those left behind might be !!!!less, but the majority will simply not have had the opportunities (birth/education/family wealth/health) that the more privileged were born into.

    In my mind society only works if 1) everyone does their bit and 2) we accept that we are not independent nations, but part of something larger. It doesn't mean that we all have to have street parties, hug our neighbours once a week and abandon privacy, just an acceptance that we cannot live our lives in a bubble.

    Right, back to the MSE topics?
    • Suffolk lass
    • By Suffolk lass 22nd Mar 17, 9:27 AM
    • 1,971 Posts
    • 20,606 Thanks
    Suffolk lass

    In my mind society only works if 1) everyone does their bit and 2) we accept that we are not independent nations, but part of something larger. It doesn't mean that we all have to have street parties, hug our neighbours once a week and abandon privacy, just an acceptance that we cannot live our lives in a bubble.

    Right, back to the MSE topics?
    Originally posted by edinburgher
    Hear, hear.

    However, I must apologise for any patronising offence - definitely not what I intended. I was trying to emphasise things that Council Tax pays for that we may all want to use at some point, and we are often mistaken in our assumptions about people and their circumstances. Sorry.
    MFiT T4 #2 update 88.72% after Q9 tiny bit ahead of where I should be
    Save £12k in 2018 #53 - after March 19.96% £1,996.19/£10,000 5.04% behind
    OS Grocery Challenge 2018 spent £721.33/£3,000 including stores so far 24.04% of my annual budget at the end of April
    My DFD is here
    • edinburgher
    • By edinburgher 22nd Mar 17, 9:47 AM
    • 11,122 Posts
    • 59,705 Thanks
    edinburgher
    Not to worry SL, I accept that your intention was to discuss, not to chide! I am not particularly patient when discussions go off on tangents and/or logic goes by the wayside from the original points, damn robot brain
    • Karmacat
    • By Karmacat 22nd Mar 17, 10:10 AM
    • 29,192 Posts
    • 166,671 Thanks
    Karmacat
    Just read this page back to myself and realise I am being somewhat dense and rather self absorbed. Whilst I don't really agree with the amount of taxes we pay in this country, I have spent a while thinking about the alternative (each providing for ourselves) and it led me to think about some of the pupils I teach. I don't think some of the pupils would have an education if it were left to their parents to pay for the service. It often seems like we pay far too many taxes. On a personal level, I often feel I'm not getting value for money. However, I wouldn't want to see a child go without an education or somebody elderly and infirm with only a state pension go without help.

    I was being selfish and idealistic (that we can all pay for ourselves).
    Originally posted by AlexLK
    That's a courageous post, Alex, thanks for putting it up there.

    I am not particularly patient when discussions go off on tangents and/or logic goes by the wayside from the original points, damn robot brain
    Originally posted by edinburgher
    I never take part in online discussions like these, Ed, it freaks me out too much, partly because of the breadth, I think - "robot brain" takes some of that away sometimes, it becomes simple "if ... then", which is easier for me to cope with. (Plus, what *do* I think, anyway? No idea).

    Gulp.
    Retired August 2016
    • Tropically
    • By Tropically 22nd Mar 17, 10:28 AM
    • 253 Posts
    • 742 Thanks
    Tropically
    I know you want to get back to MSE discussions but I still want to pipe up! Applying council tax at a flat rate is known as a regressive tax. That's not my opinion, that's what it's called when poor people have to pay a greater proportion of their income to tax than rich people. So by googling regressive tax, one could find both the ups and downs of these kinds of taxes.

    Our council tax has gone up by about 8% - not as high as yours. In your fancy spreadsheet, how do you account for inflation and increases in tax etc.?

    Edited to add: It's not my intention to 'teach' you or anybody anything (especially things you already know), but in case anyone reading wanted to research further.
    Last edited by Tropically; 22-03-2017 at 10:36 AM.
    • edinburgher
    • By edinburgher 22nd Mar 17, 12:20 PM
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    edinburgher
    Thank you Tropically - that was the word that was at the tip of my tongue but I couldn't quite place - regressive!

    I'm new to having to predict a tax increase as CT has been frozen for 10 years! My highly unscientific approach was to 1) amend the current budget spreadsheet so that the new amounts are reflected for the coming CT year and 2) add a new 'pot' to the worksheet that contains the list of savings for expected future expenses, saving a matching % increase towards next year's potential bill (so if it went from £100 to £110 this year, assume £121 next year (save £11/month).

    This is how I budget for expected but unknown expenses - expect the worst, enjoy it when/if it doesn't happen.
    • AlexLK
    • By AlexLK 22nd Mar 17, 10:21 PM
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    AlexLK
    So, you've worked out where I fit on the political spectrum. Often, I wish I had a robot brain, I'm sure it would be easier to switch off.

    Do you have a spreadsheet which predicts expenses? I have a spreadsheet which I update after expenses have left the account. Direct debits I copy over from last month but that's the only "automated" element of the spreadsheet.
    2018 totals:
    Savings £7,600
    Mortgage Overpayments £1,750
    • edinburgher
    • By edinburgher 23rd Mar 17, 8:47 AM
    • 11,122 Posts
    • 59,705 Thanks
    edinburgher
    Yes, I have a spreadsheet that predicts all our unpredicatable budget categories (groceries, expenses for our daughter, petrol, home maintenance). All the other categories don't need to be predicted as they are so regular.

