INVESTING FOR YOUR RETIREMENT, POSTSCRIPT.

I unintentionally cut the original post short before I had finished. I got all the way to achieving financial security, and all I came up with after that was to spend more. A good idea in itself, but there are those who might still want to invest for income etc. especially if they don’t have a good pension. Land and property are still the only things I would invest in, but I have a problem with buy to let. I think it is unethical and is transferring money from poor millennials into my generation’s already stuffed pockets. Also, the government is making life harder, quite rightly, for buy to let landlords, with increased stamp duty and less generous allowances. There is still a category that I think is more ethical and still well treated tax wise, you will probably have to pay the extra 3% stamp duty though. I am talking about holiday lets and before you shoot me down in flames let me attempt to justify holiday letting; I have to, I have 2 myself, although it came about by circumstance and was not planned.

I know that there are those who object to second homes in the country driving the prices out of the reach of locals, but we have to remember that in the first place those houses have been sold to “offcomers” by locals taking advantage of the higher prices. I remember quite a few “affordable houses” being built in Chapel Stile in The Langdales, back in the 70’s. Within about 5 years they had all been sold off as second homes for a big profit, despite being quite ugly and not at all country cottagey. A friend of mine related a conversation he had overheard in a pub, where a farmer was banging on about his son not being able to afford to buy locally. The guy he was talking to said, “but haven’t you got 4 empty cottages”. “Don’t be daft”, said the farmer, “he couldn’t afford one of those”. In fact, given the low wages in the rural economy there are very few if any young people who have any hope of buying locally, or anywhere else for that matter. There used to be council houses for them, but those have all been bought cheaply by the people who rented them and subsequently sold on for a big profit. Even the specially subsidized “affordable homes”, which are included in all new developments now are not affordable to young locals. So, their only hope is to head to the towns and cities and try to make enough money to able to come back years later, or buy in one of the areas that are still cheap. When I came back up to the Lakes from London I bought my first house in Millom, quite a culture shock, and several moves and a lot of renovation later was able work my way back to civilization. I don’t really see why anyone should expect to be able to buy in the areas where they were born, what about all the people who were born in London. It is obvious that houses in the national parks, seaside villages and other desirable areas are going to be expensive and especially in demand as second homes. A lot of those second homes are owned by wealthy people who might only use them for several weeks in the summer, that is obviously not a good state of affairs, and some of the villages become ghost towns in the Winter. Holiday lets are a bit different, it is in the interests of the owners to have them let for as many weeks as possible. In most rural areas the most important part of the economy is tourism and the tourists have to stay somewhere.

So, although holiday letting is not entirely ideal from a sociological point of view it is not without merit either. As an owner it has many advantages over buy to let, it is treated as a business by HMRC and has more favorable treatment taxwise than buy to let. The income is much better than a buy to let and of course you can always use it yourself. Where there are holiday lets there are companies who will do changeovers for you, there are holiday letting companies who will handle all the bookings and the money side. The letting companies charge about 20% and the cleaning companies about £70 for a changeover but that includes supplying all the bedding and towels etc. It sounds a lot but if you are getting about £500 to £600 a week for a 2 bedder it’s not bad for very little work. Another plus is that you will pay business rates rather than council tax and the amount you pay will almost certainly be zero.

Something else worth considering if you think, as I do, that at some point everything is going to go tits up, is a bolt hole in a remote area. To work properly it will be much better if you could do that in conjunction with others and it is something I am considering setting up, if I can generate enough interest. My plan is to buy property in rural areas of Spain and Italy in particular. Unlike here no-one wants live in the country villages, all the young people have gone to the towns and cities and in some cases the local government is actually paying people to go and live there. A group of like-minded people could buy dirt cheap in lovely medieval villages, renovate the properties and farm on a small scale to become self-sufficient. Some would live there all the time and others could use them for holidays and or rent them out and would always have them to retreat to if and when the world goes completely mad. I have had some preliminary discussions with a friend who is a psychiatrist and would like to set up a non-religious meditation retreat in a remote area, so there is a possibility for symbiosis, the two would run happily side by side.

Let me say again I would be very grateful if you would share my blog with as many friends as possible. I will soon be giving up trying to change the world, it is doomed, and concentrate on setting up an alternative.

