Reply to: Reserve Funds and Contractors

[gingerjedi]

I had a bench fund but used it all up last summer when I was off for 5 months, the rate for the new gig which I've been on for 6 months is so poor I've not been able to replenish it so I'm still dipping into my overdraft every month.

It's no good having a rainy day fund if it rains for months.

[bobspud]

i refer the honorable gentleman to my previous post.

Honourable

I have seen good people who saved and struggled through their lives get screwed in the 80s. They paid taxes saved hard, and when the poo hit the fan they had their savings wiped out then their homes go to auction... They could not get any help because they where "too rich"

I always understood that today would come... I just knew that I would ensure that I was a toxic asset when the debt collectors turned up. The only thing that you have on your side in a mess like this is to have nothing to take back...

By the time I hit the wall the mortgage debt agreements will be in place and I will be able to take a few years out the game on taxpayers expense even if its on much less cash than I am used to.

If hector gets pissed off at me then there is nothing more for him to take off me anyway and I have commited no crime.

[ChimpMaster]

When I started contracting I always viewed this as a "Bonus" period of my life where I would be earning more than normal and hence would use this opportunity to build a better life for myself and my family.

To that end I've used the income to invest into property and shares, both of which are now either worthless or close to being worthless. The remainder is in GBP savings accounts, which are also fast becoming worthless.

What was the point I was trying to point?

[ratewhore]

On those rates they should have closer to £200,000 in a war chest after 5 years.

Say's who? People here need to concentrate on their own finances without worrying what other people are doing.

[bobspud]

if that's true then you are either very stupid or have huge balls to run that kind of risk.. my advice, invest in a canoe and 2 bedsits next to each other..

Hugh Balls

Out of interest how many years have you been in IT?

[DimPrawn]

Depends what your outgoings are...

Exactly.

They may have spent it on a good care home for their parents, a good school for their children, university costs, paying for a family member who has fallen ill, invested it in getting their brothers family business off the ground.

It doesn't need to go on Ferraris to be spent.

[Xenophon]

On those rates they should have closer to £200,000 in a war chest after 5 years.

Depends what your outgoings are...

[DS23]

I'm going to be dry of all cash by the end of next month then the fun starts...

My company will be tits up as well. Guess I will be in fine company

i refer the honorable gentleman to my previous post.

[bobspud]

How long does lunch take you?

Doh !

[d000hg]

It's a gamble.

You could build up a £200K "war fund" just sitting there adding little value to your life and then die of cancer anyway, or you could take a risk, spend it on something you enjoy and hope that being brilliant will get you through any bad patches.

These large pots of cash could have been used to buy and sell property and some here would now be millionaires.

If you're full-time 'employed' then £400/day is a pretty big sum, I don't think I would easily spend more than that even with a pretty opulent lifestyle. That leaves you a day SAVING rate of £200-400 AFTER holidays and champagne, which has to be over £50K a year.
Maybe they have much more extravagent lifestyles (although how many solution architects drive ferraris?), or maybe they did invest it all in property... but even then property isn't worthless just yet!

[oracleslave]

I assume you think the sun shines out of Gordon Brown's bottom then?

Not read many of DP's posts I take it.

[expat]

What a strange person you are. Calling them idiots for spending their money they earned and paid tax on how they see fit.

Indeed! Good New Labour bossy politician material here if you ask me.

[Solidec]

What a strange person you are. Calling them idiots for spending their money they earned and paid tax on how they see fit.

I assume you think the sun shines out of Gordon Brown's bottom then?

Same bloody principle, the rainy day fund.

ESPECIALLY in contracting, or were you fooled by the "no return to boom and bust" line ?

[DimPrawn]

Proflicacy may have cost these idiot contractors tens of thousands in extra tax just so they could live "the celebrity high life"

What a strange person you are. Calling them idiots for spending their money they earned and paid tax on how they see fit.

[Solidec]

It's a gamble.

You could build up a £200K "war fund" just sitting there adding little value to your life and then die of cancer anyway, or you could take a risk, spend it on something you enjoy and hope that being brilliant will get you through any bad patches.

These large pots of cash could have been used to buy and sell property and some here would now be millionaires.

I did not say you had to keep that £200K in CASH. Just because McSnotty is a profligate w4nker doesn't mena we all have to be.

At £800 a day for a sustained 5 years, I could live extremely luxuriously and STILL have £200K tucked away (be it in stocks, bonds, gold, property or cash), and I rent a flat in Central London!!!

I guess its just a mindset, I don't think buying designer clothes and having 3+ long haul holidays a year is my idea of fun. I can be just as happy having a lark in the park with some friends.

End of the day, if you can live comfortably and hapilly without going over the higher rate tax threshold, why would you ever draw more than 40K from your business? Knowing that one day you can wind up the whole operation and pay minimal CGT on residual company profits?

Proflicacy may have cost these idiot contractors tens of thousands in extra tax just so they could live "the celebrity high life"