Roll Up, Roll Up

payday loans

Wonga, Britain’s largest payday lender is getting a lot of bad press at the moment. Good. According to Wonga’s own website (as at 12/11/2014), the interest they charge on a representative loan of £150 over 18 days is 365%. This equates to an APR (annual percentage rate) of 5853%. I read in The Week (my favourite weekly news digest) that:

“Borrowing £400 from Wonga at its standard rate for seven years would leave you owing more than Britain’s national debt.”

This Week Issue 990

The financial authorities have finally stepped in to call time on the money lenders. By January 2015, the interest rate on payday loans will be limited to 0.8% per day and they will be a fairer cap on penalties for late payment. And about time too. Let’s hope that these legalised loan sharks preying on the poor and the desperate (and sometimes the feckless) will soon go the way of the dodo – and that  investors will lose their Saville Row shirts. Now, what to do about the fat cat tax cheats stashing away their shillings in the Cayman Islands?

Would You Credit It?

credit cardsA letter from the Co-operative Bank dropped on the mat the other day about a credit card I’ve held with them for donkey’s years. I’ve always had a soft spot for the good old co-op. It’s a movement with a long and laudable tradition of using the clout of collective ownership to deliver goods and services fairly, transparently and equitably. So. What does the letter say? I quote:

“As a responsible lender we have recently reviewed your credit card account and have noted you do not regularly use the full limit available to you.

Having an unused credit limit on a credit card account registered in your name can negatively affect your credit score; as such we are planning to reduce your limit in line with your previous spending.”

It’s a topsy-turvy world when your credit worthiness is determined by how much debt you have to juggle. It’s even worse when the Co-operative Bank encourages its customers to pile on the debt in an attempt to reverse its own well-documented slide into ruin. The whole point of a co-operative society is that it’s supposed to do things, you know, differently. What’s laughable about the letter is that I only use my account to pay a small quarterly premium for a life insurance policy. If they really wanted to match my limit to actual spend, I’d have a credit limit of only £3. It would be more honest (and, perhaps, closer to their founding principles) if they just admitted that they want to close my account because they’re not making any money out of me. Now that would be worth the price of a stamp.

Spamalot

Pay Day LoansGenerally, I enjoy this blogging malarkey. I’m little troubled by the cyber-trolls and infobahn ne’er do wells. But, one tedious aspect of blogging is the endless stream of spam attacks – over 34,000 so far. If only I got that amount of genuine interest. Most get picked up by WordPress’ spam filter but a few still sneak through. I receive an eclectic range of spam – the collective weaknesses, desires, vices and foibles of humanity are laid bare in Latin, Cyrillic, Arabic and Chinese (and probably in Runic if I bothered to decipher) mixed in with the endless machine-generated auto-babble. I could develop RSI just from the repetitive deletes. Since our return to Blighty, I’ve noticed an alarming increase in the number of dodgy comments from pay day loan companies (parasites, actually). These micro loans are designed to lure the financially embarrassed as they struggle from one wage to the next. Shooting ducks spring to mind. There’s a recession on. Some people are short of the readies and easily seduced. I looked up one of the more well-known lenders who advertise on the box. Their ‘representative APR’ is 2414%. Yes, you read right – two thousand, four hundred and fourteen per cent. I hear the ConDems intend to cap the rates these lenders charge – this year, next year, sometime never. These smiley cyber-sharks in sharp suits don’t need to send in the heavies to bully the desperate. They can afford to drop a few pounds and a couple of percent and still be quids in.

Suited and Booted

Now that our frivolous semi-retired life among the lotus-eating emigreys of the Aegean is behind us, I thought I’d mark the transition with a major makeover. Not me, of course (far too late for that). Regular readers will have noticed that the blog is now dressed in more sober attire. Backtobodrum commented:

“I have to comment that your blog now looks very organized and serious. Have you two gone back to wearing suits and ties?”

