Tuesday, 20 September 2011

how I tamed hives - salicylate free

I have recently suffered from quite a serious bout of hives (Acute Urticaria), which has put my health at the forefront of my activities.

My symptoms have been: a rash/raised itchy bumps on my back, upper arms, upper legs hands and feet .

Swelling of my lips and eyes have followed, dependant on what I have eaten.

To say it came as a shock is an understatement, as I have never suffered with any skin condition nor allergy, as I can eat anything and am only allergic to penicillin.

Thus, when the condition began, I did not know how to manage the situation.

Having researched the various on-line sites, it became clear that my skin may have been affected by:
Strong detergents in washing powders;
after shaves and shaving foam;
and deodorants.

The terpenes,limonene and linalool in these products seemed to be initiating a skin allergy, as when these products were removed from my daily routine, the hives subsided.

However, the flare-up continued and I became aware of salicylates and their effect on an individuals' health.

To say that I ate anything, especially processed meats, pickles, sauces and fast-food is an understatement. I did complement this with many fruits and vegetables and ate a balanced diet, even if full of processed foods for convenience.

The hives returned fairly quickly and the swelling of my eyes and lips was getting more frequent.

On investigating the prevalence of Salicylates in food, it became apparent that I was at the mercy of some fairly innocuous foodstuffs.

Radishes,Chorizo sausage,Ibuprofen,processed ham and, amazingly, Brown Sugar affected me the most.

All of the aforementioned are known to cause a reaction if you are Salicylate intolerant.

I attempted to keep the symptoms at bay using over-the-counter anti-histamine but to no avail.

In despair I went to my local doctor, who diagnosed acute urticaria's. He prescribed a steriod, Prednisolone, 5mg, five times a day and an anti-histamine, Fexofenadine Hydrochloride, 180mg, one a day.

An example of this combination happened today, where i mistakenly ate a meal with processed gravy mix on it and sure enough, the hives struck up quickly. This was countered by the above and the hives wen down in an hour

This formula has kept my hives at bay and if I watch what I eat, then I can detect an attack early and take a reduced dosage of steroid, and Benadryl compliments this well.

I am confident that given the plethora of advice on-line and my own efforts to follow a low-salicylate diet will bear fruit and improve my condition.

good luck with yours if you are suffering.

Thursday, 28 July 2011

phone hacking - get £50,000 credit

Many words are grabbing the headlines at the moment. My favourite over the last few years has been 'austerity'. This word has a number of meanings but for me it is enforced or extreme economy.

For me, the current economic conditions are no worse than in the 1980's when inflation was running high, unemployment was high, in the UK

There is a paradox between having what is required, in the form of sustenance, shelter and mobility for living a basic life, as opposed to a consumerist,voracious consumption and false assets accrual, existence.

Opposite to this there is a certain pleasure that I gain in living a frugal life, whilst looking at how others may stupidly get themselves into debt by following populist societal norms, or what are regarded as the norms.

For me, a more pleasurable but old fashioned societal norm is the use of scraps to make something useful that can be used again to  reduce consumption.

e.g. bubble and squeak, bread and butter pudding etc...  if you have a wood burner, roaming local woodland for wind-fallen fuel.

The simple but effective method of frugality has its roots in war-time Britain, when rationing meant you had to make do with what you had.

Thus when I hear people whingeing about having to economise and living without luxuries, then I have no empathy as materialism is the root of the current evils prowling our modern society.

I believe the materialistic mantra has been fuelled by access to easy credit. To prove this, I am going to apply for as many credit cards as I can, without using them at all.

My hunch is I will be able to accrue £50,000 credit in a month.

Thanks for reading

Thursday, 21 July 2011

learn from our past - mend and make do....

The main thrust of my examples of money saving are to ensure best value by researching any spend, and avoiding spend if at all possible.

I have been raised on phrases such as 'waste not want not, and ' a penny saved is a penny earned'. These sentiments may not echo the thoughts of generation Y, who have been raised on terms such as 'disposable income' and 'outstanding debt'.

My point is that it is better to be self-sufficient in your financial planning, rather than rely on the boom and bust model of yore.

It has come to pass that disposable income has fallen, as state spending reduces and both government finances and stock markets struggle to recover from the recent debt crisis.

For me, I can go even lower than my current position if required, i.e live on less income.

In the UK, there is a minimum wage, which if required, I could revert to and live off. This means, that unless I become unemployable, I am safe. This does nothing to support my future financial goals, thus, I save even when income is low.

As previously detailed, this is done by ensuring all income and expenditure is accounted for by roughing it out on pen and paper and sharing the results with all affected family members.

So, it is back to the early eighties with the theme of daily life, I predict driven by the desire to progressively earn more and find ways to spend less.

My list of principles in this model are not exhaustive but give a framework for saving cash:

  1. Shop around, don't impulse buy and use many different outlets for your purchases; 
  2. Don't throw it away if it has extra life by renovation or repair; 
  3. Attempt to buy,shop and 'live' local, to reduce fuel consumption and commuting costs; 
  4. Reduce inventory at home of major purchases such as TVs, P.C.'s, white goods by only having what is necessary and selling the rest to generate cash; 
  5. DIY if you can, save on labour costs and VAT; 
  6. Enjoy frugal dining, learn from Generation X and eat your greens, there is no need to diet if more fresh food is eaten and in quantities that are not excessive (no family pizza for one!); 
  7. Live within your means and ditch credit facilities - wean your self off credit and learn to buy cash or save up for major expenditure; 
  8. Finally, know your financial situation and take action on it.

My model is simple, can be self taught and will last through the boom and bust of personal finance.

Thanks for reading.

Sunday, 17 July 2011

laptops - what is a good price to pay?

Looking at the recent technological developments with the I-pad and products that are similar in nature, it begs the question whether or not laptops are a good buy, at all.

Having researched the markets it seems that initially, I would need to pay £350 for a  decent laptop, and possibly £500 plus for an I pad or similar.I do not need portability so the decision will be for a laptop.

The thing that I find remarkable is the stagnation in the market, there is nothing that jumps out at me that would encourage me to buy right now?? this is a frustrating situation as I want to make a purchase but cannot find a single point to buy from??

