What caught my eye this week.
There was something (else) notable about the first TV interview with the three lads [1] from Manchester who restrained a knife-wielder run amok in Sydney earlier this week.
In the initial broadcast, I noticed two were wearing Apple Airpods [2] whilst talking to the camera.
I thought this pretty striking. The wireless headphones are popping up all over London in the same way the iPhone’s once iconic white earbuds did a decade ago.
Nevertheless I was surprised to see them in the TV interview. Mancunians have their own inimitable sense of self-presence, but still – wouldn’t you take your Airpods out before a once-in-a-lifetime appearance on live TV?
That was my first thought. But then Airpod users often say they forget they’re wearing them.
And unlike, say, the ill-fated Google Glass, people love to be seen wearing them. Even when being broadcast around the world!
This trivial observation suggests to me that wireless headphones are going to become ubiquitous. Even your gran in the Highlands will be wearing them within a few years.
And that’s relevant around here because it means a £169 purchase [2] – and that’s with a £30 discount – every couple of years has been conjured up by Apple out of nothing.
Put that in your spreadsheet
Yes, yes, a couple of you will tell me you’re still getting by with a Tesco mobile on a £5 contract and a pager.
There are always outliers or laggards.
But the bigger point is that a lot of today’s silly luxuries become tomorrow’s essentials.
The iPhone of course is the ultimate example of this kind of household expense that nobody really saw coming.
An early retiree at the turn of the century might have budgeted for a mobile phone, sure, but not one that cost £1,000 or more.
And just a few years earlier in the mid-1990s there would have been no annual mobile bill in the forecast at all.
Of course, there might have been a car in the budget – whereas today’s young urban corporate escapee might make-do with Uber – and perhaps a video tape recorder to capture that round-the-world retirement trip at the cost of a couple of grand.
Swings and roundabouts.
Tomorrow’s world
When I first started reading personal finance forums 20 years ago, I was amused by all the inflation conspiracy theorists that abounded, and I still am. Tracking inflation is difficult enough without introducing a nationalised swindle.
However I now see that those who argued we all have our own personal inflation rates made a really good point.
Broadly, stuff (iPhones and Airpods aside) is getting cheaper while services are getting more expensive.
But guessing what stuff and what services you specifically will want to use in 20 years time is harder than it looks.
It’s another reason why personally I wouldn’t want to follow a ‘spending down all my capital’ plan in early retirement (though I accept many feel they have little choice).
Using your current spending is a decent proxy for a decade or two, but what if you’re retiring at 40? Do you really want to miss out on the space travel, the personal teleportation, and the by then-mandatory weekly enemas with your personal gut flora therapist?
Well, okay. But surely not the space travel and the teleportation?
On the other hand, perhaps the robot revolution will lead to super-abundance and a century of deflation.
Tough call.
Inflating expectations
In this context, the news that inflation is currently running a little over target [3]…
Annual consumer price inflation rose to a three-month high of 2.1% in July from 2.0% in June, the Office for National Statistics said, bucking the average expectation in a Reuters poll of economists for a fall to 1.9%.
…seems neither here nor there, especially as anything could happen come 31 October.
With a sensible Brexit deal the pound could rally overnight and imported inflation fade away. Alternatively, with a bonkers no-deal, we might see a run on sterling and all kinds of craziness. Or perhaps just a damp squib either way.
So the Bank of England does face a bit of a dilemma [4].
But in the longer-term, in a world of accelerating change, we all face a bigger one.
Further reading:
- What is the UK’s inflation rate? – BBC [5]
- How inflation is costing you more than you think [Search result] – FT [6]
From Monevator
A wider universe of investment trusts for retirement income in 2019 – Monevator [7]
How to protect your portfolio in a crisis – Monevator [8]
From the archive-ator: Are you lost in Neverland? – Monevator [9]
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1 [10]
London property prices continue to fall – ThisIsMoney [11]
Solarplicity becomes 13th energy supplier to collapse since 2018 – Guardian [12]
Who are the 1% and are you one of them? – ThisIsMoney [13]
How AI will change the way you manage your money [Search result] – FT [14]
[15]
Smart Beta ETFs are doing a good job of capturing the return premiums [16] they target – Factor Research [17]
Products and services
The fate of the world’s largest ETF is tied to 11 random Millennials – Bloomberg [18]
Monzo insists new short-term loans won’t be at Wonga rates – Guardian [19]
Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter [20]
Rail fares to rise by 2.8% in January – Guardian [21]
Customers rank crisis-hit Metro Bank the best current account provider – ThisIsMoney [22]
The Smithson small[er] cap investment trust is off to a good start – IT Investor [23]
Homes painted in vibrant colours [Gallery] – Guardian [24]
Comment and opinion
Stocks for the long-term? [Wish I’d written this] – Demonetized [25]
The impact of interest rates and inflation on stock market valuations – A Wealth of Common Sense [26]
It’s hard to think long-term – The Irrelevant Investor [27]
Four takes on the inverted yield curve… – Abnormal Returns [28]
…there’s no evidence inverted yield curves predicts [US] stocks will underperform cash [PDF] – French and Fama [29]
How to become a millionaire in London on £40,000 per year – Fire V London [30]
On no longer having a house husband – Mrs YFG [31]
How people trick themselves into believing they can beat the market – Of Dollars and Data [32]
Never mind, the Joneses aren’t watching anyway – Humble Dollar [33]
Reinventing retirement: how to live a fulfilling later life [Search result] – FT [34]
Latest ‘return gap’ study shows the value of low-fee, mixed asset, buy and hold – Morningstar [35]
REITs aren’t a true alternative [US but relevant] – Morningstar [36]
Legal and General Group assessed as an ethical investment – DIY Investor [37]
Small [angel] investors on the capitalization table – Points and Figures [38]
Cliff Asness: Bonds are frickin’ expensive [Geeky] – AQR [39]
Brexit
Hammond says PM’s demands ‘wreck’ prospects of new Brexit deal – BBC [40]
Dominic Grieve: I don’t want to put Jeremy Corbyn into No 10 – Guardian [41]
Ken Clarke: I wouldn’t rule out being a caretaker PM – BBC [42]
‘National Unity’: the fantasy flick that will never make it out of development – Marina Hyde [43]
Tiny Luxembourg is already a big beneficiary of Brexit – Fortune [44]
A third of people of UK consumers have changed their spending due to Brexit worries – BBC [45]
Kindle book bargains
Essentialism: The Disciplined Pursuit of Less by Greg Mckeown – £1.99 on Kindle [46]
Misbehaving: The Making of Behavioural Economics by Richard Thaler – £1.99 on Kindle [47]
The Miracle Morning: The 6 Habits that Will Transform your Life before 8AM by Hal Elrod – £0.99 on Kindle [48]
The Asshole Survival Guide: How to Deal with People Who Treat You Like Dirt by Robert Sutton – £1.99 on Kindle [49]
Off our beat
How to see things as they really are – Raptitude [50]
I’m pretty worried about the coming of ‘Deep Fake’ [Example video] – via Twitter [51]
Greenland: Trump warned the island cannot be bought from Denmark – BBC [52]
Deadly banana fungus threatens global banana production – ThisIsMoney [53]
There’s a reason the future is more troubling than the past – Guardian [54]
Why washing machines are learning to play the harp – The Atlantic [55]
And finally…
“As the Danish philosopher Søren Kierkegaard noted, life can only be understood backwards – but it must be lived forwards.”
– Benjamin Graham, The Intelligent Investor [56]
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- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩ [62]]