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Weekend reading: Thrifty business

Weekend reading: Thrifty business post image

What caught my eye this week.

A few years ago the Financial Times published an article about students and money that caught fire and went viral.

I can’t even remember whether the gist was eat fewer avocados or mount the barricades and challenge the system. But I did notice it seemed to lead to a change in editorial tone.

Perhaps it was a coincidence or a staff change, but the personal finance section (which I’ve been reading since I was a 20-something myself) definitely took a lurch to the sympathetic. A cynic might say the FT was chasing new traffic it hadn’t known was there. I suspect it realized even its uniquely affluent young readership felt under the cosh.

Now, I know not every Monevator reader of a certain age has made that leap.

However personally I do believe – financially-speaking – that it’s tougher now for most aspirational young people than for many decades.

No, not tougher than it was for a miner’s son wanting to follow his father down the pit in the Valleys in the early 1980s – nobody is claiming that.

But far harder for an averagely studious young person to achieve averagely good grades and get a middle-of-the-road job and end up with a house and 2.4 kids on anything like an average street in an average town.

And at the end of the day, for most people for right or wrong that’s what it’s all about (including virtually all those older folk who say “let them eat rent!”)

Money saving experts

Anyway, all that’s a long-winded way of saying that the FT’s Millennial Thrift special this week has lots of tips on saving money, many with a digital dint.

Some even work if you’re an old lag like me. Especially as there’s a London slant.

Go check out all the tips at the Financial Times [search result], and if you’ve got any that aren’t mentioned then feel free to add them in the comments below.

(Let’s only have a couple of obligatory sarcastic Viz knock-off tips please! 😉 )

As to whether saving £8 on a movie ticket or getting a cheap pizza is a sustainable solution to homes priced at 20-times local earnings… well that’s a debate for another day.

Oh yes: Come on England!

From Monevator

Investing for beginners: Uncompensated risk – Monevator

From the archive-ator: Thoughts on a very British housing crisis at Northern Rock – Monevator

News

Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.1

‘Bleak and crippling year’ for UK High Street: Store sales fall for fifth month in a row – ThisIsMoney

Britons may be able to claim billions more in PPI compensation – ThisIsMoney

Brace for a lost decade in US stocks, warns Morningstar – MarketWatch

Report: UK single-breadwinner families need 27% boost in income – Guardian

How the UK’s middle class savers are being dragged into a 55% pension tax trap – ThisIsMoney

Poorer parents contribute more than expected to plug student finance gap – Save the Student

Bank of England warns on the impact to GDP of a full-blown US-led trade war [PDF]BOE

Products and services

Buy-to-let lenders offering workarounds on tough affordability rules – ThisIsMoney

National Counties lifts rate on its top easy-access Classic Saver 4 to 1.35% – NCBS

Vanguard to enable free trading of most ETFs on its US platform [I’m not sure about UK?]ETF.com

Ratesetter’s free £100 bonus offer ends this month [Affiliate link]Ratesetter

Marriage tax break could save £900, but one million couples are missing out – ThisIsMoney

Mini bond investors given hope by ombudsman ruling [Search result]FT

Remember Thriva, the fancy blood test and app combo? It now enables you to add various personalized tests to your subscription, from testosterone to thyroid function. You get 50% off your first test (and I get £10) if you try via this link – Thriva

How much does a garden cost? £27,000 on average, apparently – ThisIsMoney

In pictures: Homes with air conditioning – Guardian

Comment and opinion

The privilege of knowledge – Of Dollars and Data

ETF industry has reached maturation without maturing – Bloomberg

Supply and demand: One reason it’s harder to beat the markets than you think – Peter Lazaroff

The (evolution) of the investing pyramid [PDF]Meb Faber

Help! My child’s pension has hit the Lifetime Allowance roadblock [Search result]FT

Trade war bark: Hold tight or nasty bite? – Investing Caffeine

P2P lending: A review of the market – Young FI Guy

Vanguard should offer a “total fund”, with everything in it – Morningstar

The ideal scenario in retirement: Conservative returns, steady income – Financial Samurai