The machine I want would be fairly basic but the criteria is Windows 7, 2gb RAM and 300Gb HDD.

The results of my search:

Amazon: Acer Aspire £260

Kelkoo, sorry, too complicated to progress...

PC World :£329.97 ASUS NP-S3510-A02UK

Best buy: - £299 Toshiba Satellite C660-1JR

e-bay- £269 Toshiba Satellite C660-1JR (no returns accepted - so won't go there)

My research thus far leads me to one newcomer to the market, Best Buy, and a trusted supplier, Amazon.

So, a little bit of basic research takes me back to Amazon, who have been great on customer service on everything I have purchased from them, thus far.

Thanks for reading.

Thursday, 14 July 2011

Fight for your rights -don't give up

If, like me, you have dabbled with the excellent e-bay, a a buying ans selling forum, then you will know that some transactions are slightly convoluted.

Having purchased a speaker for a Blackberry phone for my daughter, it didn't work.

I contacted the seller, who agreed to pay a refund. I haven't received this, even though it was promised on the 31st of March, 2011.
It is not my money, it is my daughters, so she asked me to chase it up.I use the government advice, a bit long winded, but it is important to know your rights as a consumer.
This is the site I normally use for advice on consumer rights.


I guess the items are 'not fit for purpose' as they do not work. My next course of action is to contact the seller again, if this doesn't work, then I'll contact e-bay, and if it is not resolved, I'll contact the Citizens Advice Bureau.

The point here is that we have many tools at are disposal as consumers, if we can take time to investigate and  use them.

Thanks for reading.

Insurance premiums, what can be done - £70 price difference

During the course of writing this blog I have looked at many aspects of personal finance.

An unsurprising, but all the same important, eureka moment for me has come at the point when I consider how much I pay for insurance. I have decided to try my hardest at obtaining the best price policies for the level of cover required, which in the past due to time constraints, was a very unscientific process.
By now, you'll know I need to visualise my search for and the costs of insurance this by writing it down:
Car insurance - £1500
House insurance - 250
Life insurance £30
Pet insurance - £12
Total £1792 p.a.
I think it is time for me to take a serious look a t how to buck the system and save money, without compromising on the levels of cover.

I have looked first at my wife's/my motor insurance policies.
In order to ensure that the data inputted is correct, I have checked through my last 5 years policies. I believe this is important to ensure that I get the right quotes, and that I have insurance cover that is legal.
The first variable I found when getting quotes is that all insurance comparison sites are not equal.. firstly from the ease of use point of view.. secondly from the data required and the actual outputs.
Some sites only need your three year, not five year driving history. Some are easier to log into than the others.It is very frustrating if a site cannot be logged into and you password cannot be retrieved....
The resultant quotes were quite surprising....(All U.K. comparison sites)

Go compare £350
Money supermarket £390
Compare the market £ 420
Direct line £1190

These figure were gleaned from inputting exactly the same data in a 2 hour period.

I will ring the insurance companies to check that the data is correct, but assuming I can save £70 on each of the 3 drivers policies in my household, then £210 is not to be scoffed at.

If I can realise the same saving on all insurance policies, then hopefully I can realise a grand total of £251p.a.
Arguably, If I save this money every year before I retire, it gives me £8041 on a 3% compound interest. More money for the pension pot...

Thanks for reading.

Monday, 11 July 2011

Saving power - add £4283 to your pension.

How to save electricity.

One expenditure that is definitely associated with the consumerist society is the consumption of energy.
I will specifically talk about Electricity.
There is a bewildering choice of suppliers and tariffs available in the U.K., when choosing who will supply your electricity, which makes it fairly difficult to establish a base line and always get best value.

Nevertheless, one element of power management that is in the control of all of us is how much we use.

I believe that my families power consumption has been fairly steady and is at a level that is both manageable and affordable.
This situation has been borne out of constant education of and habit forming of each user in our house.
The Thing's that we do to conserve power are:

All external lights are on timers so that they can be adjusted for lighting up time alterations;
Movement sensor lights are set at minimum operation times;
Plug sockets are switched off when not in use, at the wall;
All appliances are switched off when not in use or TVs on standby;
Most of us are out during the day so during these hours and when sleeping, power consumption is set at almost zero, bar freezers, refrigerators;
Any electrical appliances that are purchased are primarily purchased on the basis of economical consumption.
A small saving can be made at night if you cook on a timer, i.e. casseroles or cooking meat if your oven has a timer.

An area where you can proactively save money, is by using cheaper off-peak power at night to take advantage of incentives offered when the National Grid is at lower demand.
We consume a fair proportion, i.e. 15% of electricity at night to make use of the lower tariff, Economy Seven.
The Meter Point Access Number (MPAN) on your bill will also start with '02' if you have Economy 7 already installed.
If you have not got an Economy Seven meter, the process for getting one is to contact your power supplier who may, subject to contractual obligations, replace your current meter with a dual one. The costs involved would need to be balanced with the offset saving of switching to Economy Seven.
The biggest boon for us as a family has been the education received at high school by our children to save energy and conserve resources. This is great.
There are renewable sources for generating power, which I would dearly love to install.
I have looked at investing in solar power, but would require £12k to set up a system. This is not an option until I have the floating cash to purchase the system.

Overall, by using Economy seven, and assuming that I save 15% of my overall consumption, I estimate to save £180 on a £1200 annual bill. If I convert this to compounded payments into my pension, it works out at a gross figure of £4283, assuming 3% interest.
This saving is possible, but only if the times at which you use electricity are adapted to the Economy Seven period.

Thanks for reading and I hope these tips can help you to reduce power consumption.

Mumsnet and the new era organic baby

Having recently had the pleasure of being part of a baby-sitting trio for a relative, it got me thinking?

If I had my time over again, would I be able to do things differently and save money?

Certainly when my children were growing up, I did not have access to the choices parents have now, with the advent of online shopping. Nevertheless, we did a good job as parents in ensuring that our children got the best level of nutrition we could afford.

