I will answer Jim’s question as simply as I can. I want the long term returns that markets offer over 10, 20 and 140 years but I will only factor these into my thinking if I feel I am protected from the short term.

As someone who does not invest to get rich but to avoid running out of money, I am concerned that as an individual , I am vulnerable. Like millions of others, I do not want to set my own investment strategy or make my own retirement projections.

Instead, I want to join others in mutual structures where the risk of things going wrong is shared, but where there is common participation in the upsides, so well expressed in Jim’s charts. If I can feel confident I am not vulnerable to failure , I can take more risk and expect greater long term returns.

Thinking about it, I see four ways to move towards collective security. This may seem like old hat to experts, but I don’t think that this is properly set out to ordinary people in a way that helps them to feel comfortable with their being benefeciaries of these long-term investment returns.

Way one is no more than the pooling of investments in a common fund. By bringing people’s savings together, individuals get a greater spread of investments that reduces the risk of over-concentration and allows them to benefit from the market return. Whether through insurance pooled funds, unit and investment trusts or by using ETFs, people are using financial services to reduce risk and access long term reward.

Way two involves the smoothing of these investment funds, typically using an insurance company to distribute more regular returns through capital backing, This is known as “with profits investing” where – in return for payment for the cost of capital, people get guaranteed returns supplemented by a share of the upside.

Way three involves not just the smoothing of investments but the structuring of payments to meet specific needs, most typically a pension , but also the targeting of a sum of money to meet a debt or liability (a mortgage endowment policy). This can involves capital backing through “with-profits” or the creation of a mutual structure – for instance a CDC scheme  a building society or credit union. Though we are now moving some way from the original idea of a pooled fund, we are still finding ways to pool returns and risk through collective behavior.

The final stage in developing this concept is the defined benefit pension scheme, This can draw on pooled funds , with-profit smoothing and the pooling of risk that happens in CDC and building societies. But defined benefit schemes go further, relying on the long term investment returns that Jim demonstrates but providing guarantees on outcomes. These guarantees come either from sponsoring employers or from capital markets or from the tax-payer (in the case of funded public sector pensions). Annuities are also paid based on assumptions of returns that can be achieved from pooled investment though, like with building societies, those returns are based on debt rather than equity markets.

I exclude from this analysis the unfunded pension schemes that do not link returns to the markets but to the underlying growth of the economy with demands on participants being based on changes in the gross domestic product.

And here is my point. When Jim asks us what returns we are assuming on our money, he is speaking to a small sector of the population who are ready and able to make such decisions for themselves. We might properly call them financial experts. But beyond this group are financial experts making decisions on behalf of groups of us which extend from those in pooled funds , through insurance companies who determine with-profits rates, banks and building societies lending us money and the pension schemes and insurance companies sharing risks to pay us an income in later life.

To suppose that we are not dependent on the financial markets is naive, most of us are dependent on the markets and the rates they set.

I am no Karl Marx but I understand how capital impacts my life. I am no longer frightened by money, I live in the City and understand the capital markets do a degree (no expert).

And the little I know tells me how much I don’t know. Our fragile finances are organised for us through financial institutions which we barely understand but trust. We trust them, despite their occasional failures because they are “by us- for us”, they are the means we have to organise collectively. However odd “rates” may seem, however remote from us the Bank of England, the world stock exchanges and bond markets may seem, they deliver us the pensions , mortgages, life insurance and investments that make our daily lives a lot simpler.

Because if we were forced to manage our finances ourselves, and not through financial institutions, we would be spending a lot more time asking Jim’s question and a lot less time doing the things we find really valuable. We put up with rates because without them, we’d be on our own – on our own in a naughty world.