Made $650m? Here’s how to keep it better than Johnny Depp (reportedly) – The Big Picture

Wealth is what you don’t see – Fervent Finance

UK stock market valuation and forecast – UK Value Investor

Is volatility risk? – Behavioural Investment

Larry Swedroe: Dividend policy and stock returns [Research precis]ETF.com

The new glide path [Using momentum to reduce sequence of returns risk, research, nerdy]Flirting with Models

Kindle book bargains

Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy by Cathy O’Neil – £1.99 on Kindle

Einstein: His Life and Universe by Walter Isaacson – £0.99 on Kindle

Made to Stick: Why some ideas take hold and others come unstuck by Chip and Dan Heath – £1.99 on Kindle

The Honourable Company: History of the English East India Company by John Keay – £1.99 on Kindle

Moon Over Soho: The Second Rivers of London novel by Ben Aaronovitch – £0.99 on Kindle

Brexit

Theresa May’s struggle to protect trading links with EU after Brexit [Search result]FT

Airbus chief: Government has no clue how to execute Brexit without harm – Guardian

Martin Wolf: The irremediable folly of a ‘no deal’ Brexit [Search result]FT

Ongoing Brexit cost calculator [Nearly £47 billion so far]Brexit cost calculator

Off our beat

Fitness trackers prove England taking penalties isn’t good for your heart – via Twitter

You decide: Would you let a car determine who dies? – ABC News

For the first time more than 200,000 flights are tracked in one day – via Twitter

Red-hot planet: All-time heat records set across the globe – Washington Post

I’ve only just discovered this silly word pronunciation ‘guide’ – YouTube

And finally…

“If wealth is defined as funded contentment, then we need to know what we’re supposed to be funding.”
– Brian Portnoy, The Geometry of Wealth: How To Shape A Life Of Money And Meaning

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{ 70 comments… add one }
  • 51 zxspectrum48k July 7, 2018, 6:15 pm

    @londoninvestor. I think people also forget how high the pension annual allowance was 10 years ago. It was over £200k/annum over most of the late 2000s, peaking at £255k in 2010/11. Add to that the fact that the S&P in GBP total return terms is 4.5x the value it was in March 2009. So if you happened to have slotted the maximum for 2008/09 (£235k) into your pension at that time (and then just forgot to do anything) you would have over £1mm. Taking fixed protection, to protect your LTA at £1.8mm in 2012, would have been essential but I know a few who completely missed that chance.

  • 52 Learner July 7, 2018, 9:52 pm

    From the FT, the supper club idea is a bit naff (.. unless testing the waters of a career change in the cheffy direction..) but the underlying habit of cooking at home is a solid tip. I keep the freezer stocked with chili, stews, Indian dal, thai curry paste, soups and burgers – made in bulk, portioned and frozen – and supplementing with fresh veg, a meal for two is a few dollars at most. Over a year vs eating out it amounts to several thousand saved a year for half an hour’s prep each evening.

    “Food made by hand is an act of defiance and runs contrary to everything in our modernity. Find it; eat it; it will go. It has been around for millennia. Now it is evanescent, like a season.” — Bill Buford.

    Cycling to work over driving or public transport is a pretty close second in the austerity measures, and not taking frequent/distant vacations some way back in third. After that it’s nickel and dime stuff.

  • 53 Old_eyes July 8, 2018, 9:01 am

    Further comment on intergenerational challenges from the Guardian https://www.theguardian.com/inequality/2018/jul/07/its-time-for-britains-millionaire-pensioners-to-pay-up with some superb foaming at the mouth BTL

  • 54 Matthew July 8, 2018, 10:23 am

    I know some boomer’s line is that they didn’t get any help, so why should they help their children, although some of that could be to do with the war perhaps? As that made their parents poor but probably left some unoccupied housing to buy cheap.