I noticed one of the meals that the baby was fed was organic. Which normally equates to more expensive.Certainly we could not afford organic products when our children were toddlers.

However, having done a cursory check on baby food prices, I find that organic products, certainly in baby food, are no more expensive.

I used the trusty Amazon site to find the best deal, beating even the supermarkets, if you can get free delivery, and buy in bulk, say 6 or 12 jars.

Prices ranged from £3.51 per kg for non-organic to £9.93 per Kg for the most expensive organic. a middle ground opportunity was in the form of an organic product that retailed at £4.64 per kg.

Now given that diced,lean beef costs £9.94 at todays' prices, then I would as a cost-conscious parent, opt for the middle ground organic product, satisfying price and personal preference criteria.

There are alternatives to even this clear money-saving example.
That is, for children to be weaned on home-grown, home-cooked baby meals. I guess with the right preparation, the right tools and storage options this would be a fun and satisfying way to feed your baby.

If I look at the organic example above, then to make your own from scratch I guess may cost around the same?

If I look at 4 vegetables from the Aldi 79p range, and some budget chicken then I could make 1kg of baby food for £4.2

Arguably, it would not be organic but you could be sure everything you were putting in was of good quality.

Roll on the grandchildren.

Thanks for reading

Sunday, 10 July 2011

when is cheaper better - shaving £16395 into your pension pot

Here is a debate that I recently heard on the radio. Can cheaper be better?

In my experience, yes. A typical example is the use of wet shaving goods.

I have tried many methods of shaving, foil, wet/dry electric and of course the traditional razor.

One thing that I have never done is bowed to advertising pressure and bought into the superstar brands. i.e. those that use high profile sport stars to promote their products.

The reason for this is simple: cost.
I can buy 10, perfectly acceptable, disposable razors for 99p. Possible, I could get them even cheaper.
These razors last for about 5 shaves. I  shave every three days thus the annual cost becomes £33.

If I were to buy a more expensive shaving system, then initial outlay is £30, with 14 blades, refill blades are £6 per 4.. Assuming that I can get 5 shaves per blade, the annual cost becomes £45.

Similarly, for shaving gel I can get shaving gel for £1 at the lower end or pay as much as £5, or £20 if I want mid-range designer???

Consumption of this product runs at about 1 can per month.

Thus, if I were to buy the heavily advertised brands, shaving would cost me £105, but to employ my cheaper brand variety, costs £45 at the outside.

A man starts shaving at 16-ish, with a life expectancy of 86 years, than 70 years of shaving would cost £3150 at the lower end, without inflation factored in, and £7350 at the top end.

A £4200 difference would mean that if I saved the difference, I could add £16395 to my pension pot....

Recognising that this is a hypothetical assumption based on my own experiences.

Thanks for reading.

Saturday, 9 July 2011

How extreme can you be in saving money? retire very early?

How early is early retirement? 18,21,25?

Having recently pored through the thoughts of Early Retirement Extreme, there are questions that can be asked which may be even more radical than the aforementioned model. My basic assumption is that before you can consider early retirement, you would need/I propose you would need £40k. This sum would allow you to live for a couple of years paying rent etc. whilst you establish your new lifestyle.

The process for achieving early retirement, which can only be done if you are willing to address your spending habits and adopt a simpler life. A four stage approach as I see it is as follows:

I have looked at splitting your lifes' expenses down into 4 manageable chunks:

1) Living accommodation:

I haven't searched too hard but, I guess narrow boats and park homes are cheaper forms of accommodation than conventional housing. Your own home could be sold as capital to invest for a regular income.

Given that a park home is around £49k, narrow boats a similar purchase price, then we'll assume either is a possibility. I understand that park fees/mooring fees run at around £200 p.m.

Heating - I personally like the idea of obtaining your own fuel for a wood burning stove i.e. tree fallen, as long as you are not irresponsible, this should be free?

Washing - as the aim would be to break out of the cycle of purchasing consumer goods, I would hand-wash garments, minimising the amount of clothing used.

The furniture required would be less, and the only comforts that I would personally invest in is a computer.

This sets you up on minimum cost housing, with minimum cash tied up in assets.

2) I would ditch all forms of transport that require large capital outlay, except a bicycle, and utilise public transport for travelling further afield.This should release cash tied up in your vehicle(s) for investment
Shopping would be done locally, within walking distance.

3) Release all of your assets and turn them into cash, thus generating a capital amount that can be invested for income and growth. Dependant on your starting point, this rids you of the burden of ownership and should add to your cash pot in the early years

4)  Change the way that you approach life and what is valuable to you.As we are all (or at least seem to be) driven by an incessant need to buy the newest model or fashion/gadget, this habit needs to be broken in the early stages of your quest for freedom from slavery to the salary model. A more self-sufficient style is required to prevent out flow  of, what will be limited, cash flow.i.e.

Can I make it myself?
Can I fix it myself?
Can I learn a new skill to do the above?
Why do I need to purchase this item - will it enhance my life and achieve something or add value?
Can I get a better deal by shopping around?
Whom/what are my finances purpose, to support? me,my partner,my family? or the consumer goods providers and the banks?
Do I/can I account for all of my household income/expenditure?
Can I live on less?
How can I contribute to society and gain personal fulfilment?

I guess that this means that we have to turn our backs on the consumerist society and become more self-centred. It may be a wrench and seem abnormal for people to follow some of the practices (which are not original) that I preach, but from a personal perspective, I hope to consume less, create less waste and contribute more to society by following this approach to financial management.

I will work if I want to and balance my own needs with the financial needs of my dependants.

Follow the process above and you can make yourself an early retirement plan/escape from consumerism..

Thanks for reading

Thursday, 7 July 2011

credit abundance and its' perils

One of the main thrusts of my money-saving extreme model (M.S.ext.), is to 'only buy something if you can afford it'.
I guess most people may have outstanding loans or payments on the bigger purchases in life, i.e. a mortgage and the costs of financing a vehicle?

This I think is inevitable if you want to be a homeowner or own a nice vehicle.

For the rest of you/yourpartner/families spending, does it have to be on credit? and what is its' true cost?