 

YET ANOTHER BREXIT SPECIAL

I can’t see why the Irish border “problem” is looming so large in the Brexit talks. We don’t want a hard border between Northern Ireland and the Republic. Ireland don’t want a hard border, so who is going to go to all the trouble and expense of building customs posts and fencing and recruiting the hatchet faced jobsworths to staff them? If we just carry on as usual and let all the cars and lorries trundle across the border without let or hindrance, as they do now, then there will be no problem. If the authoritarian bureaucrats of the EU insist on having one then it is surely a matter between them and the Republic of Ireland as we will no longer be in the club. The EU would, however, be very foolish to insist on a hard border because the Irish government and people would soon realise that problem was being created by Brussels not London. The Brussels bureaucracy are already facing rebellion on several other fronts, quite right too.

Anyway, as I have said previously I think we should take the pragmatic approach for now and stay in, we can have another referendum in a few years time. People have now seen the reality of Brexit and surely everyone realizes that can be no soft Brexit. The EU have also had a wake-up call and might now be in the frame of mind to start thinking about some reforms. In the meantime, we could be holding talks with some of the other countries with eurosceptic tendencies about reducing the power and the pay of the Brussels unelected elite. Maybe we could even think about starting an alternative EU.

If at some time in the future when we have a strong government with an unequivocal mandate for a hard Brexit we will be in a much better position to cut ourselves a good deal. If I was going into talks with EU in those circumstances they would be very short and sweet. Just throw the ball into their court. As with the Irish border I would just say we are leaving but as far as we are concerned it can be business as usual; if you want to create havoc that is up to you. We can just have agreements to make life easier at our borders with the EU countries which could be still be semi-open. Citizens from European countries would have the right to travel freely to the UK, but not an automatic right to settle here. I would expect the EU to reciprocate and we could be visa free for them and they for us. We could keep the reciprocal health insurance agreements and co-operation on security and education and all that stuff it would be just as much in their interests as ours. If they introduce tariffs on our goods then we introduce tit for tat tariffs on their goods. We should also make a start on becoming self-sufficient and reducing our population.

Nothing needs to be complicated if you keep it simple, making everything complicated is only in the interests of those who are paid large salaries to keep it that way. The rest of us could do without the stress and the drain on our finances.

 

BREXIT SPECIAL

It’s beginning to look like I have been proved right again on several counts. The arrogance and intransigence of the EU is giving momentum to the far right. More people are becoming concerned about the Islamisation of the UK and Europe and our so-called leaders, especially the EU, cow-towing to Islam, why? No one wants a soft Brexit; as far as I am concerned we either come out completely or stay in, it seems that for once the majority agree with me. I am of course referring to the latest You-Gov poll. I am not a great fan of statistics and polls but they can give an indication as to what direction we are heading in. The EU is right about one thing we can’t cherry pick the bits we want; equally the EU can’t dictate to us, at the end of the day if we separate completely it will be worse for them than it will for us, and could even trigger the break-up of the EU. I think that needs to happen. Although I am a great believer in a united Europe the EU needs massive reform and that will probably only come about if we can have a fresh start.

However, in the short-term Brexit has become such a shambles that we should stay in until such time as we have decided exactly what we want and have a strong government with an unequivocal mandate. As I have said all along there can be no such thing as a soft Brexit, we are either fully in or fully out. The problem is that the British people are divided roughly 50:50 about whether they want to stay in or come out and we shouldn’t change anything until we have a much stronger majority either way. We can negotiate with the EU until the cows come home but they will just keep demanding more concessions and the more we concede the more they will want. They are bullies and the only way to deal with bullies is to smack them hard in the mouth right from the start. What we need is Nigel Farage as our chief negotiator; we might get it yet! I think we will almost certainly get Boris as leader of the Tories/PM, and yes, I think there will be another general election sooner rather than later. Boris comes out as the most likely alternative to May to have any chance of taking on Corbyn.

Now for some of those figures from the You-Gov poll they show that 38% would vote for a new party on the right that was committed to Brexit, 24% would vote for an explicitly far right anti-immigrant anti-Islam party. Conversely one in three would support a new anti-Brexit centrist party. Only 11% support May’s Chequers proposal. 34% think Boris would do a better job than May.

