As I thumbed through my news feed, the consensus was clear – everyone is depressed, the cost of living squeeze is hurting millions, and something needs to be done about it. But it feels remote from me, and I’m guilty of being SMUG.
The current list of problems in the world is unending. But it seems that the most immediate are the fact that the cost of living is going up and the quality of life is dropping.
Essentially, what we had on the cheap is now more expensive; what we had on tap is now restricted and what was working for us is now working against us.
I’m thinking, the food, shopping, the cost of heating our homes, car finance, public transport, the NHS, public services, mortgage costs, and house prices.
Yet, I’ve spent all of my life thinking that these things were expensive, and now I’m feeling justified in my poverty mindset. Tramp Angst is how Christopher Hitchens put it.
So, harbouring feelings of inadequacy, grooming grievances and feelings of alienation from the economy and its willing comsumerist participants has putme.in good stead, secure in my finances and more relaxed about what used to be obssessive. Except I’m not feeling that justified in my approach and my results, but I do feel that I probably come off as smug – smug to you the reader and to anyone who meets me.
I’m 40, have two kids (who ever said kids were cheap?) A lovely wife, good friends, and stable everything else; life is pretty easy. I feel that I’m comfortable, have no real worries, and barring something catastrophic happening, we are set for life.
But I know it’s tough for everyone else and I emphasise, but it feels like a different world.
Maybe part of me feels that I’m looked down upon by those that are worse off. I don’t give off the airs and graces of someone who’s rich – I’ve cultivated a “millionaire next door” look and I don’t want to try to impress anyone.
The Great House Price Reckoning
Perhaps the biggest scare that will hit the middle-aged and middle class is that property is not a royal road to wealth but instead penury. Stories of “I bought for £XXk and sold for £XXXk” will become less common. The number of people reaching pensionable age with massive mortgages is increasing, and the most common use of equity release is to pay off the mortgage.
If interest rates stay at a (still very cheap) 4%, then who can really afford a house costing £250,000. The interest (real or inputted) on that is £10,000 a year. When everyone is broke and even teachers and police are using foodbanks, how sustainable are unaffordable living costs.
Friends of ours looking to buy an average looking home for £600,000 a looking at £2,000 a month in interest.
Dropping prices back to where they were 5 years ago still leaves them massively more expensive than what is affordable and means massive equity loss for the millions of people who’ve had it easy for years – and don’t know just how bad things.
The wave of home equity was like a morphine daydream to millions. Your house worked harder than you did and made loads of tax-free money! There are more homeowners in the UK than ISA holders – think about that for moment.
My own view is that this current cost of living crisis is just the first time that everyone (not just the poor who have felt the squeeze for over a decade now) is feeling the pinch. It’ll only get worse, over time. Not all at once but when the cost of life’s essentials, shelter, food, warmth, health, are getting more expensive (and precarious), the next crisis just waiting to happen – like a viscous game of Jenga.
Even if you do have your house paid off; and don’t have to either rent from a landlord or rent from the bike, you can’t eat equity and you need a reliable income stream to survive. Property alone is not the Royal road to wealth (this is a fact known by the rich).
Sadly, millions of British people are going through their lives without any significant net worth, a problem for millennials whose rent pays off another’s mortgage
There’s a big difference between worrying about the Amazon being cut down and living in the Amazon and having the loggers getting closer every day.
It’s the same with a lot of things. Perhaps the biggest thing was the war in Ukraine; we took in a Ukrainian family last year as a way of helping, but there’s still a huge difference between the minor discomfort of having to share your home and sitting in a cold bunker without any electricity, listening to bombs in the distance.
When you are insulated from the evils of this world, it’s hard not to be wrapped up in your own problems and indifferent to others. “I’m alright, Mack” is how you could put it.
So, GFF is fine – don’t worry about me, but do look after your own situation, your own finances, and make the foundations in 2023 for a better future.