For my own part, I rarely pay credit interest, unless it is very small amounts and it suits my cash flow position.

Hypothetically speaking, it could be posible to generate £40k instantly via credit cards.However, you may be charged around 17% a.p.r. for this credit.
This would take 35 years and 4 months to repay, with total interest and payments of £51784 over the period of repayment.(Calculated via MSE, on an MBNA card)

However, the M.S.ext approach would be:

Do't buy it if you can't afford it;
Why do you need to purchase unecessary consumer goods;
Can you do without and find a free/cheaper alternative;
Is it within your budgetary lifestyle, budget boundaries?.

For those lucky enough to get through the process of loaning £40k on a mortgage over a 35 year period, you would pay £154 per month on capital and interest,  have repaid the capital and got an asset (property) of £112k at the end of the mortgage repayment period, assuming 3% growth p.a.

I rest my case, credit for credits sake is a mill stone around generation X and Y's neck. we have to loosen the grip and break free from these financial constraints and liabilities..

It is in your hands, take action.

Thanks for reading.

Free of constraints - where will it take you??

Whilst growing up, I thought that to live a carefree life would only be possible if you were to have an excessive amount of cash/property/assets. This seemed a Utopian vision that was achievable by hard work, being enslaved to the corporate model and a little luck?
As I quickly found out, greed and avarice fuel the consumerist society and it takes a hard-nosed, slightly tainted and immoral persona to succeed in business, IMHO.
Additionally, unless you follow the path through to higher education, which I didn't, it becomes clear that whatever your talents, it is sometimes who you know, not what you know??

However, as we all mature and get a grasp of what our raison d'etre is, and how our lives are shaped, there are choices we can make that allow us to be more independent of external influences.
As it turns out, less is more. A more frugal lifestyle is easier to manage and maintain than the black hole of progressive spending.

The things that I have personally been able to do whilst living under the banner of M.S.ext is:

To spend more time with my, now, grown up children,  better late than never is better than not at all, as you cannot put a value on the precious time spent nurturing your family, nor indeed the relationship with your partner;

To have more time to pursue hobbies and actually enjoy them without the possibility of 'burn-out' through being over-tired and stressed balancing work and home life;

I am healthier, there is a lot to be said for taking control of your own lifestyle and dictating the pace at which you live;

I have the time to makes clear and conscientious choices and can decide where I invest my time, energy and money based on my own values and experiences.

I hope every-one has the opportunity to sample this heady mix, before they are 66.

Thanks for reading.

Wednesday, 6 July 2011

Living on a meagre income... it's easy

The current economic climate means that we seem to be in a double dip, if not a flat lining, depression of economic activity. This means that we are seeing another round of cost-cutting by all companies. This has forced me to look again at the management of my household finances, but as I  have posted before, this is an opportunity, not a hardship. This is the scenario where M.S.ex comes into its own as we battle economic forces.

I have to make a creative method of generating cash whilst maintaining the income flow from my part-time job, which keeps me semi-retired.

The way in which I will look at this is as follows:

Assess all finances to the nth degree, ensuring that income can cover expenditure;

Generate ideas for cash creation without having to resort to further, paid employment.

Assessing my finances has become easy over the years, as I have only one bank account, shard with my wife, and she has her own.
This makes it easy to check all outgoings, as all non-essential outgoings have been removed.

The figure I would use to ensure a very modest standard of living is £7000 per annul.

This means I have to have an income of £7000 x .25 to cover taxes, i.e. £8750

If I look at my current situation, I can easily cover this.

This may seem rather extreme, but if my income improves, then I Will have more cash to invest for my early retirement goal. If it doesn't, then I know I will still be able to cover my families expenses.

The purpose of money saving extreme, is  to indicate how everyone can get into this position, and protect themselves from market forces/ the consumerist trap.

Thanks for reading.

Tuesday, 5 July 2011

Your Pension Pot - is it enough?

I have always, as discussed in a previous post, tried to take a very simplistic approach to financial arrangements and written things down in order to better understand my personal situation.

When I first paid into a pension, I was working for a company who had no pension scheme, and it came at a time when the second state pension could be opted out of and the regulatory market had changed dramatically.

It gave more personal control over pension arrangements, and possibly like me, many people relied on advice from Independent Financial Advisers (IFA).

This advice was/is not always in the individuals' best interest, only in the interests of the IFA and his/her commission.That is how it seemed to me on reflection of the dealings I had.

The point here is that 'if I had my time over again', I would do things differently. However, not every one makes the correct financial decisions all of the time. So I am stuck with what I have got and have to make the most of it.

In order for everyone to maximise the information available to them regarding pensions, I suggest the following:

Check your state pension entitlement and request a 'state pension forecast from HMRC;

Clarify your company pension status and check if this is going to give you enough in retirement for your projected income (I need to set mine) at retirement;

Include a health check of other pension provisions, such as personal or self invested pension plans and any associated Additional Voluntary Contributions.

This should then give you an overall figure of your worth, in pension income terms, at retirement.

If their is a shortfall consider the following:

Make additional N.I. contributions to gain full qualifying years state pension;

Pay more, if funds will allow, into your company scheme to guarantee maximum entitlement;

Pay more into your personal pension scheme to guarantee maximum entitlement;

For all of the above, I would do the figures first, check your understanding and take this to an IFA for advice.

Be careful to use more than one IFA for guaranteed impartiality. It is as well to read the small print and understand how your pension is being invested.If the vehicle for growth is not rewarding, then consider changing this, i.e. the investment funds, property, markets,bonds,cash etc. You can be part of the decision making process.

For myself, it is a case of following my own advice above and trying to free more of my 'disposable income' to go into my pension pot.

The main challenge for me is to find a method of generating income to fund my retirement with modest levels of income and capital.

my goal this financial year is to add £3500 to my pension pot.

Here goes..

Sunday, 3 July 2011

sound investments... I think

When this M.S.ex has disposable income, spare money, it is invested. I haven't really got past the cash ISA/TESSA stage to be able to invest significant amounts of money in the stock market.