Voters have become disillusioned with the two main parties and this is likely to be exploited by the right and possibly the centre. Tory donors and allies of Nigel Farage are plotting to raise £10 million to set up a new hard Brexit party, a move that could make it impossible for the Tories to win the next election. There are also those who are plotting to create a right-wing mass movement throughout Europe. The Lib-Dem leader Vince Cable has been holding talks on the creation of a new centrist party. Several European countries have moved to the right already, and it is mostly down to people being fed up with the destruction of Europe by Islam. The common people have more sense that the thick bastards in charge; it is not racist to be concerned about our way of life being lost to a backward, intolerant, brutal religion that supports paedophilia and treats women especially appallingly. Not only is well overdue to call a halt on Islam, we need to start reversing what has happened already, that alone would make people more likely to want to remain in Europe.

We are living in interesting times.

INVESTING FOR YOUR RETIREMENT.

Given low interest rates, the property market in the doldrums, Brexit, the banking crisis, government and personal debt, etc. etc. Those of us who are lucky enough to have anything to invest find there are few opportunities to find a safe haven for our cash, never mind hoping to get a reasonable return. The banks take our money on deposit and pay us probably less than 1% interest and then they lend it out to others at anything up to 30% interest. In the case of payday loans sometimes several thousand percent. So, we are not going to get value for money from banks. Peer to peer lenders are an interesting development but I think, at the moment, I would be more inclined to borrow from them than to lend.

Almost certainly the most important investment decision you can ever make is not to get into debt in the first place. You should only borrow money to buy property or land, or for your own business, and then you should go out of your way to pay it back as soon as you possibly can. If you borrow for new cars, holidays etc. everything you buy will cost more, i.e. the interest on your loans, and you will be in permanent wage slavery. There is an online movement now called FIRE, (financial independence, retire early). Only one in four British adults have any savings whatsoever and the average savings ratio is just 5.2%. FIRE enthusiasts aim to save at least 50% of their income. And, by spending less or earning more, ideally both, they reach financial independence much earlier than the normal retirement age, in their 50’s, 40’s or even 30’s. Being financially independent does not mean you have to do nothing, but it means you can do what you want to do and don’t have to be a wage slave. I have some reservations about FIRE, it depends on investing the money you save in stocks and shares and funds, which I consider to be very risky investments. I have also known, and known of, people who have worked their arses off to be able to retire early and then dropped dead before they had a chance to enjoy the benefits.

However, as an employee or self-employed, it is probably worth having a work place pension. There are tax advantages and your employer has to contribute to it. Obviously, my reservation is that it will be invested in mainstream investments but the government, who have an interest in getting people to save for their retirement, underwrite this risk. Even so for most people their main investment should still be the property they live in. Undoubtedly, this is the most important investment you can have; a roof over your head that you own, in a place where you are happy to live and preferably with a bit of land. Once you have that you can wave 2 fingers at the man. You might have to be careful with your money, you might have to do a bit of work on the properties and you might have to move a few times but it is possible even for those on relatively modest incomes, especially if there are 2 of you earning and no kids. Reproducing is one of the most expensive things you can do and guaranteed to keep you as a slave to the man. I know people who have done it, property that is not reproduction, and paid off the mortgage by their mid-forties, it was because they followed my advice and not convention.

Once you have reached that goal it becomes a bit more difficult to find a home for your surplus cash. I would recommend that you spend a bit more. I know it is not easy and having spent years being careful with your money you get into a habit and I certainly would not advocate spending for the sake of it. But bear in mind that if you keep on accumulating more than you need it could eventually end up rapidly disappearing to keep you like a cabbage in a rest home. So, go on spend it while you can enjoy it, while you are at it de-clutter and don’t keep anything for best use it. The new cars and holidays can now be bought with cash and you could always do some good with your money, if so minded. If giving to charity check carefully how much of their income actually goes to the good causes and how much they pay their CEO and senior management. Personally, I think you would do more good handing out £20 notes to homeless people and giving big tips to poorly paid staff in restaurants etc. Other possible homes for your money are works of art and antiques, which will give you pleasure as well as being an investment. Please don’t lock them away in strong rooms, they should be seen and give pleasure to others as well. It could be useful to have some gold sovereigns in case everything goes tits up. However, with both of these there is a bit of a conundrum, there are plenty of people out there who would love to relieve you of them and If you insure them it will cost a fortune. If you live in a low crime area it will be less of a problem and your life will be better.

My take on investment is and always has been that the things to invest in are land and property, not easily stolen from you. I am not talking about buy to lets; It is a great pity that my generation have been pushed into buying them due to low returns on invested cash and distrust of the financial markets generally. Gold and works of art can be stolen from you, the financial markets work by stealing from you, commissions, fees, golden opportunities that always seem to be more opportune for those who are selling them. These investments can and do disappear overnight, all you have is a piece of paper; I wouldn’t even trust major currencies, GBP, Euro and dollar, anymore given that the governments who issue them are in debt to the tune of trillions. However, it is wrong that my generation should buy up all the housing stock pushing the prices out of reach of younger people and then add insult to injury by charging excessive rents to live in them.

It also annoys me when the government and others start banging on about old people living in big houses as if we should all be packed off to live in boxes in towns. It is entirely up the individual, governments hate that word, to live wherever they want. A lot of people make the mistake as they get older of going smaller. In fact, when you retire and have more time you might want to take up hobbies that need space, you might enjoy having a big garden. You might like having family and friends to stay. Even if you wanted to sit on your own in one room of a mansion that is your right. I live, on my own now, in a five-bedroom house and there are times I could do with more bedrooms. Then when things go tits up, and it is just a case of when, not if, you will be able to provide a comfortable bolt hole for family and friends and have a bit of land to grow your own food have a few chickens etc. Once the majority have died off you can live more or less where you want.  It’s reproduction and excessive immigration that cause the housing shortage not old people living in big houses. Often their heirs encourage them to sell up and move into a flat, with an eye on getting their hands on some of that surplus cash. The flat then becomes their prison cell and makes them all the more likely to end up in care. Fortunately, my heirs have all enjoyed and continue to enjoy the house I live in and were happy when I told them I was going to stay here. I have a considerable investment in it, not just financial, but all the work my late wife and I have put into it over the years

So, to conclude once you have retired life can be pretty good. You don’t have to get up and go to work 5 days a week. Your pension income is safer than any salary, nobody can sack you or make you redundant. You have a bus pass, which is actually more useful than I thought it would be, and it is wonderful to get something for nothing for once. Another incredible value for money investment is membership of the National Trust. Probably the most important investment of all is your health and I will have more to say about that in future posts. It might not be what you expect, but briefly it is stress that kills you, avoid at all costs, keep active, eat, drink and be merry. Enjoy life and remember a short happy life is better than a long miserable one. But play your cards right and you can have both.

I HAVE DONE ALL OF THE ABOVE SO KEEP READING MY BLOG, THAT COULD BE A GOOD INVESTMENT TOO AND WON’T EVEN COST YOU ANYTHING EXCEPT YOUR TIME. YOU CAN DO ME A FAVOUR THOUGH AND SHARE IT WITH AS MANY PEOPLE AS POSSIBLE!!!  

BREXIT SPECIAL

Cabinet resignations, the probability of another election and the prospect of Rees Mogg or Jeremy Corbyn as the next PM, or even Boris. I have said it all along there can be no such thing as a soft Brexit. We are going to end up with the worst of both worlds. There are only 2 realistic options, hard Brexit or stay in. The EU, aka Germany, are bullies, look at they way they have shafted Greece, and they will never give an inch while we go into negotiations cap in hand. “Please Mr Junker can I have some more”. How can we possibly negotiate from a strong position when the government are in such a shambles and have no mandate.

We should now stay in until we have a strong government and then have another referendum. The choices being, stay in and try to reform the EU or come out hard, and only if we have a strong majority in favour. We are not Greece, we are not in a weak position, we are, and should be more of, a major power within the EU. They actually need us more than we need them, even if we had a bit of economic chaos for a few years. Our referendum result and the rise of far-right parties in Europe should be a wake-up call for the EU political establishment.

We need to reform our own politics, the Tories are making a complete bog of Brexit, but I can’t see Labour doing any better, perhaps we need a coalition or proportional representation, Germany have had that since the end of WW2 and it hasn’t done them any harm, although non-European immigration now threatens to destroy them and the rest of Europe. The whole world is in a mess as the vast majority live in grinding poverty and the rich get richer. This will continue unless we can see a drastic reduction in the world population, not likely while it is increasing at the rate of 200,000 a day. In the meantime we just need to make sure that we don’t let them all come here.

Apparently, there is a possibility that if and when we come out of the EU we will be allowed to retain individual EU citizenship. Obviously, this is a tactic to further weaken the British governments position, but I tell you what I will be going for it.