    Anyway, I’ve been fine even on lowish income without direct help, because i saved while i lived with parents and started with a 1 bed flat, although they indirectly helped me by charging minimal rent before I bought the flat, but had I not saved before, the only way out of the rent trap is a lot of overtime and scrimping. A lot if millenials didn’t start scrimping as soon as they started work, which is their own fault, and went in holidays and try to aim for more expensive property than they can afford.

    Also boomers are more cautious I believe because they come from a time if high interest rates, so many don’t have liquid investments with ehich to help, just their house

    My dad was right that advice us more valuable than cash, although I’d like to set a trust up for my son and fund it as far as I can, because i didnt bring him into the world to slave away, but as far as buying a house or car goes he’s on his own

    I think in an ideal world parents would offer help voluntarily, without need of taxes or inheritance, but they can’t so easily if it’s all in their property

  • 55 TheFIJourney July 8, 2018, 12:35 pm

    That cost of Brexit calculator is an interesting one I must say hehe.

    I definitely think that there are a few things financially speaking that puts current millennials which includes myself words off than the previous generations. When it comes to not being able to get in the housing ladder, less well off financially after costs, less value in pensions etc. I am all for being a rational optimist at how much we have come along and continue to prosper for sure on the whole but there’s no doubt some metrics where we are falling behind. I only hope Brexit doesn’t add to this.

    Chris@TheFIJourney

  • 56 Kraggash July 8, 2018, 12:46 pm

    Wiki:
    “Since 1990 Poland has pursued a policy of economic liberalization and its economy was the only one in the EU to avoid a recession through the 2007-2008 economic downturn.[20] In all, as of 2017 the Polish economy has been growing steadily for the past 26 years, a record high in the EU. Such growth has been exponential, with GDP per capita at purchasing power parity growing on average by 6% p.a. over the last 20 years, the most impressive performance in Central Europe resulting in the country doubling its GDP since 1990. ”

    Do you think there will be a market for British plumbers, fruit pickers etc there?

  • 57 Neverland July 8, 2018, 1:09 pm

    @Matthew

    “I know some boomers line is that they didn’t get help”

    Suggest you look up what MIRAS was and Margaret Thatchers policy of selling council houses to long term tenants at steep discounts

  • 58 Matthew July 8, 2018, 1:10 pm

    @kraggesh – them sending home money probably helped that

  • 59 Matthew July 8, 2018, 1:14 pm

    @never land – my parents were never tenants, the wife’s mum never bought because she was left holding the kids, opportunity for some perhaps, my parents always felt frustrated that they fell outside of most firms of help

  • 60 Will Mington July 8, 2018, 2:01 pm

    @Kraggash: I doubt it, not for a long time: https://www.reinisfischer.com/average-salary-european-union-2018

  • 61 Kraggash July 8, 2018, 3:02 pm

    If last year’s wage grown continued, Poland would overtake UK in less than
    5 years, according to that chart….

    Anyhow, Poland’s average wage will be heavily squewed by the large unskilled population. The increasing affluent middle classes will be requiring the plumbers. Granted fruit pickers.

  • 62 Scrooge July 9, 2018, 1:12 am

    Most of the above comments are neither here, nor there. You cannot state your own situation as a proof of the failure of any statistic. You’re just an element in the standard deviation.

    Opinion: we’ve transitioned from a western hemisphere social capitalist market to a global market. The old norms are defunct and this transition has led to the social fallout we are currently experiencing, denial and anger, exacerbated by the financial crash – Brexit, Trump, and other nationalist themes.

    Of course the process will fail economically but the pain will be felt for decades, perhaps in ways different than in the past [one hopes].

    It doesn’t take much wit to look at similar eras and extrapolate the risks that we can now foresee.

    I personally see this as a disaster that we are handing on to future generations, for which we will be viewed with the contempt we now hold for those in the 1930s who squabbled and ignored the harm being done and condoned.

  • 63 The Rhino July 9, 2018, 10:35 am

    @scrooged

    Most of the above comments are neither here, nor there. You cannot state your own situation as a proof of the failure of any statistic. You’re just an element in the standard deviation.

    Absolutlely, and yet we see it week in, week out in the comments. What is it? Availability bias?