I have savings products in friendly societies (tax free products, maximum investment £25 per month), that have yielded an average return of 4.8 %.
In comparison, the current Cash ISA products have yielded 3% average, but you can invest for 5 years at 5%, on current rates. I am actually wagering at the moment that base rates will rise in the near future IMHO.

So, if these savings are at least maximised, then you will match the friendly society products with the Cash ISA rates, making the most of your tax free allowance.You would be at the mercy of interest rate improvements, so if possible, maximise both.

So, it is safe to say in just comparing 2 products that investing in the stock market is better.
However, family society unit trusts are run by expert investors, who have many years experience of balancing risks versus returns.Thus, even though I follow the mantra of ERE, I am really not a confident investor and would not expose myself to the risk of the stock market unnecessarily. So how do I get confidence?

I have completed a basic fact-finding on investment and it looks like a 'fund supermarket' may be better for the cautious investor, i.e investing in a balanced, medium risk basket of shares.

I have used the guide from Which?, the link is shown below:

Type of ISAValue of £1000 ISA after 5 years
Best-performing UK All Companies sector fund£3000 £3,000
FTSE All-Share Index
£2050 £2,050
Worst-performing UK All Companies sector fund£1450 £1,450
Best Buy instant access
cash ISA
£1250 £1,250

Table notes

Figures taken from 31 December 2002 to 31 December 2007 and include charges. Source for stocks-and-shares Isas and FTSE All-Share Index data: Lipper Hindsight

So, it looks like investing in a basket of shares, if the Cash is available, is the better option.

So, I have to find £10500 to take advantage of the full potential of the UK ISA allowance.

Here goes, I have just found 8p, so only £10499.92 to go....

Friday, 1 July 2011

Save money, wash a car - save £1800 p.a.

There is an argument that if you were to cease doing the menial household chores, then you could pick up more entrepreneurial or profitable pastimes to ensure your time is well spent.

I agree that to spend time making money is better than saving money, perhaps...

Listening to a show today there was a debate about employing domestic cleaners versus doing the housework yourself? I have been raised to only buy what you can afford, and to be self sufficient as far as possible.

Well, I believe that maths is always the best way to prove a point. i.e. make your decisions based on fact.

The cost of reducing household chores i.e. pay someone to do it
Cost of cleaning a car = £6
Cost of cleaning your house = £30
Assuming this is done each week then the sums are:

£36 x 50 (2 weeks on hols) = £1800.

So, to create £1800 clear salary/profit you would have to:

Work for 188 hours at £12 per hour (25% reduced for tax etc.) or:

Generate £18000 turnover -  if the mark-up profit was 10% and to pay salary for the time spent generating the turnover, say £10 per £1000 turnover would be £180.

If you were to invest in shares/stocks, then the £1800 needed to pay for the chores would mean that you would have to own £60000 with a 3% yearly dividend, just to clear this payment.

So it is not quite as easy to say that contracting out your domestic chores is a no-brainer if you look at my figures.

The additional benefits of the examples above are that whilst doing your own chores you are expending energy, thus probably staying fitter.
Consumption is reduced by not having to travel to the car wash, zero conveyance for the contract cleaners.

The final point is that if your house is populated by more mature children as well, then the labor normally comes for free??

Thanks for reading

Thursday, 30 June 2011

Be brave,take control of your finances -DIY

The last time I felt personal concern over the nations' and my own finances was the summer of 2008, when the current depressed economic cycle began.
As I noted in my first post on this blog, in the UK all families will struggle as disposable income falls. A further quoted article seems to back this up.

If market forces are shaping and controlling my spending power, then have a go at stepping to one side and looking at what it is that you can do to affect this situation.
I have posted on the following subjects:

  •  Water consumption;
  • Managing household inventory;
  • Managing your food intake;
  • Managing unnecessary expenditure;
  • Managing motoring costs.
  • Checking tax codes/entitlements.
If you take on board some of my (not new) ideas, then hopefully you will save some money, without too much alteration to your lifestyle. Thus, releasing cash and potentially nullifying the effects of the disposable income crisis.
So, this post is about reviewing your financial status.
I regularly review my families' nett worth. This may not be simple for every body, but if you learn to manage every expenditure then it is easier each time you do it.
My methods are simple, pen and paper, not a convoluted spread sheet. I look at every document with the latest valuation and write it down. e.g.
  • All,outgoings, from any bank statements;
  • Larger spend not on direct debit, i.e. car insurance, car tax etc.;
  • Assumed monthly spend;
  • Assumed household spend on clothes,shopping,schooling,travel and any other expense.
It pays to be absolutely realistic as under estimating gives a false sense of money going out. Even though it may be a shock, write it down.
(This list should give you your outgoings, which is a great time to clear out any unnecessary elements such as 'dead' direct debits or standing orders - gym membership not used, breakdown insurance duplicated, other non-essentials)
Then look at your income:
  • Income, from bank statements:
  • Salary or wages;
  • Tax benefits/child benefits;
  • Other sources.
If then you annualise your spend and take it to a monthly figure then you should easily know your status, outgoings versus income. This gives you and your family the residual disposable income.
It is quite a surprise when the figures are calculated, and more satisfying when you work it out yourself.
I believe if this figure is shared with those directly affected, i.e. partner,family members etc, then every one shares the burden of managing the household finances.
I have a simplistic view on finances, borne out of my early years experiences, thus if I can't afford it, I don't buy it..
Thanks for reading
http://www.telegraph.co.uk/finance/economics/8604128/Bank-of-England-split-on-interest-rate-policy-as-consumers-struggle.html'Office for National Statistics (ONS) revealed that families are under greater pressure than at any time in the past 34 years. Real disposable incomes in the first quarter of the year fell 2.7pc compared with 2010, the ONS said, as inflation outstripped wage growth. '
This sort of report spurs me on to challenge the policy makers and the way in which we are enslaved to the salary model. (see ERE)

Tuesday, 28 June 2011

tax is an issue, check it out for a potential windfall.

I recently had a small surprise, as I had a reasonable tax rebate. I did not initiate the rebate, thus was surprised when it came through.

I am still in employment, i.e. not early retired, so my tax affairs are simple. But, as I have moved from a reasonably paid job to a lower income, my tax codes did not keep pace with the change in circumstances.