    It's not particularly complex, but it uses a lot of data. Essentially it looks at averages since February 2015 and adjusts based on the length of months and any exceptions required.

    We have just about got groceries nailed down, which is a relief, as spending has felt out of control for the last 4-5 months. The prediction is now accurate to £10, which I am very pleased with.
    • edinburgher
    • By edinburgher 23rd Mar 17, 9:44 AM
    • 11,122 Posts
    • 59,705 Thanks
    edinburgher
    March 2017 Financial Update

    Net Worth £157,738 (+£16,419.15)

    Mrs E gets paid tomorrow, so time to call time on finances for March.

    A great month for the finances, the bulk of that increase was from my small DB pension being uprated, but it was also a good month for DC pensions (+£2,000 or so). The one damp squib was the value of our house, which decreased by £1,500 based on my highly unscientific valuation technique (median value between last formal valuation and the Z0opla valuation).

    April is going to be a mixed bag. On the one hand, we have a few significant expenses coming up (summer holiday, work clothes and a hotel for my London trip), on the other hand there will be some hefty payments going into investments. I've made a few adhoc SIPP payments, so will be expecting tax relief for those and I have reinstated our monthly ISA order (VANGUARD INVS UK FTSE GLOBAL ALL CAP INDEX A, I won't be rebuilding our holding in VLS100).

    I hope that everybody else has had a productive month?
    • Suffolk lass
    • By Suffolk lass 23rd Mar 17, 10:41 AM
    • 1,971 Posts
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    Suffolk lass
    Very impressive growth ed. Our month is severely impacted by 3 big things this month:
    • Home buildings and contents renewal - obviously I had budgeted for this but I evidently transposed from £1440 to £1144 when completing the budget workbook so a slightly nasty surprise
    • Husband's motorcycle insurance - up from £150 to £220 - with Saggy () down from £290 with his renewal company. The steep increase is after his car accident in September that wrote off our car and the other car, with an injury claim in progress (husband's fault) - at least he took the course rather than the points or it could have been worse. He also paid for repairs to the bike following a minor self-inflicted episode last June - £280 and bought a replacement brake disk (£84) all in the same month . Safe to say planning isn't really his thing!
    • I also had to sub the other house account £600 as we could not pay the plumber for sorting out the bathroom and boiler (a £1425 bill) - although we planned this, we then had to ask a tenant to leave when he became abusive so the account was short by 2-3 month's surplus

    I haven't totted it all up yet but it isn't looking great with no mortgage OP for March.

    Heads still up! I like the idea between the last formal valuation and the online estimate for house value. I might have to emulate that one.
    Last edited by Suffolk lass; 23-03-2017 at 10:42 AM. Reason: punctuation
    MFiT T4 #2 update 88.72% after Q9 tiny bit ahead of where I should be
    Save £12k in 2018 #53 - after March 19.96% £1,996.19/£10,000 5.04% behind
    OS Grocery Challenge 2018 spent £721.33/£3,000 including stores so far 24.04% of my annual budget at the end of April
    My DFD is here
    • Karmacat
    • By Karmacat 23rd Mar 17, 10:43 AM
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    Karmacat
    I've never done this calculation in detail ...
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    • edinburgher
    • By edinburgher 23rd Mar 17, 11:19 AM
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    edinburgher
    Thanks SL - that sounds like a very expensive home insurance quote - are you paying for any bundled services that you don't use? I ask as I was talked into taking out an impressive sounding 'deal' from L&G that was sold to me by our mortgage broker, but ended up costing double the bare
    bones quotes from elsewhere.

    @KC - if you never make the calculation, how did you know you could retire?
    • Karmacat
    • By Karmacat 23rd Mar 17, 12:46 PM
    • 29,192 Posts
    • 166,671 Thanks
    Karmacat
    @KC - if you never make the calculation, how did you know you could retire?
    Originally posted by edinburgher
    How did I *know* I could retire? Short answer, I knew I was dead if I didn't, and I knew I could sell the house if I needed to, and buy a flat somewhere in the county where I live. I'd kept track of how my investments and savings were going, though I hadn't done a calculation of percentage increases.

    But I haven't calculated the increase in NW because of house price increase, though if anyone should, I should - aside from the aspect of noise from the neighbours, I'd be perfectly okay with living in a one bed flat, as opposed to a 3 bed house.

    However, I've never even tried to calculate how much the French apartment might be worth, let alone how much of any sale price I could get, the taxation and sales system is really different, and offers that are wildly different from the advertised sale price are accepted. I might have a go at that one, now, because my sister just successfully sold the French house she and her late husband were going to have as a holiday home (earlier this week!). It was on for E150k, and she eventually accepted an offer for E103k. And she'll know what the up to date situation is for who pays what tax, so I finally have a shot at finding out the accurate situation. Guesstimating, my NW might be somewhere around £470k, with £360k of that tied up in property I sound so rich, when I put it like that.

    Okay, before the tax year ends, I'll calculate my NW - it will be good to know, and a good baseline to have.


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