The Full English Accompaniment – The Thick of Brexit

What’s piqued my interest this week?

In the last month a couple of don financial bloggers have again weighed in with their opinions on Brexit. First as Brexit entered the terrible twos TI reflected on his opinions and public opinions of it during that time (1). If you want a case example of the arguments that result check out the comment section.

Then Ermine gave us a post in his usual semi-satirical fashion on how to prep for B-day (2). This was both informed on his financial prepping, and amused on the end-is-nigh front.

So here’s my opinion, in the form of a Malcolm Tucker quote.

I’m just fed up to the back teeth of it all. In fact, beyond the back teeth. Brexit is the acidic backwash dissolving my oesophagus so I can’t feel when I’m swallowing whatever witches brew bitter pill this coalition of the inadequate and unelectable cook up.

This week the white paper on what the government would like from the EU as a deal finally arrived (3). Boris postured and buffooned his way out of the door looking for a front page splash. Rees-Mogg said something Dickensian. Trump weighed in with his usual bleached orangutang demeanour in The Sun (4). The. Bloody. Sun. Proving once again he’s Zaphod Beeblebrox incarnate.

I actually thought the white paper represents a decent compromise. Mujtaba Rahman’s opinion piece in the Guardian hits the nail on the head (5). Brexit is such a divisive premise that no one political party can agree on what to do. It is one last political hand grenade lobbed as a ‘look that-away’ by the arch-distracter Cameron. Danny Dyer has the right of it (6):

Lloyd’s have followed other companies in suggesting that Brexit will hasten or push them to move abroad (7). There’s been so many companies threatening Brexit-related doom that I take it all with a pinch of salt. No-one knows what’s going to happen, as no-one adequately explained or researched what could. Brexit is such a nebulous concept everyone wants something different, and some lack the ability to articulate what they want anyway. Because of this, a government who’ve basically followed whatever the prevailing populous wants (or shouts loudest for) are paralysed, dithering. So much for leadership.

Have a great weekend,

The Shrink

Side Orders

Other News:

Opinion/ blogs:

What I’m reading:

Eric by Terry Pratchett – light relief

Religio Medici by Sir Thomas Browne – the theological and psychological reflections of a C17th doctor

Enchiridion by Epictetus – Bedside reading for a bad day

References:

The Full English Accompaniment – Beginner’s guides to investing

What’s piqued my interest this week?

Over the last few weeks, in the breaks between sanding, painting, filling, sawing, strimming and all the other fun that comes with a new house, I’ve been reading lots of basic investment guides. Not the ‘you should invest here’ type, but general overviews of the mechanisms. Tim Hale’s Smarter Investing is of course in my reading pile (second, behind an exam textbook), but blogs and videos are excellent for five minute tea (or beer) stops.

My attempts at being more frugal, and aiming for some sort of FI life, started by lurking on the UKpersonalfinance subreddit. A long forgotten post pointed me to Monevator. The Investing for beginners guides there got me started (1). I was pointed to the MoneyMustache, and Weenie’s Quietly Saving. DiyInvestorUK and UK Value Investor have taught me more in depth about passive and active options.

Monevator’s weekend reading this week highlights a millenial-focussed investing and financial advice series from the FT (2,3). A more cynical person than I would say that millenials are more finance savvy out of necessity rather than choice.

Lately I’ve been really enjoying The Plain Bagel, a YouTube series by a young guy called Richard Coffin (4). As he’s based in Canada, a lot of the tax-reducing products discussed are Canadian or American, however it’s great for the basics. His ‘fundamental series’ consists of 13 <10 minute videos covering investment mechanisms, vehicles and psychology. Here’s a little sample:

Hopefully he gets support to keep producing great videos.

Have a great weekend,

The Shrink

Side Orders

News:

Opinion/ Blogs:

What I’m reading:

Eric by Terry Pratchett – light relief

Religio Medici by Sir Thomas Browne – the theological and psychological reflections of a C17th doctor

Enchiridion by Epictetus – Bedside reading for a bad day

References:

The Full English Accompaniment – How do footballers save their cash?

What’s piqued my interest this week?

A poor posting show on my part this week, as renovating our new property is sucking my spare time. In between sanding, painting, chiselling and sawing I’ve watched a bit of the World Cup. I’m not the greatest football fan. For me players spend far too much time finding ways to practice am-dram collapses to the floor, like a lot of very flustered Victorian ladies.