I believe there are 'paid for' tax checking services but I would recommend the following link.

This give simple advice on how to check your tax code.

Another tax issue if you have children is tax credits.

I urge everyone to check their annual statement as mine was wrong and I had to call to have it amended, or lose any benefit


Similarly, for a child in higher education, child benefit is still payable until the child reaches 18.

So,I have had to fight to retain these benefits but have not missed a beat since my first child was born.

If you are entitled to it, then claim it. If you don't ask, you don't get.

Keep on Saving.

Monday, 27 June 2011

calorific intake - manage your lifestyle and gain £250 p.a.

I have recently calculated my BMI = 25.65

I have always thought of myself as fairly lean, but not so on the above calculation.

This is/was calculated as a spur to try and stem the swell of my burgeoning waist-line...

The recommended calorific intake is 2550 for a man. I am going for 2000 a day and see what happens.

I guess the theme of this blog is money-saving and I believe it is proven that a leaner, healthier lifestyle is better for you, and I wager, cheaper.I am estimating, £250 p.a. cheaper.

So, what are the things I need to avoid.
Chocolate,crisps,pastries,fried food.This won't be easy.
However, my speciality of eating left-overs or making meals out of 'passed sell-by date' food are almost legendary. It is a criminal waste that food just over the best-by date is thrown. The best-by date is to protect litigation on the part of the supermarket (IMHO), so i wager that if you pass the deadline fr eating by 1 or 2 days, as long as the food is thoroughly cooked then it should be OK. I have had no ill-effects yet.

Also, my waste bin is almost all dry-packaging as almost no food waste goes in, if it does it goes with the organic recycling, so making a more hygenic waste bin.

So, my aim is to limit the amount of hard dairy product, to eat leaner meat and lower fatty carbohydrates. 
I have always eaten home-cooked meals so this will be an easy test, certainly in reducing ready-made or processed food, of which I am to eat zero for a week.

Let's get started.

No crisps/snacks = £2 per week
No chocolate = £2 per week
No fast food meals = £5 per month

Thus, easily making a saving of £268

Sunday, 26 June 2011

cars - rent or buy it's a no brainer - gain £13k

I have often wondered why the cost of motoring is so high and that it is our second biggest capital expenditure after our houses/rent.

I have always bought cars as opposed to renting/lease.This, I think, makes economic sense??
My view on the transportation of humans has changed over the years as I become more aware of the impact of our gas-guzzling on the Earths' natural resource (no global warming argument, just common sense)
I see cars as lumps of recyclable material conveying their passengers to wherever.They are always just junk, some more luxurious than others. But what does a car have to do? Move/convey/start/stop/steer. after this, it is the aesthetics and individual needs, even if they are not really needs.What is worse than moving through a 50 mile commute with all the other rat-racers, jockeying for position. Leave all of this to the heavy haulage truckers, who are actually conveying goods rather than just fresh air.

The sums are fairly easy when considering rent v buy.

So, the maths are:

Buy a new car = £12420assumed on a loan at 7.6% = charge for credit = £1390asset remaining = £5975
loan repayments of £382 per month
true cost =  after 3 years  repayments and interest on loan £13752
The car is the yours and the remaining capital is £5975
So the outlay is high(ish) at £382 per month, but you have an asset at the end.The true cost is the £13752 - £5975/36= £216 p.m.

Lease a new car at £150 per month = £1680 p.a.
3 years = £5850
If you were able to afford to save the difference between loan repayments and lease you would have 36 x £66 = £2376 but with a compound interest of 3% it would equal £2488

3 year total cost example of a purchase at £13752 versus 3 year lease of £5850

If you change vehicle every 3 years then over a 60 year period, without inflation would equal £275040 with £119950 assets over the 60 years when buying. total = 275-119 = -ve loss of £156k
£117000 for lease plus investing the difference would give you £130k  total 117-130= +ve gain of £13k

It seems, after all, that leasing a car is cheaper over a 3 year period.
So, don't buy new... wow! what a difference. You don't get the debt and you have a new (albeit small) car to drive around in.

I'll stick with my purchased car and run it into the ground, then lease.

Bon voyage.

Saturday, 25 June 2011

buy not rent, generate £295000 capital

I have been looking at the sums involved in the equation of rent or buy for the homemaker.

I have been fortunate enough to have lived through the property price boom and seen a £90000 property increase in value to a whopping £450000 in 25 years. by the way, this is not a personal example, just a hypothetical, nominal value. It is actually a good starting point if you were a first time buyer in 2011.

Assuming that you had purchased the property via a mortgage, then it would have cost £90k x 3% interest on the mortgage, i.e.£154,500 over the term of 25 years.

Thus the capital in the property would be £295k at the end of the 25 year period, with the assumption above. Critically, inflation would devalue the capital but it would still be your money.

If, on the other hand I had taken a rental property, then the rental cost would have been £194264 assuming a rent of £500 per month with a 2% annual increase in rental prices, with no capital at the end of it.

So, to buy, even in a depressed market as per 2011, makes sense. If we use the model above, then the £154,500 in mortgage costs could be considered as rental payments, the debt is gone and the capital is yours.

Looking at the worst case scenario, of house prices only went up by 1% each year, then in 25 years the property would be worth £188440 with an investment return of £98440.

I have to find a model that will allow me to purchase property and then rent without having masses of capital.

Anyhow, I have shown that it is possible to generate £295k capital, but it takes a while.....

Friday, 24 June 2011

reduce inventory, generate £1250 cash

There is a school of thought, especially in the manufacturing world, where inventory is a bad thing. That is, money tied up in product or capital asset inventory is dead money and restricts cash flow.

This got me thinking.... how much cash is tied up in an average family home, if you are a homeowner?

A hypothetical example, with all figures estimated shows the value of assets as:

The house itself - £250k
Cars - £20k
Other capital assets- £10k (white goods/garden equipment)
Clothes - £5k
Food - £500
Furniture - £5k
Electricals - £5k (TV/PC/Laptop/Smart phone)
Beds - £2k
Toiletries - £500
Other consumables - £500

Thus a balance sheet of physical assets in the example above is:

This model does not take into account expenditure such as mortgage payments, which are outgoings as opposed to assets.

