Kids – love ‘em to bits but couldn’t eat a whole one. Pricey too.
by Doug Brodie
Now here’s a double edged blessing; many moons ago I was at a drinks party hosted by my father and I joined his group swapping tails. He remarked to the eldest of the group that an upside of being older was that he no longer had school costs to pay, to which the reply was ‘Who do you think pays the grandchildren’s school fees?’ Quite.
Undergraduate fees are fixed at £9,250 per year, irrespective of whether Magnificent Mary takes a place at Oxford, or somewhere without such an academic reputation. That’s lucky. Overseas undergraduates at Oxford have to stump up annual fees of £29 - £44k, per year. And then there’s the accommodation, living and book costs.
If Mary is diligent and committed and wants to do a postgrad at Oxford, then the typical MSc one year cost I could find is £45,950. Ouch.
We need lots more of the gene pool that Prof Sarah Gilbert came from. The future of mankind may depend on it.
It affects you and me.
We are just at the age of getting the pay-back on the tax we’ve been paying to keep the NHS turning over; technically we’ve been aging since the age of ten, however in the third part of adulthood things start to go slightly wonky and we start to be consumers of healthcare in all its forms.
Have you noticed an uptick in the amount of ibuprofen you take? Don’t tell my kids, but my Parkrun time is now over 30 minutes, and I do notice even when I bend down to tie my shoelaces. Paracetamol? No longer for hangovers, more for just regular malaise. Experience has a lot going for it. Age, not so much.
It’s important to know the framework of our money because time will come when we wonder if we should ‘just go private’. I know many clients who have had knees and hips replaced, and for sure it makes a material difference to quality of life. Living in retirement shouldn’t be about quantity without quality, and having secure, planned and organised financials allows you and I to not worry about those potential costs. Worrying about your health is unavoidable, worrying about the cost is avoidable. Sooner or later the degradation of our cells overtakes the optimistic ambition of our mind.
102 year old Julia “Hurricane” Hawkins set a world record at the USA Track and Field Masters Indoor Championships
What’s our excuse?
Grey cells, use them or lose them.
Longevity – there’s many a tale of the extreme longevity of some Japanese communities, commonly referring to Okinawa. This has always stumped research because it has high rates of smoking and alcohol consumption. This week the team on The Infinite Monkey Cage (I recommend it) explained that what has been happening is not people living longer but their relatives failing to report their deaths in order to keep collecting the deceased person’s pensions. Who’d have thought it.
Using our brains for problem solving is universally recognised as being good for warding off the onset of dementia, so I thought I’d give you this simple arithmetic quandary to puzzle over:
Averages – simple, huh?
Investor starts with £100, invests into a fund.
Year 1 the fund falls -20%
Year 2 the rises +22%
Over the two years what is the average return?
-20% +22% = 2% ÷ 2 years = 1%
If the return has averaged 1% over the two years, the investor expects to see £100 x 1%^2, or £102.
The arithmetic is actually £100 x -20%, and then that sum x +22%, so the answer is (100 – 20%) = 80, x 122% = £97.60.
Where did the missing £2.40 go?
Be very wary about advertising and the output of the marketing departments of investment managers, as you can see, it is very easy to mislead investors about past returns.
How about this – know how to calculate an average?
When is 3% more than 6%?
Take two funds, one Whizzy, one Plodding
o Whizzy average over five years is 6% pa
§ +30%, -25%, +35%, -21%, 11%
o Plodding average over five years is 3% pa
§ +3%, +3%, +3%, +3%, 3%
A) Which one would you choose?
B) Which one made more profit?
Maths huh?