Household finances voyeurism

[Globalti]

My God, that McConnell family featured in the article have a profligate lifestyle. Drinks, meals, cinema, sweets, treats... I'm agonising about spending a couple of quid on some shoe laces this week.

 

[The Jogger]

There are two of us at home and our food bill not including buying sandwiches etc for lunch is about £160 a week, I don't think that is normal.

 

[brand]

[QUOTE 3595625, member: 9609"]I do wonder if these regular savers are worth the bother svae 25 a month for a year is only going to raise £8 in interest, then you have to set the account up and then close it down, thats a lot of hassle for £8.[/QUOTE]
Most are done over the internet. The 6% works out at £87 after tax (,I think) and it is not my money. The 5% works out at (depending on the gap between taking out and paying in )at about £5.50 a month using someone elses money. The 3.75% is for savings up to £20,000 of normally someone else's money. Presently I have done a balance for on one credit card at 0% interest and 0% fee. Meaning I am leaving my/their money in 3.75% for an extra 15 months.
I am not sure where you the £25 a month for a year from I have never ever seen a regular saver account that limits you to £25 a month?

 

[brand]

Personally, I'd go for long term bonds but with inflation so high at the moment, you'd barely scrape even.

I think you need to check your figures on inflation.

• The Consumer Prices Index (CPI) grew by 0.3% in the year to January 2015, down from 0.5% in December 2014.
• In January 2015, the 12-month rate for RPIJ stood at 0.5%, down from 1.0% in the year to December 2014.
  
• RPIJ is the retail price index adjusted to meet international standards.

Under any measure you are way of base with your view on inflation. Any inflation in an economic revolution has to be "acquired" an example being the printing of money a highly inflationary measure. Yet inflation only reached 5% a ridiculously low amount considering the amount printed. This is not a statement that inflation must remain low OR EVEN NEGATIVE (I know an oxymoron) just that its natural figure should be very low.
Reference funding circle I received an actual annualised return of 9.4% after bad debt.
I invest for my daughter at the moment her return is
Gross yield:
9.9%
Annualised return (after fees and bad debts):
13.0%
Estimated fully
diversified return (after fees and bad debts):
7.5%

 

[Turbo Rider]

I think you need to check your figures on inflation.

• The Consumer Prices Index (CPI) grew by 0.3% in the year to January 2015, down from 0.5% in December 2014.
• In January 2015, the 12-month rate for RPIJ stood at 0.5%, down from 1.0% in the year to December 2014.
  
• RPIJ is the retail price index adjusted to meet international standards.

Under any measure you are way of base with your view on inflation. Any inflation in an economic revolution has to be "acquired" an example being the printing of money a highly inflationary measure. Yet inflation only reached 5% a ridiculously low amount considering the amount printed. This is not a statement that inflation must remain low OR EVEN NEGATIVE (I know an oxymoron) just that its natural figure should be very low.
Reference funding circle I received an actual annualised return of 9.4% after bad debt.
I invest for my daughter at the moment her return is
Gross yield:
9.9%
Annualised return (after fees and bad debts):
13.0%
Estimated fully
diversified return (after fees and bad debts):
7.5%

Inflationwise, you're on sticky ground. Yes, January was low (0.3%) and yes, negative inflation is predicted due to falling utility prices...but if you take a look at the following chart, you're making large predictions for the whole year and from a historical perspective, what I say is true...runs jan to dec and the final figure is the year end...2014 was an exceptional year and 2015 may be even more so...but then you're bracing yourself for a potential bounce...either way though, investing in a bond will still not earn you a fortune...though you will scrape a profit...and yes, I know you're doing well at the moment and I'm nobody to tell you how to invest, especially as your doing so well out of it, but personally, investing in a funding circle would not be an option. I just don't like risk like that and you don't even have FSCS protection. To be getting that high a return, you're in the highest risk category. If you have that capacity for loss then I'd 100% advocate it and you seem to, so well done