So, if you can reduce your inventory by 10% on the 'consumables/disposables/durables (lasting > 3 years) ' which equate to £29500 then you could generate £2950 x .5= £1475 assuming you get 50% of the nominal value of the goods.

I know how to generate modest amounts of cash by selling consumables as I have sold >250 items.These were made up of clothing, electrical goods and music/books.  If each item is an average price of £5 then I have generated £1250, which is close to my assumed target above.

So, looking at the items within your house as disposable assets, as an area of financial management, can reap benefits, as you reduce your home inventory and 'goods in hand'.This has benefits inasmuch that the exercise would free up more living space for you/your family/partner.

An additional spin off from this is if you can sell it and somebody else have use of it then it supports the recycling/reusing of articles.I know this would reduce the amount of spend by consumers, but as I have previously mentioned, we are slaves to consumerism and recycling goods benefits more than just the giant retailers.

On a slightly separate note, it got me thinking... the largest slice of inventory is your house... 82.5 % in the example above. I will look into this as part of my new economic model.

Thanks for reading.

Thursday, 23 June 2011

swap shop - increase your pension by £500

Another day, another deal.

I have managed to procure a larger bed for my daughter by trading with a relative. He has got a single, lounge bed, I got a double divan.

Thus, no money has passed to the corporate giants to whom we slavishly consume .
There is value in the lounge bed, but I believe the zero cost transaction is best as the money I put aside for the purchase of said bed, £500, minus the value in the lounge bed, £100 I can now put into my pension.
The idea behind trading rather than using cash obviously appeals as you keep your hard-earned money on your own pocket.

A flip-side to this is the environmental impact of extending the life of goods. i.e. reduced raw material consumption,less energy as nothing new is being made and a reduction in the amount of waste going to landfill/incineartion.

I have decided to look at a new economic model for my families finances as I do not trust the government, of any political persuasion, and the financiers that run the global economy.I am sure that a big default is coming and this will rock the worlds' finances again and we, the minnows will have to shoulder the burden. there has to be an alternative to the systemic avarice and risk on which our hard-earned money is gambled.

I am goingto look at a hybrid model that combines rock-solid guarantess and a partial exposure to markets.

So, £400 goes into the pension and by completing the zero-cost transaction the compound figure would accrue £528
The running total is now £2631 plus the meagre contribution above  = £2632.85

Sunday, 19 June 2011

increase your pension pot by £355 instantly

'Tis a world of temptation and attraction. Want this want that etc... bombarded with advertising we are the age of consumerism. As much as I dislike being in the world of 'spend, spend, spend', I am not tempted by the wish to hock myself to the hilt and then be forever indebted (literally) to somebody else.
However, a trade is a trade. 1p, or $1 or £1 million. all transactions moves things. unfortunately, money oils the cogs of society right now, and as much as I believe in a fair society, money is the driver. I believe in the world economy and in my lifetime have seen the global market place come to fruition and its a wondrous thing.

However, I have asked myself, can this/these transaction be moved in the consumers favour? and save to fund a retirement/other? My interest was initiated by http://earlyretirementextreme.com. This is a good blog and has been thoughtfully laid out. I believe that you can live like this and retire early, but I have a less attractive starting position for three reasons. First, my age, which is mid 40's. Second my net worth. Third, my outlook to risk, which is average/moderate when assessed.

My age and familial responsibilities mean I have to be cautious and not lose all that has been accrued;
My net worth is predominantly in bricks and mortar, thus would need to free this capital up if I wanted to invest heavily in, say stocks and shares;
My outlook is cautious, thus would need to guarantee return, which I guess would reduce returns....

So, what am I doing about it?
first, I am earning. Second I am trying to reduce spending, as wages at the moment are not keeping pace with inflation and thus standards of living/disposable income are falling -
According to Deloitte, one of the leading financial services firms, the average UK household faces a £780 dip in disposable income each year. - https://www.uia-blog.co.uk/2011/05/16/ways-to-account-for-the-disposable-income-dip/

The term - 'disposable income' - suggests to me that the money you have left once all of your financial obligation's are met, is disposable?? disposable being able to be disposed of? I think this term in itself allows us to think of spare money as worthless?

I am a frugal person and wish to save more and invest more of this 'disposable income.
I have no clear plan and/or goal as I am pragmatic and grounded with an aversion to risk.

So, what do I do?
look to reduce on anything and everything whilst still living well? (raises more questions than answers)

Here goes;
Water -  a valuable commodity right now. I save on water usage and consumption by extracting one bucket of bath water to flush a toilet (restroom). May not sound a lot but..
flush toilets with bath water.... saving   1.52p per flush.... 5 per week  = 5 x 1.52 x 52 = £19.76 p.a.
So, I can put £19.76 in a bank account paying 3% and with compound interest would get £471
No. I'll put it in my pension. Seriously, this means that £19.76 multiplied by xx years to retirement = £355 and fingers crossed it would achieve at least 3% growth.

So the real story today is that I have generated an income/saving to put into my pension of £355.

This sum would mean nothing to some people but.. if offered the sum of £355 would anybody, however wealthy, turn it down?

Don't know how but will put in an accumulative total when I can for each of the nuggets I share.


reduce motoring costs, retire wealthier by £334 per year

Tony Hayward rocks... just to show the eccentric Brits can make gold out of a messy sandwich. The ex-boss of BP (Britich Petroleum), has constructed an oil and gas installation procurement/asset purchase enterprise that will make him£14m richer if he secures £8bn of aforementioned. great to see someone that was ridiculed and harangued having the gumption and wherewithal to bounce back from a very difficult period.

Which brings me to the next extreme money saving. Driving a vehicle is a necessary evil in this age, although many would argue this point, I am sure. I am forced to use my car to travel to and from work, thus one of the biggest items of expenditure  for me is fuel. There is a very simple method of saving some money which is to look at the petrol prices whilst driving. I have seen a difference of up to 6p per litre in my local area. I think that if you want to save yourself a few pounds then it is worth putting in the effort to find the best value at the pumps.

