ordinary and oddinary

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Archive for the category “Saving & Spending”

La compra semanal (weekly shopping)

I go to Mercadona almost every Saturday to do weekly grocery shopping. I try to keep the budget at about £30 worth in Euro. With the current strength of £, it works out about €36. It doesn’t vary much what I buy. I can leave Mercadona with two fully loaded large shopping bags, which is very satisfying. I buy eggs, bread, Spanish hams & sausages, fruits & vegetables in season, rice, pasta, legumes, cereal bars, milk, nuts, etc. I also buy frozen stuff at time and it lasts a few weeks.

Most of products at Mercadona is ‘marcas blancas (supermarket own brands)’. I don’t necessarily buy supermarket own brands at other places such as Morrisons, Carrefour, Hipercor etc, rather in some cases, I avoid them. However, I really like Mercadona’s. Not that I feel that I am deprived of choices, I would actively buy their brands even if there were choices that I could make. I trust their quality and taste.

Today I came across this article on ABC.es and more and more Spaniards are buying ‘marcas blancas’ and the price is a deciding factor due to the crisis. I’ve got my doubts about it whenever I go shopping in Spain, but well, it says 1/4 of the Spanish population is unemployment. I spotted Mercadona in the article and it instantly gave me smile.


Earlier retirement

These days I think a lot about early retirement. I’ve already made my mind up to retire (at least) in 12 years time, in my late 40s, but I’m inclined to (well, would love to) do it in half the planned time. The timing of 12 years was prescribed on the basis that my mortgage and the corresponding endowment policy would mature in such time. Also my Spanish mortgage, which is a capital repayment, will be nearly cleared off as I’m overpaying it every month.

When I reach my pensionable age 60, I’m entitled to receiving approximately £550 per month from the government (at the current rate). It will double when Mark reaches 65. Therefore, when we both are pensionable age, we will receive about £1,100 (or worth by then) per month. I think it’s good. As Mark and I have a private pension each, I’m pretty sure they will sum it up nicely by the time we retire. Therefore I’m not particularly concerned about our finance after 60.

However, my desire is to retire well before this time. Every day I feel what matters to me is the time, the ‘youthful time’ left for me. I need enough money to be able to enjoy my time and I feel compelled to find the balancing line between both.

In conclusion, I need a monthly disposable income of £2,000 to enjoy life provided that I’ve got no major liabilities, i.e., mortgages. One thing to point out is that I don’t mean to stop working altogether. I would like to find something, which is something I can be of help to others, and do it with my full heart in, not for the money. Once I’m financially stable, I won’t need to even get paid. Unless you are born a saint, I don’t believe you can be truly charitable to others at the expense of your own poverty.

Let’s say that I can get £2,000 as a 5% interest of my savings every month. It means I will have to have almost half a million £ in my account. (Here I’m not considering amortising the capital.) However, this income will not be sufficient to cover my mortgages and living costs if I shall retire in 6 years time. So my revised plan is to retire in 10 years time. I will have to save at least half of our joint income to realise this dream. Well, I’ve already consulted with Mark, so it’s our dream!

Of course there are many variables, either positive or negative, hence it could be silly to set out the retirement plan like that.

Don’t get me wrong though. I have no intention of sacrificing the present for the future either. I’ve allocated even a larger portion of budget for our lifestyle enhancement. We will travel more and experience more this year. We’ve taken all bank holidays off together already. Depending on Mark’s scan result next week, we’re going to Marrakech, Madeira, London and many more.

….I must admit the biggest and the most scary variable is Mark’s ongoing health.

Long-term investment vs. Child

Last Friday, I had an appointment with my financial adviser to review the endowment policies we’ve had for the last 8 years. They could be doing better but at least are growing at 5-7% per annum. Given the current economic crisis spread around the world, it’s not too bad. Our strategy is a bit aggressive (80% funds 20% cash).

Initially we started it as a 20-year long-term investment plan and later linked it to the mortgage loaned for the flat we purchased together in Gibraltar. I remember we opted for the maximum contribution of tax-deductible in this long-term investment policy and I have to say my heart sank when I first saw a big chunk of monies automatically deducted from our joint account.

About a year after the commencement of the policies, I quit my job. I had loathed my job, yet didn’t quite figure out what I really wanted to do either. So the break was a bit prolonged. Money was tight. Mark’s sole income wasn’t too bad, but by no means enough to enjoy life. For the first time I was awfully tempted to surrender the policy, thinking ‘If I had the money in my hand, I would feel less constrained..Oh god 20 years..Was I out of mind or plain stupid?’

But my better judgement won and I kept it alive. After 4 months’ break, I finally decided to join an accountancy firm. Money was still tight as I was working and studying at the same time earning peanuts. Somewhere along the line, we even bought a house in Spain. It was a self-inflicted (!) uphill struggle, hence my temptation lurked about for a quite while.

And at one time, when I saw seemingly better products around, I thought to myself I might be better off trading my policy and invest elsewhere.

Well, it wasn’t always bad.
One day, that year’s annual statement arrived and I found out that my chosen products outdid considerably! Yay, I wasn’t bad, I’m an investment genius! Ha ha I couldn’t help feeling smug. 😉

Then my career started taking off and so did his. Finally we were able to begin to appreciate our endowment policies and it didn’t feel like a burden any more.

When I finally get the large sum in 12 years time, I will probably be glad that I haven’t surrendered. I will be proud to stick to the initial decision and not to deviate from it. Well, I know I still have 12 more years to go in order to validate my statements though. 🙂

Looking back, I think committing to a long-term investment plan like my endowment policy is kind of similar to having a child. When you have a child, you are bound to struggle. You may face regrets and wish you’d gone down to the different road. Then the child grows. He brings joy to your life and makes you experience something wonderful you’ve never imagined before. Then he causes trouble and expels from schools. After backbreaking rebelling, he gets to a good uni… The list can go on forever.

However, at the end of the day, you will feel that ‘I’m so glad that I’ve had my child.’ in the same manner as ‘I’m so glad I’ve kept my endowment policy.’

A tiny wee bit radical? Well, you know what I mean. 🙂

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