It’s an interesting observation because, in a way, we have. Liam’s got himself a part time job doing something with data. So much for giving up the wicked world of the waged but needs must when the Devil drives. The demon in this case is the continuing slide in Turkish interest rates. It’s a pre-emptive strike. We’re spending more or less the same here as we did in Bodrum, but we need to stitch the little hole that first appeared in the family purse a couple of years back. Working part time enables Liam to plug the gap and to meet his family obligations (the main reason we came back to Blighty). It also enables me to make a proper go at this writing lark (the other reason). When I get the film deal, Liam will be released from paid labours and return to his main function in life – sorting me out and peeling me grapes.

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Money, Money, Money

Ram Raiders

During these days of lean interest rates it pays to shop around. Our money was split between three banks and when one of them offered a better rate we decided to move our cash. The bank that lost out did everything in its power short of outright refusal to scupper our plans. An electronic transfer attracted a ridiculous charge so we were forced to draw the money out in cash. We emerged from the bank like Bonnie and Clyde with two man-bags stuffed with the filthy lucre. We stood by the roadside waiting for our dolly ride clinging onto half our worth like limp-wristed limpits. Every florid passer-by and leather-faced loiterer looked suspicious to our nervous eyes. We made it unmolested to the second bank and slapped the cash onto the counter. I have never been more relieved.

Eeny, meeny, miny, moe

On the subject of myopic banking practices, why are ATM kiosks often clustered in rows? Do they huddle together for comfort and security? Is it to confuse ram raiders? I’m surprised no one has thought of cutting costs by sharing the burden of running expenses, maintenance, cleaning and topping up the dosh. Of course this would mean the banks talking to each other and dropping the fees for using the wrong machines. Now that would be something.

Y Viva España

Liam loves a spreadsheet and a bit of research. He’s at his most content when fiddling with his formulas and colour coding his columns. I set him a challenge. I wanted to know the price differential for living our kind of life in Blighty, Spain and Turkey. Having worked out our major expenses – food, booze, travel to Blighty, rent, bills, healthcare etc, Liam set about the task with gusto and usual thoroughness. The analysis is remarkably detailed and the results are not at all what we expected.

Based on our spend in Turkey

  • We would spend a third more living in the UK than in Turkey (in the southeast of England, outside London). This is mostly due to higher rent levels.
  • Our average weekly grocery shop would be cheaper in the UK than in Turkey
  • Our average grocery shop would be cheaper still in Spain
  • Overall, we would spend a fifth less if we lived in Spain

These are headlines only and many factors are variable. Nevertheless, it makes an interesting read. What makes the most difference to our fiscal health is our income. As we don’t work we depend on our investments. British and Eurozone interest rates are negligible so we would have to supplement our income somehow, leading to an obvious and unpalatable conclusion. However, rates won’t remain low forever.

Of course, we don’t live in Turkey on cost grounds alone and we don’t intend to move on any time soon. We’ll keep an eye on it though. We don’t know where our doddering dotage will take us.

Money, Money, Money…

Just like the Queen, I no longer carry money. Liam has assumed the role of central banker and keeper of the petty cash. Consequently, I know the value of everything but the cost of nothing.  Three months into our Anatolian adventure Liam felt a fiscal review was due. He prepared the figures with his usual due diligence supported by a complex multi-coloured, multi-linked spreadsheet. After all, he had been the Excel Queen in his previous life. It was all there, spend, income, projections – our financial world laid bare. Liam plugged the laptop into the TV and I knew it was going to be a long night. I uncorked a bottle.

Interest rates continue to slide which is potentially calamitous for us as we rely on investments to keep us afloat. Fortuitously, Liam has moved some of our stash into mutual funds and this gone some way to ameliorate our plight, but we are still eating into our capital. As Liam eloquently demonstrated, our budget deficit is “equivalent to 10% of GDP with only moderate prospects for growth during the next fiscal period.” A career in world economics surely beckons.

Liam did his best to reassure me that the money we don’t have is enough to pay for the lifestyle we can’t afford – just like Greece. And we can’t guilt-trip the Germans. Ah well, we’ll just spend the cash and wait for the pensions to kick in, assuming we still have pensions to kick in given the parlous state of the British structural deficit. We are considering taking in washing as we’re far too old to sell our bodies.

In the end, though, it is the quality of our lives that really counts and the quality is good, very good. It is a minor miracle that after spending three months together all day every day we are still speaking let alone loving, laughing and living. That’s something money can’t buy.