Oily fingernails or Chewed fingernails - what do you prefer ?

So there we were, our weekly Wednesday night meeting on Palma de Mallorca’s classy Paseo Maritimo. The cars look sublime in the evening light, 3 MGBs,  a very rare De Tomaso Mangusta, 3 jaguars (XK140 convertible, XK150 FHC rally car and a tidy S2 E-type convertible), Austin Healey 3000, Ferrari Maranello, Ferrari 246 Dino, Lotus Esprit S2 Turbo, Triumph TR3, two Alfa Romeo Spiders, Mercedes Adenauer, 2 Morgans – that’s just a few. In total almost 3/4 of a million Euro worth of cars. That set me thinking - “How much IS my pension really worth?”. What if.................

Now like most 50+ year olds I am looking forward to the maturity of my British Private pension. 100 quid a month I've been paying since I was 30. “What if “ I had bought that Ferrari Dino in 1989 for £25,000 on credit over 5 years. The final cost in 1994 would be just a gnats whisker below the £40,000 region. Looking back old auction results that's what the car was worth in 1994 – but today the same car is changing hands for £140,000 Euro! Back to 1994 again - Lets keep the Dino and buy something else? What about a nice convertible E-type Jaguar. Mid ‘sixties cars then were changing hands at around £15,000 – I know because I could only afford a FHC at this time. Like a fool I sold mine on in 2004 pocketing £18,000  – exactly twice what I paid for the car. That same car today is worth 40,000 quid! Now if I had bought a 1966 convertible, that would be selling for close to 100,000 of the Queens’ little green notes.

Now do the math. Pay £100 a month for 35 years – that should give me £19,000 a year until I’m 85 – that’s 380 Grand if I live that long. That E-type on 100% finance will cost close to £25,000 at the end of term. Admittedly we are looking at repayments  For the Dino and E’ at respectively 500 and 400 per month but only over 5 years for each car– not 35 years. What will the cars be worth in 2024 when I’m 65? Well – looking at the price of ‘sixties’ Ferraris today, the ‘seventies’ Dino will be worth at least half a million and the E-type will be close to £150,000. I could sell the Dino and live on the proceeds in style, driving the E-Type until I’m 85 on £25,000 per year. It’s a no brainer. Even if you factor in servicing, insurance, etc you’re backing a winner from the start. It’s as safe as houses – the fact is, over the past two years, classic cars have appreciated more than gold.

Pensions, whatever they tell you, are not guaranteed. I’m sure every one of us knows somebody who’s lost a packet – occasionally all, sometime in the past 5 years. Nick Leeson started his trading career in his early 20’s with Morgan Stanley. There he learnt the ropes and moved to Barings, where he lost over 800 million quid. That’s not unusual today, is it? Look at the RBS debacle. Last year, they lost a packet but the bosses still pocketed a bundle in bonuses. Poor Nick would have been in the clear if he’d lost £800m with Morgan Stanley. In 2011 Morgan Stanley were fined $4.8m by the US Justice department for fixing electricity prices. This cost consumers in the Big Apple $300m and Morgan Stanley earned revenues of over $21m from the fraud.... and nobody went to jail. Can somebody tell me - how does that work ? Did you know that JP Morgan have zero in assets? So where is this all going?

These days, banks can do with your money whatever they please, nobody comes to book if it all goes wrong. Where would you rather put your money ? A 25 year old, untouchable trader,  or a 25 year old classic car which you can touch, tinker with, play with and be proud to be seen with (that’s difficult to do with a Banker!) ? Or to put it another way- what's more impressive down at the pub ? Chewed fingernails, wondering what the bank are doing with your hard earned dosh, or oily fingernails, a set of Jag keys with a leather fob and a big smile.......................?