2015 0.3%
2014 1.9% 1.7% 1.6% 1.8% 1.5% 1.9% 1.6% 1.5% 1.2% 1.3% 1% 0.5% 1.5%
2013 2.7% 2.8% 2.8% 2.4% 2.7% 2.9% 2.8% 2.7% 2.7% 2.2% 2.1% 2% 2.5%
2012 3.6% 3.4% 3.5% 3% 2.8% 2.4% 2.6% 2.5% 2.2% 2.6% 2.6% 2.7% 2.8%
2011 4% 4.3% 4.1% 4.5% 4.5% 4.2% 4.5% 4.5% 5.2% 5% 4.8% 4.2% 4.5%
2010 3.4% 3% 3.4% 3.7% 3.3% 3.2% 3.1% 3.1% 3% 3.1% 3.2% 3.7% 3.3%
2009 3% 3.1% 2.9% 2.3% 2.2% 1.8% 1.7% 1.5% 1.1% 1.5% 1.9% 2.8% 2.2%
2008 2.2% 2.5% 2.4% 3% 3.3% 3.8% 4.4% 4.8% 5.2% 4.5% 4.1% 3.1% 3.6%
2007 2.7% 2.8% 3.1% 2.8% 2.5% 2.4% 1.9% 1.7% 1.7% 2% 2.1% 2.1% 2.3%
2006 1.9% 2.1% 1.8% 2% 2.2% 2.5% 2.4% 2.5% 2.4% 2.5% 2.7% 3% 2.3%
2005 1.6% 1.6% 2% 1.9% 1.9% 1.9% 2.4% 2.3% 2.4% 2.3% 2.1% 1.9% 2%

 

[brand]

Inflationwise, you're on sticky ground. Yes, January was low (0.3%) and yes, negative inflation is predicted due to falling utility prices...but if you take a look at the following chart, you're making large predictions for the whole year and from a historical perspective, what I say is true...runs jan to dec and the final figure is the year end...2014 was an exceptional year and 2015 may be even more so...but then you're bracing yourself for a potential bounce...either way though, investing in a bond will still not earn you a fortune...though you will scrape a profit...and yes, I know you're doing well at the moment and I'm nobody to tell you how to invest, especially as your doing so well out of it, but personally, investing in a funding circle would not be an option. I just don't like risk like that and you don't even have FSCS protection. To be getting that high a return, you're in the highest risk category. If you have that capacity for loss then I'd 100% advocate it and you seem to, so well done

As I said inflation is very low and there is no reason to believe it will rise. The bank of England purchase of bonds with non existent money requires them to sell them again to balance the books, an inherently recessionary (deflationary) policy. Which will probably never or not for long time happen.
You state that the inflation is expected to be negative because of utility prices falling but that is what inflation is about.
You are also predicting inflation based on the past as I am doing. But unlike you I am using long term historical data for all economic revolutions Agricultural Industrial Transport and now the computer revolution. All have the same thing in common, the ability to make goods cheaper (or to transport them cheaper!).
Only shocks to economies can result in higher inflation during an economic revolution. For instance the OPEC oil hike. I have only one other worry and that is food prices, so as a Malthusian I will be growing more food each year!!!

 

[brand]

[QUOTE 3595749, member: 9609"]I need to be less dismissive of these, as you point out first direct are offering 6% on a regular savers with a max of 300 a month. and that should work out about ££80 more than having the money in say a short term bond paying 2%
£80 is EIGHTY QUID (think of 8 ten pound notes) Thats worth an hour setting it all up.

I just wish they would let the regular savers account roll on instead of having to start again every year[/QUOTE]
I am afraid you have to move banks to First Direct to get the 6% (and £100 for moving) the 3.75 Yorkshire is only available to those who had the foresight not to close it down 12 or more years ago when better deals were available. I love the Max of 20,000 if only had £20,000. The 5% from TSB is very good as you can stick the whole £2000 in at once. Set up 2 standing orders one from and one to. No work involved once done.

 

[MarkF]

There are two of us at home and our food bill not including buying sandwiches etc for lunch is about £160 a week, I don't think that is normal.

We spend about £80/100 (max), that's including daily sandwiches for 3, and that is for 5 of us!

We eat well and very healthily, no ready meals etc. I think cycling helps, we don't do a big food shop, I cycle several times a week to buy food and on a weekend my wife joins me for the fruit & fish purchasing in Leeds market. We don't appear to have any food waste.

 

[Turbo Rider]

As I said inflation is very low and there is no reason to believe it will rise. The bank of England purchase of bonds with non existent money requires them to sell them again to balance the books, an inherently recessionary (deflationary) policy. Which will probably never or not for long time happen.
You state that the inflation is expected to be negative because of utility prices falling but that is what inflation is about.
You are also predicting inflation based on the past as I am doing. But unlike you I am using long term historical data for all economic revolutions Agricultural Industrial Transport and now the computer revolution. All have the same thing in common, the ability to make goods cheaper (or to transport them cheaper!).
Only shocks to economies can result in higher inflation during an economic revolution. For instance the OPEC oil hike. I have only one other worry and that is food prices, so as Malthusian I will be growing more food each year!!!