I will realise a cost saving of £334 p.a. if i save 2p per litre on my annual consumption.

There are many other factors in this equation i.e., purchase a smaller, more economical car? a hybrid, which are expensive or as mentioned, switch to public transport.

Another thing that bothers me is the cost of servicing.
An average service on my car would cost at least £180.
If I price up the spares required (oil filter,air filter,fuel filter - £30, £14 spark plugs, £17 for oil) for a service then they equate to £61 which means i am paying £ 120 for labour
The manufacturers recommended service is 60 points check and as I read it the only technical job is diagnostic testing.

So, i will ring my local servicing mobile technician and ask if I can do part of the service and he stamps the book?
This means I get a service and he gets business.

I save approx £50 on servicing. thus, I save an extra £50 p.a.

Thus, £384 to add to pension pot.

Compound interest and years to retirement would give me £6912 cash or  £9137 at 3%.

Happy motoring....

Saturday, 18 June 2011

save water, top up your pension by £377

A pension, who needs one when I/we are saving so much money to put into our own personal pension plan ha ha... The government can do what they want, we are immune from their meddling.

Here is another EMS to help the needy (me)

If, like I, you are a habitual tea/coffee drinker, then you probably spend a lot of money on take out or vending machine hot beverages.Now I do not buy the expensive coffee house Latte/Cappuccino etc.. but I do like a decent beverage.

I decided that this is a waste of money as it is just a habit rather than a necessity, as we could all live off just water.Why do we drink tea, I guess it is a social norm knitted into the fabric of British life. So when did it start? I look to the UK tea council for inspiration..
'There are various legends surrounding the origins of tea. Perhaps the most famous is the Chinese story of Shen Nung, the emperor and renowned herbalist, who was boiling his drinking water when leaves from a nearby tea shrub blew into the cauldron. He tasted the resulting brew, and the beverage of tea was born. An alternative story claims that links tea drinking to the Indian prince Bodhidharma, who converted to Buddhism and in the sixth century and went to China to spread the word. He believed that it was necessary to stay awake constantly for meditation and prayer, and took to chewing leaves from the tea shrub, which acted as stimulant, helping him stay awake. (An alternative, more macabre version has Bodhidharma accidentally falling asleep, and upon waking cutting off his own eyelids in disgust at himself. He threw the eyelids away, and from them sprouted the first tea shrub.)'

Amazingly the British Tea Council have an online rolling estimate of the number of cups of tea drunk per day and they put it at a staggering 8.1 million.

 It seems that we have been fed advertising and are attached to social norms that mean we are obliged to drink tea/coffee. I am sure there is research that identifies the link between advertising and behaviour. Although your own experiences and up-bringing play a large part in your choices as an adult.

I have roughly calculated my own spend on vending, spend on soft drinks, to calculate a saving.
I decided that to assist in my own cost-reduction quest, I would stop drinking from vending machines, take squash as an alternative to soft drinks and re-use tea bags. The re-use of tea bags comes from the fact that I drink a cheaper tea, others drink higher quality tea. By chance, I made a cup from two 'used' tea bags and it was a good strength, possibly 80% of the original strength of virgin bags.Perfectly acceptable.

Reducing spend on vending is easy, take your own if you have access to boiling water and make it at work or wherever you are.Alternatively, take the ready made Latte etc...
Soft drink reduction is also easy, this comes from life experience.. drinking water from the tap has to be good for you, no? we have paid for the cleaning and processing of our water, why should we not drink it from our household source, the tap? I have read that exposure to tap water lessens the risk of contraction water borne diseases such as cryptosporodiosis as tap water is not pure (read) http://dwi.defra.gov.uk/research/completed-research/reports/DWI70-2-255-exsum.pdf and builds our own immune system. So to take a bottle of made-up squash from concentrate is not such a hardship.

saving p.a.on tea bags would be £13.61
saving on vending would be £208
saving on soft drinks purchase £156
Combined reduction by reverting to cheaper alternative would be £377.61

as normal if this was compounded it would equate to £6795.36 without interest and £8983 with.

So, I can add £6795 to my pension pot straight away....

if all the tea drinkers in the UK did the same... £4580000 into the coffers of pension providers or £108 million with compound interest.

My own personal running total to add to pension coffers is...£1890 & £377 = £2267

Thursday, 16 June 2011

reduce consumption, increase your pension by £1555

Has anybody else been subjected to the downtrodden/sombre/listless customer service department of the big two supermarkets? Whatever happened to the customer being king?? These guys and girls could do with a few lessons in how to win the hearts and minds of customers by being friendly and attentive.  That is my gripe for the day....
Now for the money saving bit....
As the headlines have shown,
consumer spending has slowed on food recently as we all tighten our belts.
This, of course, makes the need to spend less and preserve cash paramount in the daily grind of balancing finances.

Having observed my wife slave over the washing basket each week, I have consciously tried to produce less washing. This has added benefits, such as reduced water and power consumption, reduced wear and tear on the washing machine, longer clothes life and ultimately a saving in monetary terms.
If I reduce the number of pairs of jeans going into the linen basket by 7 pairs, I have calculated that this would save me £7.2 per month on water consumption and electricity costs.If we extrapolate that amount it becomes £7.2 x 12 = £86.4 p.a.
If I calculate that as a saving between now and when i retire then it becomes with an assumed rate of interest on the money of 3% it becomes £2056
Thus I could add to my pension pot a sum of £1555

The way in which I have reduced consumption is by wearing clothes 1~2 more days than normal, in some cases up to a week more. Lets face it, if you are not doing athletic activity then why should your clothes smell if you wear them for a week? Again, I draw back to the suggestion that consumption is the driving force in our society, but I believe the same consumerism forces will re-draw the societal model and we will have a more frugal and sustainable lifestyle.

As a running total now this would mean a figure of £1890.

And on a final note for today, the downturn in sales at the supermarket tills can only be good for us... the big boys will have to reduce their prices to generate more volume. This may mean less money for the supermarket worker or supplier, but hey, we are in a frugal world now..