There is of course a huge amount of skill, time and effort required in the game. For this there is an eye-watering amount of money floating about. The received wisdom is that footballers chuck this away. See George Best’s quote:

I spent a lot of money on booze, birds and fast cars. The rest I just squandered.

Some definitely do, with 40% going bankrupt as soon as the cheques stop arriving (1). Keeping up with the Jones’ is one aspect, with a culture for 4x4s and designer wash bags. Others lose it in bad investment schemes or through gambling. A study in 2014 found football players are three times as likely to have a gambling problem than Joe Public (1). Other qualitative studies have examined the reasons; reportedly the excitement of placing big wagers coupled with the boredom of life away from football (2). Claims litter the broadsheets and tabloids of footballers being fleeced through ‘mis-selling’ of investments, losing millions (3, 4). The argument from the footballers is they don’t have time to examine the nature of the investment fully due to their training schedule (1, 3).

The footballers with boardroom balls

The smarter footballers seem to invest their gains wisely. Liverpool, along with other teams, sits it’s new signings down with investment and tax advisers following signatures meeting dotted lines (1). Broadly footballers investments seem to fall into three categories:

Bricks and mortar. Robbie Fowler made millions buying a vast property empire, and now runs a ‘Property Academy’ (5). Current England footballer Marcus Rashford is seeking to follow in his footsteps (6). Ramon Vera, Frank Lampard and Steven Gerrard have also done well out of property (7).
Riskier investments. Michael Owen dabbles in Crypto, and also has a race horse stables (8).
Running companies. Flamini the current standout here, running a biotech called GF Biochemicals (9, 10). Danny Mills works for a private equity firm turning around SMEs (7). Rio Ferdinand has hands in lots of pies, including restaurants, along with Gary Neville and Ryan Giggs (7). Pubs still seem to be a major feature.

What do we learn? Footballers are getting smarter and investing more wisely. The flash-cash culture remains, but for many putting money away is now seen as a norm. Footballers fall foul of the same errors every other investor does. Do you our research chaps/chapesses.

Have a great weekend,

The Shrink

Side Orders

News:

Simply B & Jacamo pull out of physical stores (11)
Airbus warns no-deal Brexit would mean it leaves the UK (12)
May to raise taxes to find £20bn for the NHS (13)
Pension company Equitable Life have shut down (14)
Visa grovels before the Treasury Committee (15)
Outside of our Brexit bubble, Irish house prices set to rise (16)
The UK throws away it’s lead in environmental energy to court foreign nuclear energy providers (17) – I’ve a whole separate post about this coming this week.

Opinion/ Blogs:

What I’m reading:

Eric by Terry Pratchett – light relief

Religio Medici by Sir Thomas Browne – the theological and psychological reflections of a C17th doctor

Enchiridion by Epictetus – Bedside reading for a bad day

References:

The Full English Accompaniment – Question Time Chapter I

What’s piqued my interest this week?

I’d like to start off this week with a little thank you to Weenie, YFG, TI, and a welcome to all new readers. After a few discussions with YFG and Weenie on last week’s Full English, Weenie said some very kind things in her blog (1). This combined with a mention on Monevator by TI in this week’s weekend reading has meant my readership exposure has shot up (2). When I saw the stats, my eyebrows tried to keep pace with the graph. Hopefully they’ll be return from my hairline soon.

Following our discussions, YFG, Weenie and I all appear to have set up accounts with Starling bank. If you’d like to join too, this link will act as a referral code (3). There’s no monetary reward, but I do get some little hearts in my app. Ain’t that nice. Since Martin Lewis recommended them on his ITV show the application process has slowed a little, but it’s still pretty painless (4).

Back to The Full English proper. This week I’ve been starting to develop an investment strategy. Monevator, as the doyen of passive investing UK blogging, of course started my journey with the guides to passive investing (5). Tim Hale’s Smarter Investing, Intelligent Investor and the essays of Warren Buffett are also in this list and in my reading pile.

Why don’t I just bang my spare cash in a Vanguard LS100 or LS80? Certainly the Evidence-Based Investor further supported the previous analyses that I’d expect better returns than most active funds (6). It’s too simplistic for me; I want more control.