  • 64 hosimpson July 9, 2018, 9:23 pm

    Millennials struggling nowadays has nothing to do with immigration.
    It has to do with what Ermine has said here.
    There are no regional search engines.
    You can no longer be average AND do well financially. You have to either be of average ability and compensate for it by working exceptionally long hours or be of exceptional ability (and then you won’t need to compensate for anything, provided you’re far enough to the left on the Aspergers Spectrum).
    That’s all. Really.

  • 65 Martin t July 12, 2018, 1:51 pm

    Maybe it’s just me but I dislike the way these “save money ideas” are presented. Sure, they are some good suggestions but even the good ones involve changing habits.

    If you are going to go through the pain of changing habits, I think it’s a better idea to change something in your life that will lead to increasing your income rather than decreasing your costs.

    Why? Because people who would benefit from saving 50p a coffee have a much bigger margin to increase their income and thus should focus on that instead.

    If you are in bad debt then it is probably a good idea to focus on guaranteed ways to save money until you clear it off.

    Apart from that I think finding ways to save few pennies is just a distraction from what we should really be focusing on. Things like increasing our value through gainining useful skills and creating alternative revenue streams.

  • 66 Matthew July 12, 2018, 9:24 pm

    @Martin – sometimes, but cutting costs is usually more tax efficient than increasing income, and bear commuting in mind. Cutting costs is fairly low hanging fruit because even if you trained everyone, not everyone can be the cheif, society simply needs scrubbers and bum wipers more than it needs boffins and this is reflected by the number of jobs and sometimes limited difference in pay levels between the two

  • 67 Martin July 12, 2018, 10:47 pm

    Re: @Matthew

    I completely agree with your reply. Savings tips are easier to apply to many people and are often instantaneous, and like you say are usually more tax efficient. However, I still believe that if you can teach someone to change their habits so that they save a significant amount of money through saving ideas, then you could have given them the tools to increase their income to be overall more beneficial. Many people would not be able to do either consistently (not necessarily of their own fault).

    I guess you could do both, but time is obviously a factor and I think the time is better spent improving your value and hence income. I think this is particularly important for younger people where if you increase your wages earlier on, then the benefit of that will be longer.

  • 68 Matthew July 13, 2018, 7:09 am

    @ Martin – indeed they are probably capable of far more job wise, considering especially how better paid people are not always good with money, but for that reason you can have more pride-driven graduates in the marketplace who accept worse financial terms (ie having to rent, commute, do unpaid overtime, etc), just in order to say to their friends and family and themselves that they are “using their degree” (I used to have a graduate job but took up a better paid local non graduate job with db pension)

    But I did want to increase income so turned to investing for tax efficiency, that is a use of the skills I think
    I think being wise with money can make a big cumulative difference to what you can do on a job and how much you have to work

  • 69 Richard July 13, 2018, 9:36 am

    Also don’t forget that if you don’t have the ‘saving habit’ increasing income is likely to lead to increasing lifestyle and so you have ‘nicer’ stuff rather than more savings. Esp if the increase in income is modest over time (rather than 50k more in one go) so the house deposit still feels like a lifetime away.

  • 70 raluca July 30, 2018, 12:12 pm

    Well, millennial women are doing way better than their mothers, but only because well, their mothers were second class citizens and also, they were working less outside the house, and being payed a lot less then men, when they were working. https://www.smithsonianmag.com/smart-news/forty-years-ago-women-had-a-hard-time-getting-credit-cards-180949289/
    And since women are 51% of the population, I’m wondering how these statistics work, really? Who’s this avocado-eating, Starbucks guzzling, mythical millennial? Because if he were a woman or person of color, the story would be quite different, maybe something like “her mother wasn’t even allowed to own property, now she can buy a house that costs only 10X her salary at her first job”.
    I’m pretty sure life is easier/better now than it was 40 years ago for the entire human race, old people and young, rich or poor. We have vaccines now, imagine that.
    I am also pretty sure that the south of England is (or rather was, before Brexit), in the process of being gentrified – plainly speaking, you need to be already rich to live there.

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