Single Protection at Double the Price

Every now and again, I get junk mail from Domestic & General about our Hotpoint kitchen appliances. D&G are the people who provide the maintenance contracts on everything in your kitchen – it’s what you end up with if you say yes to the “extended warranty” offer in Currys.

I’ve never bothered in the past, and certainly won’t in the future, given my out-laws’ recent experience. Their fridge failed and invoked the service, only to find themselves having to borrow a fridge from a neighbour while the service company sorted things out. For six weeks. Being without a fridge in 1932 was seen as normal. Being without a fridge in 2008 in just appalling.

Normally I just recognise the typeface and return address on the envelope and bin/recycle it immediately. For some reason, I’ve opened all three envelopes tonight to see what was in them. The first one was offering me protection on my “refrigeration unit”, which will cost £65 for the year.

No thanks.

Next envelope I opened, was offering me protection on my fridge freezer, which will cost £74 for the year.

Hang on a sec.

So what’s my “refrigeration unit” then if the second envelope was for the fridge freezer? We have Hotpoint pretty much throughout our kitchen: oven, hob, extractor hood, washing machine, and fridge freezer. We certainly don’t have more than one unit which provides refrigeration facilities though.

So what would happen if I just blindly sent off the card details without thinking? What would I get for the extra £74 a year?

Money, Money, Money

The way money gets talked about in the press these days, it’s hard to maintain a reasonable perspective on exactly what you can buy and how much it costs.

For example, a transfer of a football player worth £2m would hardly raise an eyebrow these days, even in League Division One. Yet to most of us, £2m is an unimaginable amount of money. Counting that out in twenty pound notes would easily take the best part of half a day.

At the other end of the scale is yet another financial rescue package announced today of £37bn. Loads of money isn’t it? Well actually, in 2007 IBM had revenue of $98.8bn or £56.9bn at today’s exchange rate. So the UK government is actually bailing out banks with less money than IBM can turnover in a year; plus we need to keep shareholders happy.

Another thing is the perceived value of winning the national lottery. Many people assume that if their six numbers came up, they could retire and live on the interest. Actually, you probably couldn’t.

Say you won £2m on the lottery: great. Pay off the mortgage, loans, and credit cards: £150,000. Throw a big party, go on a celebratory round-the-world holiday, and buy a fancy new car: another £150,000. Significantly more if you’re into some exotic Ferrari etc. Give a bit to friends and family: that’s anywhere from £200,000 upwards. So you’re left with £1.5m in the bank and you’re still in your original house. So you want to move to somewhere bigger / quieter / more relaxing / requiring less work. You’ve now whet your appetite with your taste of the good life, so you’re talking about £300k+.

So now we’re all content with our nice house, nice car, happy family and you’ve quit your job. Plus you’ve got around a million in the bank – sorted aren’t you? Well no, actually. To “live off the interest”, you need to invest that cash into a safe place. And “safe place” automatically means “low yield”. You can’t go round gambling with it into stocks and shares (or even property these days), because this is now your livelihood. If the stock or property markets take a tumble, then you’re struggling to pay the bills. You also need to get the money on a regular basis, so you can’t have it tied up in 5- or 10-year trust funds. So you’re now looking at the high-end of regular savings accounts. Unfortunately, things aren’t that easy either.

Inflation currently stands at around 5%, so if your money is earning 5% interest in a bank account, then it’s quite simply “standing still” in real terms. What cost £100 last year now costs £105, so you’re not any better off. Obviously as a long-term plan you need to be getting an interest rate better than inflation. Say you find a good couple of investments and manage to sort out something for 8%. That means for every million you have in the bank, you get £80,000 back in interest. But of course, you’re taxed on that (at higher-rate tax band), so there’s another £22,500 gone. And of course, you can’t touch the bit that’s put aside to cover inflation, so you’ve just effectively lost another £50,000. £80,000 in interest and you’re only allowed to have your hands on £7,500 of that per year.

Now that doesn’t sound bad – after all you don’t have any mortgage or other debts to pay off, do you? But you’ve moved to the bigger house which costs a fortune to heat and light. Plus, you’re now used to fine dining and the expensive holidays which you don’t really want to cut out. You’re no longer employed, either, so you need some hobby to fill-in the time between now and death. £7,500 is now significantly less than you thought you were going to get as a pension when you planned for retirement before all this happened. That “millionaire’s lifestyle” of you and beloved flying business class to New York for a weekend costs over £7,000 (excluding accommodation) and is now looking very distant indeed.

business_class

Money: stay happy without it, because if you do happen upon some, it’s never as much as you think. Unless of course you’re a bank, in which case gamble it anyway, because someone will come along and rescue you if you ever get into trouble.

Bugger

I’ve been driving for 13 years, driven over 100,000 miles and never hit anything (not even a kerbed alloy) – until today. It was in Winchester Brookes car park and I managed to scrape the rear wheel arch on one of their many concrete pillars.

I was trying to find a place where we can all get out of the car easily – obviously with Lucy in her car seat, it’s hard finding space to swing the door open anyway, but the Brookes car park is particularly narrow and the supporting concrete pillars are over a foot wide. I tried to expertly put the car into a space, only to find I ran out of talent and succumbed to a wheel arch which I only now realise actually flares.

Before

After some gentle rubbing with soap and water, I managed to establish things weren’t as bad as they initially looked, but it will still need some professional help.

After

That wash also only confirmed how scruffy the rest of the car is. 🙁

Crawling and Clapping

Yesterday, Lucy started crawling. That’s right, the might of a seven-month-old has now just been unleashed onto the world. It really did come without warning – she had been trying without success for the past few weeks now, but not really got anywhere, until today.

Katrina was changing her nappy, went into the bathroom next door to get some water for her, then turned round to find a curious-looking head poking round the door wondering what she was doing. It’s now time for the stair gates I guess…

In other news, she also started clapping today. Again, no real warning, just a sudden desire to wake up one morning with coordination substantially improved since the previous evening. It’s like she goes to bed pondering these things, then wakes up the next day to try out her new theory.

Obviously we are now encouraging her to do more of this stuff, so every opportunity it’s "Can Lucy clap her hands?". Of course she can.

OK Cupid

I’ve been recently browsing the archive of Phil’s blog and he wrote about the perpetual conundrum that is the inability for men to know what women want. Apparently, he’s signed-up to the OK Cupid online dating web site (although presumably no longer now you’re dating, eh Phil?).

Curiosity got the better of me and I clicked-through to the site in question. Apparently, all you need to do is answer a few simple questions, and hey presto, instant affection from all of those thousands of gorgeous single women out there who are currently trawling the Internet, just looking for someone like you.

What did strike me as odd was the first question it asks: “What is your relationship status?”

OKCupid.com

I’m MARRIED????

I can understand where they’re coming from allowing someone to state up-front that they either looking for dating or friendship. Fair enough. But what’s the difference between saying “I’m seeing someone and looking for friendship” and saying “I’m married and looking for friendship”? Is that not just different levels of how illicit the affair would become?

Maybe it’s just that I’m old-fashioned: the concept that someone married should be visiting dating web sites is wrong to me.

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