So what about some active funds, which ones to choose? How do you pick your international exposure, and is it (should it be?) something that changes over time? I had a read through Moneywise’s first 50 funds for beginners (7), and started to build a list of active funds which contained interesting companies and investments. This is by no means finalised.

I was led to wonder should I just invest directly in shares, and cut out the middle man. After all, stocks and shares go up over time (8). Some fantastically-timed posts came out from the diy investor UK and John Kingham at the UK Value Investor (9, 10), highlighting the basics of share investments strategies. There was also a guest post over at TheFireStarter about investing outside of the UK and the FTSE100 (11). I started to build a list of companies I’d invest in, mainly in mining – a whole separate blog post.

To balance the risk of shares, I thought about bonds. Good timing as ever, in the week that NS&I cut it’s maximum bond deposit from £1m to £10k (12). I went back to Monevator again to look at corporate bonds (13). A short hop from there to P2P lending, including Ratesetter, and then through TFS again to The House Crowd for property investment (14, 15).

A lot to take in and muse on, without even getting into Cryptocurrency. Five years ago a financially savvy friend suggested I buy some bitcoin. At the time as a student my main financial concerns were the effect on alcohol prices of inflation, the corresponding waistline inflation, and how many pound-a-pint nights my student loan would stretch to. I continue to prefer the volatility of a works night out to bitcoin valuation.

Which is where this blog ends with a question. Where did you, reader, find the information to guide your investment strategy?

Have a great weekend,

The Shrink

Side Orders

News:

Blogs/ Opinion pieces:

What I’m reading:

I’ve recently finished When Breath Becomes Air, by Paul Kalanithi, and would completely recommend it. Wonderfully written, it’s the memoirs of a neurosurgeon who sought to find meaning, fulfilment and an understanding of purpose in his work and through a masters in literature, before finding it as he approached his own death from cancer in his 40s.

Eric by Terry Pratchett – light relief

Religio Medici by Sir Thomas Browne – the theological and psychological reflections of a C17th doctor – new to my bedside

Enchiridion by Epictetus – Bedside reading for a bad day

References:

The Full English Accompaniment – Are banks safe?

What’s piqued my interest this week?

One of my threads of thought this week has followed the TSB issues and a Radio4 Moneybox episode a few weeks ago. It transpires that fraudsters used the opportunity to see others bank account information during TSB’s blunders as a a good ticket to cash-out town. This week we had the admission from TSB that at least 1300 customers lost money due to fraud as a result of their IT changeover (1). Nils Pratley at the Guardian sums it up nicely; for all TSB apologises, it doesn’t change the incompetence (2). Between this, and a discussion with YFG on an old Full English about the TSB debacle, I decided to have a chat with some friends who work IT security. One is a white-hat hacker, the other works as an IT security consultant and provides subcontracted coding services (as well as currently writing some code for a little spin-off). Both confirmed what I had read before; that the monolithic goliaths that are the main high street banks have pitiful IT infrastructure.

It makes sense. These are banks founded on the premise of an on-site vault, a list of ledgers and a network of staffed branches. Their IT was adopted ad-hoc, as a necessity, developed or brought in to fit the old model. The old model was anachronistic, it included human foibles and errors, and a degree of leniency to allow for it. Trying to bring in coders, explain and then cram all that into Windows 3.1, then 95, then 2000, etc was never a long term solution. IT departments are not the moneymaking focus of a high street bank, they don’t win all the praise, so the funds will only stretch to essential patching. This is not safe. Threadneedle street is trying to combat this by setting cyber security challenges to recruit IT experts to bolster their security (3)

Sadly, there lies my concern. A bank, by definition, should be a safe place. Your money no longer resides in a huge locked vault. It sits on an online ledger, protected by minimally patched although mostly secure firewalls and security systems. Security systems prone to outages and instability, as Tesco Bank customers found this week (4).

Which is why I find ‘challenger banks’ so tempting. The Starling Bank CIO, John Mountain (strong name), was interviewed last September about working at a bank that is challenging traditional IT thinking (5). Starling have released their API and ran a hackathon of their systems at London Campus in April this year (6). Anne Boden, the Starling CEO, is reported to have said that a bank should not have an IT department, as it’s whole business is now IT. In John Mountain’s words:

“We don’t run a technology function here because the whole business is a tech function”

Will I move all my money into ‘challenger banks’? Probably not. The Rothschilds’ don’t throw their banking system out with the bathwater every time there’s a systemic crisis. Traditional banks will have to learn the hard way, as TSB are doing. For the time being I’ll split my pots as, after all, a bit of diversification can’t help can it?

