The Good / Bad News

The Good News:

I have been slugging away on getting garden chores completed as I get ready for the removal of the council garden collection service at the end of the month. I know – not really an FI thing as such – but it is a frugal living thing! Why pay £40 pa when you don’t need to? It’s free therapy too.

I am nearly there now and ticking off the items on the to-do list quite swiftly. Its been good for my sanity too as the workplace is a real bind at the moment. Basically office politics is flying around big time with anger, frustration and back-stabbing going on. This just spurs me on to achieve FI and be able to walk away from all this stupid nonsense once and for all. I was on the receiving end of anger and frustrations last week just because I was given the short straw of delivering bad news, I was presented to the firing squad and bombarded with barbed words and fury. I am alive and still with a job at the moment.

Ah,well back to the garden and watching the lovely robins that are currently residing in the trees. I have planted up the free seeds I have received from the Woodland trust and have planted up all the herbs and chillies to supply flavourings for my food creations this year. I have stored a load of chillies from last year’s plant so if this year’s crop is as big as last year I will be onto a winner.

The Bad News

The budget – I have avoided the news this week and have now just caught up by reading Monevator’s post on the budget. What I wasn’t aware of is the change in Dividend Allowance. I heard all the noise about self-employed NI but not this sneaking in. I am affected by this as I do generate £6k of dividend income outside a tax wrapper. Its basically, my old employer’s shares which I have kept. Up to now this hasn’t been much of a problem. I was accepting of the £5k limit for this tax year – but going down to £2k is not so good. I cannot sell down the shares fast enough without incurring CGT. I should have sold the shares and diversified earlier but  have been nostalgically holding on to them as they have been providing a good return, 4%+ over the past 3 years as well as good double-digit growth and funding my  6 month job-free gap.

I just need to offset this with changes in other areas and sell some and move this into my SIPP. I was reluctant to do this as I cannot then access their value again unto I reach 55. That’s the government for you, they mess up the savings rates then as people move into shares, they increase the taxes on that too.

It’s like diesel vehicles – OK, ignoring the air pollution bit for a minute – years ago, diesel fuel was considerably cheaper than petrol to buy and the MPG gap was considerable so for those travelling high mileage each year, a diesel car was a no-brainer choice. Diesel cars held their value due to this too. Petrol cars were for the city types/short distance commutes and diesels for those who travelled longer distances. Move on a few years and diesels were promoted heavily to everyone and the volumes on the roads grew until every city is full of them – and being used or short distance trips. As promotion of diesel continued, the price of diesel spiralled upwards until it is now priced higher than petrol and the MPG gap has narrowed substantially. Thanks to all that recent news coverage on air pollution, anyone with a diesel car is now suffering a loss in resale value and being seen as a bad citizen. They have been stung by the hype. If you now look at buying a hybrid or electric car -watch out as that is the next spin and hype zone ready for reaping in a few years time when it has reached a good ‘market value’.

Enough of my ranting and off to do some more chores while the rain has stopped.

Are you better off than your parents?

This is the question being asked on Radio 4 this week (You and Yours programme).

An interesting thought given the current economic climate. I am in my forties and with no children I can only review the generations around me in my family.

As the “child” – I am better off than my parents, they live in rented accommodation and have struggled as one of the many working poor, bringing me and my siblings up in a rented house with limited cash. We tried our best to have a happy childhood, although compared to expected living standards today – it was below the poverty line. (We had friends who were living on benefits – and they had a better life than us! I am sure that there are more families living like this now)

My father had to pay maintenance to his first wife after their divorce, which meant that cash was tight. He had to support the mortgage on the old house, so he could only afford to rent from that point onward. The house we rented was damp and cold, a pre-fab built with asbestos. It was all my father could afford. We use to get up on a winter’s morning to ice on the INSIDE of the windows as well as the outside. Mould and damp on the inside walls. We slept in sleeping bags and loads of blankets on the beds and lived in hand-me down clothing and school uniforms. We lived in the kitchen as it was the warmest place in the house.

I remember being an outcast at school, as I had bad clothing (it didn’t fit me very well and would be handed-down to my sister). We would have to wear our school uniforms all week (glad we had uniform as at least that stopped the ‘fashion’ police bullying) as we only had one set of clothes, so would have to go home and change out of it and hang it up to air so we could wear it the next day. No wonder it was smelly at the end of the week and I had no friends. My shoes were always too big for me, as they had to fit me and my sister/mother who had bigger feet.

We lived off beans on toast, soup and other basic meals all week and our treat was a roast chicken on a Sunday with whatever vegetables we grew in the garden. We entertained ourselves with rides on our bikes and anything that was free. No cinemas and take-out meals for us. My parents now live off state pensions which although they are no great – they at least have one and can ‘manage’.

I was lucky because I passed the 12-plus as it was then and attended the grammar school, this was my route out of poverty. I gained qualifications and due to a ‘free grant’ I was able to go to university and obtain a degree.

I was able to get a good job and have since tried very hard to work to gain some financial security and stability in my life. My siblings have done the same, working and owning houses and working towards their own financial security.

As the “parent” – Although I am not a parent, I have friends with children and I can see that this next generation do have big hills to climb. When I came out of university, degrees were an accepted way of getting up the career ladder and open up opportunities for higher paid jobs, there weren’t that many of us. Now, everyone seems to have a degree and so there isn’t the graduate openings there, completion is so fierce that it is now likely that your first job is a low-pay one. Likely that it will continue to be a low-pay one too. You have a student loan to pay off . There is a big deluded view of degrees now and what they will provide. You cannot just go straight into a chief exe job – but that seems to be the impression. It is not the golden ticket to a well-paid job, using the terms of today “its down to supply and demand”.

The ability to own a house is a struggle unless you have parents who can contribute. Jobs are temporary – fixed term contracts, zero-hours contracts. Being treated badly(being laid-off easily) and having no career development prospects within the same company. Outgoings are high and the ability to save a deposit and also gain a mortgage with fixed-term contract employment is hard.

Yes, this generation have technology, more freedom and flexibility. They can travel the world more freely and experience things that I or my parents would never have the opportunity to at that age. But opportunities actually seem to be more restricted and their work life will be longer and lower paid than the previous generation.

More reason to look at FI and frugal living and getting out of the consumer economics that is slowly degrading life, pleasure and happiness. I am glad I am not  a teenager now, opportunities seem to be lacking or only open to those with the network contacts. Pay is low, jobs scarce and short-lived. I would not be able to achieve the financial status that I have now.

I feel blessed that I can live and have achieved what I have to-date.