Good reads from around the Web.
I have greatly enjoyed reading blogger Ermine’s lambasting of the more delusional middle classes over the years.
I think he is a canary in the coalmine – one of their own1 [1] who speaks truth to (fading) power, like a court jester in a cozy cardigan.
I am highlighting Ermine’s latest rant [2] simply because I wish I’d written the metaphor he deploys while explaining how globalization means the world’s workforce is chasing down on comfy middle-class lifestyles:
“They want to eat your lunch and your nice sinecures where Mr Wealthy but Dim used to cling to the pipes of capitalism like slime moulds slowing down the system a bit.”
Wow. Write a book man!
Meanwhile, over at the Financial Times [3] (search result) Merryn Somerset-Webb is typically brilliant in explaining how political meddling and the resultant stupid tax and benefits system is turning financial common sense on its head.
She usually tells young people:
“If you want to get rich, stay rich and retire in style, I say, avoid taking on too much debt, save early, save often, put the money away in cheap tax efficient investment products and let maths do the work for you.”
But?
“But the more often I say this to the young, the more I think to myself that it isn’t a message for the modern world, filled as it is with distorting financial incentives.
Working and saving hard might be one way to have a go at creating a reasonable retirement.
But, perhaps what I should really be saying to my students is that a much better route to wealth is to work 16 hours a week, borrow money to buy a house on the side, and to devote the rest of your time to being really nice to your relatives in the hope that they will favour you in their wills.”
As for me, here’s my message, whether you’re a middle-class ‘meh’ income earner still dreamily following your parents’ scripts or a young person wondering who is looking out for you.
Nobody is looking out for you.
That is why you must learn how to be a capitalist [4] for yourself.
From the blogs
Making good use of the things that we find…
Passive investing
- The role of luck in your portfolio – A Wealth of Common Sense [5]
- Beware of bad data [Canadian, but relevant] – CCP [6]
- Comparing fund platforms: A case study – DIY Investor (UK) [7]
- The intellectual case for international stocks – Oblivious Investor [8]
Active investing
- When the next big crash comes – The Reformed Broker [9]
- 5 profitable, debt-free dividend growers – UK Value Investor [10]
- Is it now smart to be dumb? – The Investor’s Field Guide [11]
- 10 non-investing quotes with great lessons – Clear Eyes Investing [12]
- Amortisation: Ignoring the bad stuff – Richard Beddard [13]
- The value and pricing of cash – Musings on Markets [14]
Other articles
- 3 paths to spending like a Jedi – The Escape Artist [15]
- What stuff really delivers value? – Under the Money Tree [16]
- 5 ways to start investing – Save the Student [17]
- Gifting the inheritance away – Keeper of the Cauldron [18]
- Big raises and lifestyle creep – Nerd’s Eye View [19]
- Annuities are more useful than understood – Squared Away [20]
Product of the week: The trouble with taking money out of a six-year old bull market is that you have to put it somewhere. With ISAs full of shares and the Santander 1-2-3 [21] account fully topped up, a young middle-aged man’s thoughts naturally turn to premium bonds, where the limit is set to be raised [22] to £50,000. I still haven’t bought any, despite following them [23] for years. The Guardian [24] also summed up the pros and cons this week.
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 [25]
Passive investing
- Roth: Can indexing become too big? – AARP [26]
- Burton Malkiel: Smart Beta is just smart marketing – AP [27]
- Swedroe: No refuge in dividend stocks – ETF.com [28]
- Are you devoting too much time to niche asset classes? – Morningstar [29]
Active investing
- 9 AIM shares to buy and hold forever… – Interactive Investor [30]
- …and 10 expected to grow their dividends – Telegraph [31]
- The young Wall Street traders who’ve never seen rates rise – Bloomberg [32]
- The tanker market’s warning to oil bulls – Bloomberg [33]
Other stuff worth reading
- 8 reasons you make bad decisions with money – Guardian [34]
- Carl Richards: Short-term, go for the bird in the hand – NY Times [35]
- Patagonia: The anti-growth company – NY Times [36]
- Michael Lewis: How crazy we all are – Bloomberg [37]
- Market crashes haunt investors for decades – Bloomberg [38]
Book of the week: Everyone knows we’re nuts these days – an almighty stock market crash like 2007-2009 will do that to people’s perceptions. No wonder that behavioral economics has become the new orthodoxy. Get a longer term take from one of the gurus in the field, Richard Thaler, with his new book Misbehaving: The Making of Behavioral Economics [39]
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- Yes, I am going to pull the ridiculous working class roots card here for kicks. I wouldn’t have 10 years ago, but then I started to meet the families of proper middle-class people, which was eye-opening to a young-ish lad raised in the far-flung provinces. [↩ [44]]
- Note some FT 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”. [↩ [45]]