Growing food sounds like the best thing indeed As for the rest...huge stock market crash predicted in 2015...losses of up to 90% predicted. Effect on inflation debatable.

 

[brand]

I forgot to say @Turbo Rider that the investment I made for my daughter in funding circle are made up of nearly all A+ loans only 1 C and a couple of A. I have to date only invested £1300 of £2000 of my daughters money.
As I introduced her to funding circle (I have a dormant account there) she and I will in a few weeks time get £50 each. I have yet to decide on wherever I should give her my £50! ...no chance.
Note i have a way of investing in funding circle which should guarantee you higher returns. Also remember that one of the returns quoted is based on you having a expected bad debt not an actual bad debt, based on estimates For instance a C- loan has a fully diversified estimated bad debt of 5% while an A+ has a only a 0.6% estimated bad debt. If you take the fees (1%) and the estimated bad debt away from a bid of 7.6% on A+ loan you should get 6%. A C- requires you to bid 12% to get the same....assuming their estimates are accurate?
I would expect in a recession the C- to rise dramatically while A+ to remain stable.... could be talking bollocks there?
If you are aiming for a fully diversified portfolio then Funding Circle could play a small part in it. Small being the optimum word.

 

[brand]

[QUOTE 3595749, member: 9609"]I need to be less dismissive of these, as you point out first direct are offering 6% on a regular savers with a max of 300 a month. and that should work out about ££80 more than having the money in say a short term bond paying 2%
£80 is EIGHTY QUID (think of 8 ten pound notes) Thats worth an hour setting it all up.

I just wish they would let the regular savers account roll on instead of having to start again every year[/QUOTE]
You can also think of them as rainy day fund. In an emergency the loss of interest won't matter if you don't have to borrow money at high rate.

 

[brand]

Growing food sounds like the best thing indeed As for the rest...huge stock market crash predicted in 2015...losses of up to 90% predicted. Effect on inflation debatable.

Not a chance of 90% fall in the stock market. Effect on inflation is not debatable a fall of half that amount will result in reduced spending IE a drop in inflation to a minus.
The US suffered most in the depression:-
"After October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929"
So an 80% fall over 3 years in what can only be described as the worst depression ever and any country. Note what was considered one of the major causes of the depression was not the fall in the stock market but the tightening of the money supply. Note just what a huge increase the US applied during the recent recent recession?

 

[brand]

Pigeon for dinner shot through the window for 2.75p pellet cost including allowances for misses. Good value...not sure..the investment cost of the air rifle has to be taken into account.
Investing to save may actually beat most savings accounts. My Rohloff equipped bike is not just a joy to ride I reckon to make my money back on wear and breakages. I am very good at the latter.

 

[Markymark]

I've got more money than sense.



Please feel free to post the obvious response.

 

[Turbo Rider]

Not a chance of 90% fall in the stock market. Effect on inflation is not debatable a fall of half that amount will result in reduced spending IE a drop in inflation to a minus.
The US suffered most in the depression:-
"After October 29, 1929, stock prices had nowhere to go but up, so there was considerable recovery during succeeding weeks. Overall, however, prices continued to drop as the United States slumped into the Great Depression, and by 1932 stocks were worth only about 20 percent of their value in the summer of 1929"
So an 80% fall over 3 years in what can only be described as the worst depression ever and any country. Note what was considered one of the major causes of the depression was not the fall in the stock market but the tightening of the money supply. Note just what a huge increase the US applied during the recent recent recession?

Latest predictions for the US are an upcoming crash with the effect being a 90% drop in the value. This from leading economists. The reason for the effect on inflation is that inflation rarely goes negative...i.e. it doesnt give back...it has happened, but it's very very rare. So when inflation goes up again and you still have the £1 you had when it flattened, it then compounds and eats into your money. In times of crisis, you also sometimes get quantitive easing which further dilutes your money, so the knock on to inflation is all there.

[QUOTE 3595906, member: 9609"]The trick is to achieve a higher rate of interest than inflation, when we decided to retire in 2008 it was very easy to achieve 4 to 5% above inflation. In fact I based my sums on 4% and predicted we would run out of money at age 88 - a month after we sold up the the world economies collapsed (i never thought the loss of our little business would have had such a monumental global financial effect) And the resulting years of greater inflation than interest, and the fact we are spending at a higher rate than expected - I am now predicting running out at about 73 - 75 which is a bit worrying.[/QUOTE]

And it's a very hard trick to pull off in real terms...because you're eating into your units of currency, so if a dip happens during any period, it's not good. Might be time to consider an annuity if you're worried. At least that way, you get a fixed income.