Good reads from around the Web.
Simon Lambert at ThisIsMoney [1] has done a deep dive on the recent household income and wealth figures from the ONS, and there’s something in there for everyone – from Jeremy Corbyn to Hyacinth Bucket.
For instance, your household needs to generate £84,747 of annual so-called original income [2]1 [3] to be in the top-fifth in the UK.
Quite a figure, even in households with two earners, once you get away from London.
The median for the UK though is a less imposing £35,204. Perhaps that’s not a bad target for financial freedom? Remember it’ll need to go up at least with wage inflation.
Simon also reproduces an interesting graph showing what it takes to get into the top 1% in terms of total household wealth.
(The answer is a cool £2,872,600).
The ONS total household figures might ease your conscience or make you try harder, depending!
Again, median household wealth is a far more modest £225,100.
Pension wealth at 40% accounts for the largest proportion of the total. Property is second at just 35%. I presume this is due to the high net present value of all those final salary and public sector schemes out there among the oldies.
First among more equals
Simon notes that the ONS figures – when adjusted for benefits and taxes – suggest Britain is becoming less unequal in terms of income.
That’s true from what I’ve read elsewhere, but sadly it’s not due to a reversal in the income disparity as it’s popularly understood.
Average CEOs are still making far more than they should. And while the national living wage will help, I don’t think Britain’s lowest earners are making out like bandits.
No, it’s back to pensions again. The triple-lock for the state pension has transformed [4] pensioners’ incomes in recent years.
It’s hard to begrudge pensioners escaping the poverty trap, but it’s worth remembering that they had at least a shot at owning their own homes and generating a nest egg over the past 40 years.
I wonder if even the most diligent of today’s youngest, poorest workers will get the same chances? If the robots don’t get them, then house prices will.
If all this has inspired you to run even harder in the rat race, ThisIsMoney has also compiled a list of [5] the best paid jobs and biggest pay rises in 2016.
From the blogs
Making good use of the things that we find…
Passive investing
- How market crashes happen – A Wealth of Common Sense [6]
- Passive investors: Patient or dumb money? – Pragmatic Capitalism [7]
- An interview with Lars Kroijer [Podcast] – Canadian Couch Potato [8]
Active investing
- In defence of dividends – Todd Wenning [9]
- When do you average down? – Bronte Capital [10]
- Why I don’t use watch lists – Oddball Stocks [11]
- Do you know where the risks are in your portfolio? – Flirting with Models [12]
- Philip Green, hype, and pension deficits – The Value Perspective [13]
- 20 investment case studies [PDF] – UK Value Investor [14]
- You don’t want to miss a massive bull market – Alpha Baskets [15]
Other articles
- Evidence-based free throw shooting – Abnormal Returns [16]
- Why Forex is useless and dangerous for most investors – Oblivious Investor [17]
- The cash freeze – Pragmatic Capitalism [18]
- Keeping it up – SexHealthMoneyDeath [19]
- Lars Kroijer: Quit smoking and retire a millionaire [Video] – YouTube [20]
- New year, new Brexit rant – Simple Living in Suffolk [21]
- How passive shapes active management [Paper, PDF] – Credit Suisse [22]
Product of the week: Fancy earning 8% with a celebrity endorsement? Yummy mummy favourite Kevin McLoud is getting into the mini-bond game, and looking to raise £3m to plough into his social and environmental housing business. The Guardian [23] goes into the details, including the obvious risks.
Mainstream media money
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 of that site.2 [24]
Passive investing
- Nutmeg cuts fees for two-thirds of customers – Telegraph [25]
- Five ominous signs for the active management industry – Bloomberg [26]
Active investing
- Shareholders need to seize back control of corporate governance [Search result] – FT [27]
- Richard Buxton on running a patient active fund – ThisIsMoney [28]
- Sterling slump beats the Black Wednesday slide – ThisIsMoney [29]
A word from a broker
- The best performing investment trusts of 2016 – TD Direct [30]
- Housebuilder Barratt is yielding 7.2%, but uncertainty looms – Hargreaves Lansdown [31]
Other stuff worth reading
- Six financial personality types – which are you? [Search result] – FT [32]
- In two weeks the savings compensation limit rises to £85,000 – Telegraph [33]
- 10 ways to cut your tax bill – The Guardian [34]
- “Very unlikely” Providence mini-bond holders will get money back – Telegraph [35]
- Stop and acknowledge the role of luck in success – New York Times [36]
- 98% of Japanese adoptions are employers adopting staff – Business Insider [37]
- Becoming Warren Buffett [Trailer for new HBO documentary] – YouTube [38]
Book of the week: Kevin Kelly wrote New Rules for the New Economy a few years into the Web era in the 1990s. He was essentially right about everything coming down the Information Superhighway as we called it in those days, sucking on a bit of hay. The Inevitable [39] now applies Kelly iteration to its logical conclusion to a bunch of other emerging technologies. He was interviewed a few days ago by The Art of Manliness [40].
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- Original income includes sources of earned income, such as wages, salaries and pensions, and unearned income, that is, income from investments. [↩ [45]]
- 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”. [↩ [46]]