The state of the nation.

I’ve four similar cases on the go at the moment, all at different stages, all investing for long-term income.

Drs H invested for income two years ago, when he retired.  Our second annual review will be on Friday.  I’ve begun preparing for that, with a performance review of all the funds and holdings within the funds.  Their brief was a sustainable income, with a long retirement in mind, so plenty of scope for the income to rise to keep pace with inflation. (Although, they haven’t started spending the income yet.  Maybe this time?)

Mr & Mrs S are new clients.  They’ve recieved a lump sum from an injury settlement, so it’s not a cheerful time.  They need a modest income, from a portfolio that can cope with changes in their objectives.  We’re at the begining of the planning process.

A different Mr & Mrs S need more income, so we need to change their investment brief.  They want a high level of income now, but with limited scope for protection from inflation.

Finally, Mr & Mrs M retired five years ago, but have been managing without an income from their investments.  Their children would rather that Mum & Dad enjoy the money, instead of struggling without it.  So, we’ve agreed to chase a useful level of income now, with some scope for protection from inflation.

Four customers, similar ages, similar wealth levels, and broadly similar objectives.  But there are some crucial differences, aren’t there?  They’re the bits I enjoy coming to work for!

What's on my desk right now Business/Finance, income, inflation, portfolio, retired, retirement

The UK savings rate (that’s how much we all put to one side instead of spending on handbags) is up from virtually zero to 4%.  I’m proud of us!

I’m from the generation that has found borrowing easier than saving up, so I think we should be proud that we’re adjusting.  Hopefully this is a new trend, not just a recession coping strategy.

“But”

The post-war average was 7%, so we’ve still got some work to do – and we should all save 10%, so somebody isn’t saving properly yet.

“And, but”

I am aware that inflation is bad for savings – and see my previous post about that – but it’s still worthwhile…. You could always put your savings in inflation-proofed accounts.

I wonder – did the last bout of high inflation kill off our willingess to save? Answers on a post-card please….

Building Wealth inflation, saving, United Kingdom

Do you remember the audi advert that talked about spending twenty million dollars developing the new A4 (I think it was that one, and wait to be corrected)?  The punchline was

“that was when twenty million dollars was a lot of money”…

I loved it.

Unfortunately, that’s why we’re going to need a period of high inflation, it’s the only way to make the recent expenses seem manageable.

As Tom Dobell said recently, “[we need to] inflate [the debt] away”.

So, I’ll be taking inflation really seriously.

Uncategorized credit crunch, inflation