Have a great weekend,

The Fire Shrink

Side Orders

News:

Blogs/ Opinion pieces:

What I’m reading:

When Breath Becomes Air by Paul Kalanithi – Useful for a sense of perspective

Enchiridion by Epictetus – Bedside reading for a bad day

References:

The Full English Accompaniment – Just a quicky

What’s piqued my interest this week?

In short, not a lot, as I’ve not had much time to read the news and I’m currently not enjoying the level of misery journalists seem to revel in. Various big changes in our household have kept me occupied which I’ll blog more about in The Financial Dashboard. One of these is my first budgeting attempt, and in preparation I’ve been reading a few different blogs for opinions/ instruction.

What has caught my eye is the continuing IT debacle of the big banks. TSB’s IT woes/ fraud rumbles on and then on Friday VISA had a wobble (1). Barclays are tightening lending criteria, citing Brexit, but are also launching a ‘Northern Powerhouse’ SME fund (2, 3). Between this and the new US tariffs potentially starting a trade war, it looks like things are going to get a lot less predictable (4).

Finally on a lighter note; Which? have announced that quick washes aren’t cheaper after all, as they don’t clean your clothes, so you have to wash them again (5). Quelle surprise.

Have a great weekend,

FireShrink

Side Orders and Comment:

A mixture of new blogs and new reference sites this week:

http://www.msziyou.com/shimmying-housing-ladder/
https://3652daysblog.wordpress.com/
https://www.bogleheads.org/wiki/Calculating_personal_returns#GoogleDocs
https://firevlondon.com/ – Really enjoying this for inspiration
http://awealthofcommonsense.com/
http://fiukmoney.co.uk/

And a Happy Birthday to the Frugal Cottage!

http://www.thefrugalcottage.com/the-frugal-cottage-turns-4/

What I’m reading:

When Breath Becomes Air by Paul Kalanithi – Useful for a sense of perspective

Enchiridion by Epictetus – Bedside reading for a bad day

References:

The Full English Accompaniment – What’s in a bank?

What’s piqued my interest this week?

As part of my monthly goals I’ve been investigating new banking options. Banks seem to be going through a tumultuous time at the moment. We’re over a month into the TSB online banking fiasco (1), with customers still not getting adequate service and some now complaining of fraud which has been facilitated by the botched move. Not entirely surprising, given I assume most high street banks IT sysadmins take their design prompts from Heath Robinson.

In response to this TSB have increased their interest rates to 5% although it’s not clear if this is for new customers too (2). They’re also waving overdraft fees and various other charges. Tempting, but many other banks are also increasing rates. As discussed in this BBC reporter comment article (3), banks are upping interest rates to compensate for the loss of the Bank of England’s Term Lending Scheme, which closed in February this year (4). This was providing cheap finance to banks to offer to customers, and has now been withdrawn. With it’s withdrawal banks need to find other sources of cash to lend… our pockets.

It’s therefore worth checking out moneysavingexpert’s best switching offer page (5), as between switching bonuses and current account interest, there’s lots of perks to be found. Savings account interest rates are also being upped (6), predominantly at the smaller banks and building societies but also for some of the high street banks.

The linked BBC comment piece before also discusses the new ‘challenger’ banks: Monzo, Atom, Revolut and Starling to name a few. I’m looking into these to switch to, and I’d also point to an older Telegraph article which explains a lot about them (7). All of this means it’s a great time to be a banking customer (unless you’re with TSB).

Have a great bank holiday weekend,

FireShrink

Side orders:

Comment:

Firehub.eu is a compiler of European Fire blogs (15)
YoungFIGuy has been busy this week with three blogposts, including this one on budgeting (16)
The Retirement Pyramid! (17)
Ben Carlson at A Wealth of Common Sense discusses bonds (18)
John Kingham at UK Value Investor discusses building a high risk low yield portfolio (19)
And of course, Monevator’s weekend reading (20)

What I’m reading:

When Breath Becomes Air by Paul Kalanithi – Useful for a sense of perspective

Enchiridion by Epictetus – Bedside reading for a bad day
References: