26 July 2016

Your Pension Pot

Unfortunately, as far as pension funds are concerned, Britain's  thriving finance "industry" fails to provide the best deal for the consumer.

Planning for ones pension begins with a lifestyle choice. A reduction in the daily cost of living in order to create a surplus, and what best to do with that surplus.
  1. Eliminate waste by eating well but not extravagantly.
  2. Forget expensive holidays
  3. Steer clear of expensive wheels.
  4. Dress to please but not show off.
  5. Make do and mend as the saying goes.
  6. Forget the expensive pedigree dog, cat, or exotica.
  7. Buy rather than rent your home.
Now what to do with the surplus cash ?
  1. Buy your first home and plough back to improve the home, and pay off the mortgage early.
  2. Take in a student or lodger in the summer to generate some extra revenue
  3. Don't sell up and move "sideways" unless the way is clear to gain upwardly into a higher potential capital gain. Remember the legal and associated costs of moving, adds up to many thousands.
  4. Invest in a "buy to let" or even a shop or two. Commercial property will provide a higher income but a less reliable capital gain and must be chosen much more carefully.
  5. If and when a windfall comes your way invest in bricks and mortar with the help of a mortgage if necessary. Be brave in times when the market seems to be going down, instead of up. There will always be an upturn - because property is king - (cash is not king when the goal is your pension, because the paper promise its written on is shrinking in value every day its in your pocket).
  6. Beware financial advisors and avoid bonds like the plague. 
  7. Befriend an estate agent. Believe it or not they are the property professionals most likely and best able to find you the investment that will become your pension pot.
And what is it that makes me stand on this soap box ?
  1. It worked for me.
  2. Some young reader of this blog post may enjoy a happy retirement too. 
  3. For the golden oldies the time is long gone. Perhaps your solution was better and hopefully no worse than mine. If so I would welcome your input here.
  4. The experience of an "old school" fourth generation estate agent. 
  5. The Netherlands has a pension system regarded as the best in the world. A system not available in ripped off Britain. Read more here:
  6.  Netherlands Pension Scheme    v      BBC report on BHS
  7. Cash no longer king - read further:   £1000 today = £990 next year
  8. Bank of England.  economist says here

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