Inflation - time to do some sums

I wish people would pay a bit more attention to the figures.

As of 18th October 2011 inflation is 5.2%. This means that something that cost you £100 in October 2010 (a year ago) now costs £105.20.

The Bank of England tells us inflation will be only 3% next year as if that means prices will be coming down. They're not - it just means they will have gone up slightly less than this year.

So in October next year the thing that cost you £100 in 2010, £105.20 in 2011 will now cost £108.35. Unless inflation is less than Zero prices have gone up compared to the same period the previous year.

Or put another way if you were earning £25,000 in 2010 you'll need 27,000 in 2012 just to stand still. If you don't get a rise how do you think you will cope with a loss of a months wages?

Even 2% inflation means you are loosing a weeks wages every year.

Jobs - what jobs?

Not a reference to Apple, just a link to the real world.

The blunt news is that there are no jobs. Zip, rien, nothing. If you are in the white collar sector a computer has your job. If you are blue collar a foreigner has it.

It's not going to get any better any time soon.

You can only compete with the rest of the world if you have something to sell them that they can't do themselves.

Nope, I can't think of anything either.

CLOUD = Complete Loss of Your Data

OK, bit of a stretch on your but you get the picture.

As lots of Blackberry users have just discovered reliance on an external supplier is not necessarily a good idea.

A RIM Server goes down and takes out the system. Chances of recovering the huge amounts of data whilst maintaining service are not high.

Once a big on-line system is broke it is very difficult if not impossible to fix as you are trying to add new transactions to possibly corrupt data.

Ask the Inland Revenue.

BTW, I will claim copyright on the Complete Loss of Your Data phrase as I I fear it will be in increasingly common usage.

Changes...

Necessity may be the mother of invention but discontent makes the world go around.

Without a niggling feeling of general unhappiness with out lot most people would do nothing to change their lives.

If you are fed up with the weather in your current area you can choose to just accept it, constantly whinge about it or do something about it, which will most probably result in moving to another region where the climate is allegedly more in line with your desires.

The accepting types form the stoic background of our societies who can be depended upon to quietly accept whatever iniquities whoever is currently in power decide to burden them with, just don’t expect much from a group who are largely content with a nice comfy pair of slippers and a yellow cardigan with leather buttons.

The malcontents are frankly just a pain in the backside. Meet them in ten years time and they’ll still be going on about the same objects of their discontent but with some embellishment as to why they haven’t actually done anything.

Those who actively make changes in their lives for whatever reason are the drivers of the world. They make something happen. The “something” may not always be the desired result but without it we only suffer from stagnation.

In a perverse way it is probably the plodders who are most content in life. Those seeking change are quite likely to be always looking for the greener grass. The knowledge that you can change your world is a powerful and sometime destructive force.

Pension off the Pension

If you are employed by the state don't read any further. You still will not appreciate what a good deal you have and how much you annoy everybody else when you complain about your pension.

If you are a banker or one of the few who still have a final salary pension you should probably also look away now.

Still here?

OK I'll assume you are one of the poor unfortunates in the Private Sector who have been consistently shafted by the pension companies, banks and the government in no particular order.

Fact is most people in the private sector don't have a pension or at best have one that is worth around £20,000 which is pretty much the same as not having a pension.

But let's say you are fortunate enough to have £100,000 in your pension "pot". Sorted right? Wrong. You'll be very lucky to get a £100 a week when you retire.

That is of course assuming your pension fund hasn't just lost 20 to 30% of its value because the stock market has gone down (again).

What can you do?

Pretty much buggar all if you already have a pension fund.

Try to move it to a Sipp with the lowest charges you can find. Do not under any circumstances go anywhere near the rapacious individuals known as Independent Financial Advisors who for a mere 2 - 3% of your fund will advise you where to lose your money. even with inflation at 2% that would mean your £100,000 becomes around £95,000 in real terms over a year (charges + inflation) so if you put in a £100 a week (£5,200 a year) you are just standing still.

Look at it this way. The country is broke. Your pension fund is used by the markets to their advantage, not yours. Governments will find ever more inventive ways of taking your money. Even when if) you retire you can only get 25% of your own money. The rest you have to bet against an insurance company as to how long you are going to live.

Save by all means, but save it under your control. Then you can invest in what you like, spend it if and when you need to and it's not likely to do a disappearing act at periodic intervals.

Unless of course that you think endowment policies were a good idea along with every other financial product you have been stitched up with over the years.