A couple of weeks ago I posted the article KISS Investing for Retirement. This looked at what I believe was a simple strategy to achieve financial independence. The first point, which was simply Start, really rang true this week when I read the BBC article Pension Planning ‘Inadequate’ Among Over 50’s. The article itself wasn’t the kicker for me as it was essentially just an advertisement from the National Association of Pension Funds. The bit that made me think was reading some of the comments.
If people are to Start down the road towards achieving financial independence then they must first stop acting like victims and must stop blaming others. Instead they need to start taking responsibility for their own actions. Of course it’s easy to play the victim because then you don’t have to change your ways and can keep your head buried in the sand. Let’s briefly look at a couple of the 378 comments that this article received. (Full disclosure: I only read the first page of comments by which time I was shouting take some responsibility at my laptop screen so loudly I felt it prudent to stop reading)
Comment 1 had us off to a great start by stating “Having been severely burnt by Equitable Life, and having seen other investments severely limited by commission hungry 'Financial Advisers', I doubt that I am alone in having given up on trying to fund a private pension for my retirement. We seem to be in the hands of thieves and robber barons and I see no escape until death.” A great example of playing the victim and to make matters this comment received a +22 Rating. How about taking some responsibility and making some changes to how you think. A good start might be I won’t be burned like Equitable Life again, instead I’ll diversify my investments both in terms of asset type and investment provider, that way I might take a setback if an Equitable Life occurs again but it won’t destroy my retirement planning. Then do something about those commission hungry financial advisers. I’ve shown in the past how you could run a pension for 0.56% per annum with only £10,000 invested down to as low as 0.19% with £500,000 invested. Of course this route requires some work and some responsibility.
Comment 2 stated “This is no surprise as the Government and Bank of England are making it impossible for anyone to get a decent return for their life savings.” Really? I don’t see the same thing. The Retirement Investing Today Low Charge Portfolio has shown a Personal Rate of Return of 7.6% this year to the end of October. When I update it next week to include November it will show an even better return. Sure inflation has eroded some of that but even allowing for inflation the Real Return is still 5%. That’s better than the Real 4% return that I personally need to achieve Early Retirement.
Comment 7 was really emotional with the statement “By the time we've paid income tax, NI, mortgage, service charges, council tax, fuel tax, fuel duty, car insurance, food, water, power, all of which are going through hyper inflation levels of price rises, combined with a minimum of companies giving pay rises at all, most people can not afford to put into a pension. ...” Nobody’s forcing you to have a mortgage. You could rent a place that suits your needs like I currently am. The savings I make by renting a smaller place instead of buying a forever home could then be put into some retirement savings. Alternatively you could just take a mortgage out on a smaller place. That would also save you service charges, council tax and power costs. On the topic of power costs you could also turn the heating down and put on another layer allowing you to save a bit more. You could offset some of that Fuel Duty by walking or cycling a bit more which would also increase your health levels. Food preventing you from saving for retirement how about going for the lowest cost grocery bill. Your company not giving you a pay rise. A few options are available. Maybe you could go somewhere else that is prepared to pay you what you are worth. If everyone’s paying the same then sorry that’s your market rate for that job. Get over it. Maybe instead of complaining you could work a bit harder. Who knows your employer might notice and pay you a bit more or even promote you. It’s worked for me. If that doesn’t work then use those new skills you’ve been learning in your own time to move to a new career where you can get paid more.
It’s all about less complaining, less playing the victim and more self responsibility. Do you agree?
As always do your own research.