Jack's financial journey

Apprenticeship Blog – Week Two

So after my first week at Pentins I have definitely begun to settle in. I was enjoying the 9-5 office life a lot more than my previous job, it was nice to not be stacking shelves all day for what felt like hours on end. I have even started bringing my own coffee in, although it’s still a work in progress getting my mum to realise that only premium coffee will satisfy my newly found sophisticated pallet. I’m sure I’ll get there with that though.

My second week here has definitely been as eventful as the first, I have been learning constantly throughout in lots of different ways. But the main thing I learnt this week is to be very cautious walking into the kitchen behind someone who has headphones in. It’s not the best way to introduce yourself to the other members of the centre. I would now personally recommend either going in after them or making your presence clear. By that I don’t mean shout hello or tap them on the shoulder, that would be very weird. But don’t just walk in behind them either like I did, as I had quite a fright when I came out of the fridge with a bottle of milk and had a lady with headphones in let out a large scream at me. Nice to meet you too. Luckily the milk I was holding had the lid on it, as the amount that I flinched in shock would’ve painted the whole kitchen in the stuff. It was a very awkward moment to say the least. The lady was quick to let me know she didn’t know I was there, but I was more concerned that everyone would think that the new apprentice was creeping around the kitchen scaring people. Not a good first impression. At least one good thing came out of this situation though, I highly doubt I’ll be seeing her with headphones in the kitchen again.

Attended

This week I spent some time learning the basics of a cash flow modelling system called Voyant. Sam showed me the different tools you can use on the software to predict the outcome of an Individual’s financial situation in the future, whilst also storing the information at present. It was a very eye-opening experience seeing the tool in action. One thing I was particularly intrigued by was seeing how an individual’s expenditure changes over time. I was very surprised to see that an individual’s expenditure went down dramatically around the age of 65 (retirement). Surely this was when people would be spending all the money they had saved up? On holidays, grandchildren and other luxury items. But although this was true I had never thought about the expenses of working. The biggest expensive of all being tax. So this was why there was a massive decrease in expenditure, it made me realise just how much money is paid in tax especially in a higher rate tax payers circumstances.

Fact

The full state pension will be worth approximately £8,767.20 in 2019/20. Which equates to £168.60 per week. Just imagine having to live on that. I don’t think you would be able to. My Nan probably spends that much each week on Werther’s originals and the twenty boxes of biscuits she buys for the dogs.I realise even more that it is up to you as an individual to supply yourself with money for retirement, as you cannot rely on the government to supply a luxurious lifestyle for you. This is why pensions are a big part of a financial plan, they allow you to save as much money from your earnings as you would realistically afford and gets you some of the tax back that I noticed when looking at the Voyant graphs. This sounds like a good deal to me, although I’m not sure I’d spend the money on Werther’s……it would be nice to still have my own teeth when I’m retired.

Office Politics – Does it pay to be wealthy?

So after seeing Voyant in use it made me wonder whether it actually paid to be wealthy. I always had the general impression that a person who was relatively wealthy could pretty much do whatever they wanted without having to worry too much but seeing some general retirement planning changed my view on this. Not only would the individual have to worry about how they need to budget for their retirement, they also have to worry about how big the impact of them not earning income from work will be, especially if they are used to a good lifestyle from a big income. This made me think about retirement in a way I perhaps should’ve sooner, I had always seen retirement as being the point In life where you get a lot of money paid out and do with it what you couldn’t do whilst working. But realistically it’s more about trying to make the money you have available last you long enough to live a pleasant retirement until death because all chances of earning any more are coming to an end. Pretty stressful if you ask me. That’s why I’ve decided to start planning now, that way I can spend nine months a year on a cruise like everyone else seems to do in retirement. Bon voyage.

1 Comment
  • Jason Couch
    Posted at 19:12h, 27 February Reply

    Great blog Jack. Really enjoying reading about your financial planning journey. Maybe a question for one of your next blogs – my son is 20, soon to be leaving university and starting to earn some money – where do you think he should focus his saving during the early part of his life/career? Pensions? Cash savings? Funds? Property? ISAs?

    Keep up the good work!!!

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