What caught my eye this week.
The results are in from last week’s poll (now closed) and in news that will shock no one, it turns out that the readers of a personal and investing website are in general earning much more than the average UK citizen.
Over 2,000 of you voted – thanks! Your votes confirmed that a majority of Monevator readers pay higher-rate taxes:
Indeed going by the poll results, more than a fifth of you pay additional-rate taxes.
That high score does slightly surprise me. The figure nationally is around 1% of the adult population.
Perhaps higher-earners are more likely to want to tell us about it in polls?
And maybe I should cajole Finumus into writing more mundane stuff about household accounts for the very wealthy among you?
Or maybe not: he’d have you putting the family home into an offshore vehicle that you securitise on the Moldavian Stock Exchange by teatime…
In a standout example, I learned this week that an old friend took home £600,000 last year.
I knew he was world-class at his job, and that his employer is the best in the field. But that field is not financial services – nor money-laundering, racketeering, or producing hip-hop records.
And my friend is a wage slave (still 15-hour days in his late 40s, he claims, at times) not an entrepreneur.
A bit more interrogation revealed 2022 was an outlier thanks to some massive bonuses, but still.
We were talking about general investing, and as my friends tend to he’d asked for some thoughts about something. In the subsequent conversation I’d guessed his salary – I thought generously – at about £150,000.
He looked at me without saying anything for a moment. Not unkindly.
Everyday high earners
Are you feeling hard done by? Remember my friend is an extreme outlier. Nearly everyone earns a lot less.
An annual salary of just over £60,000 a year puts you in the top 10% of wage earners:
At least I think it does. Unfortunately Statista restricts access to the source for this data to subscribers; I presume it’s from the ONS.
Note that if you randomly Google around, most reports discuss ‘household income’. That includes all sorts of non-salary income – and in many cases the earnings of multiple people.
It was my friend’s turn to be shocked when I said I’d only paid higher-rate taxes in a handful of years. Even after I explained I’d used SIPP contributions to mitigate the impact.
My friend has been prudent with saving and investing, and is no spendy oligarch. Lots squirreled away, mostly lives in a two-bed flat – though there is a holiday home and buy-to-lets – and one where the kitchen has been unusable for a year (another story).
Nevertheless, we were speaking a totally different language on income. I was in mild shock for the rest of the evening; I think he was in turn unsettled by my earnings profile, too.
He’s now looking to downshift his family’s life or even to retire – our conversation was basically about ‘the number’ – and is mulling doing a couple of years in a less pressured and more enjoyable role as an off-ramp.
A big salary cut, obviously. He reckons to about £150,000 a year.
You can know the statistics but it’s always different with revelations from friends. Whatever you tell yourself in the cold light of day, or from a soap box in the comments on a blog. (Anticipating? Moi?)
I walked the long way home, wondering for a bit if I’d done something wrong with my life. I decided I hadn’t – I couldn’t hack his work-life for a week – but it did make me think.
No bad thing. Just not too often!
Have a great weekend.
p.s. A couple of readers who have signed-up for membership were confused when they couldn’t access yesterday’s article on the site. Remember we have two tiers – essentially passive and active, though it’ll be a bit cloudier in practice. If you’ve joined the lower-priced Mavens cohort (thank you!) then you can’t read the naughty Mogul stuff. High-rolling Moguls can read everything. I’ll look for a way to make the paywall clearer.
FIRE update: second year anniversary – Monevator
From the archive-ator: The UK stock market’s worst-ever crash – Monevator
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
BoE set to raise rates above 5% as UK inflation disappoints… – Guardian
…causing mortgage lenders to hike rates and pull products – This Is Money
…meanwhile households have lost £5,455 to inflation in two years – Yahoo Finance
Which? wins campaign to protect free access to cash – Which
All-time low of 31% of Britons think it was right to leave EU – Sky News
The Londoner who lives amongst billionaires for £200 a week – Guardian
Switching to the best savings account annually tripled your interest since 2008 – This Is Money
Products and services
Shawbrook Bank’s new best buy one-year bond pays 5.06% – This Is Money
Borrowers told to brace for 5%-plus mortgage rates – Guardian
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor
Is Help To Buy coming back? – Which
Lenders are pulling ten-year fixed-rate mortgage deals – This Is Money
Netflix starts charging UK password sharers – Be Clever With Your Cash
Which shops offer the best value on lunchtime meal deals? – Which
Stylish new-build homes for sale, in pictures – Guardian
Comment and opinion
The market usually goes up (but sometimes it goes down) – A.W.O.C.S.
The Renters Reform Bill explained [Video] – Property Hub via YouTube
What if you run out of life? – 1500 Days
How some people get away with doing nothing at work – Vox
Long cycles – Humble Dollar
The City of London needs an intervention [Search result] – FT
Why investment clients are attracted to complexity – Advisor Perspectives
The best time of my life – Humble Dollar
Gold isn’t a convincing core asset for Larry Swedroe – Alpha Architect
A high tax primal scream – Simple Living in Somerset
Naughty corner: Active antics
Investment junk food – Behavioural Investment
Private equity trust discounts widen [Search result] – FT
Long-term buy-and-hold of yesterday’s winners is risky – Morningstar
Trend following in equities – Finominal
Optimal duration – Verdad
Great investors see things differently – Neckar
I don’t know – Ted Seides
Crypto o’ crypto
Kindle book bargains
Too Big To Jail: The Greatest Banking Scandal of the Century by Chris Blackhurst – £0.99 on Kindle
Amazon Unbound by Brad Stone – £0.99 on Kindle
200 Years of Muddling Through: The British Economy by Duncan Weldon – £0.99 on Kindle
The Moneyless Man: A Year of Freeconomic Living by Mark Boyle – £0.99 on Kindle
How melting icecaps and glaciers affect everyone [Graphic rich] – NPR
Weird, rare, and everywhere – Hakai
Full-year results from Tridos’ Thrive Renewables – DIY Investor
The scientists coaxing back nature with sound – BBC
All the arguments against EVs are wrong – Noahpinion
UK farm curbs greenhouse gases by making sheep burp less – Semafor
Robot overlord roundup
The man who put Microsoft in the lead on AI – Semafor
Vanguard CEO says AI will revolutionise asset management – PI Online
AI and the offline moat – Dror Poleg
Government to tighten AI rules amid fears of existential risk – Guardian
AI fake photo of Pentagon blast goes viral, spooks stocks – Yahoo Finance
Off our beat
The liabilities of success – Of Dollars and Data
How you brain tells the difference between reality and imagination – Quanta
Digital culture is literally reshaping women’s faces – Wired
The psychedelic renaissance is missing the bigger picture – Vox
Why are large companies so dominant? – Klement on Investing
Brexit has wrecked the UK car industry, but so has the government – Guardian
Sudden death – Slate
“True security lies in the unrestrained embrace of insecurity – in the recognition that we never really stand on solid ground, and never can.”
– Oliver Burkeman, Four Thousand Weeks