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Weekend reading: Healthy, wealthy, and shut-eyes

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What caught my eye this week.

I stuck my oar into a Twitter debate this week, after economist Julian Jessop produced a graph purporting to show that the UK has not grown much more unequal post-Thatcher:

I responded that if we assume the data is right, then it’s still interesting that things don’t feel that way. So why the disconnect?

I am sure one reason is house prices. Those who have been on the housing ladder for decades – especially those who can help their own kids on – don’t seem to understand how un-affordable prices for the young have fractured society.

Perhaps that doesn’t show up in overall statistics of inequality because older would-be poorer citizens were made richer by rising house prices? I don’t know.

The other reason I put forward was Instagram. The fabulous lives of celebrities, influencers, and the several thousand photogenic cats and dogs made famous by social media cast a pall over our realities.

In the old days the Jones’ lived next-door, or perhaps across the street. Now they’re in your pocket, for many people day and night.

On the spectrum

It all points to new, technology-enabled (or perhaps enfeebled) ways of feeling rich or poor, which reminded me of an excellent blog post by US writer Morgan Housel.

Commenting on how the super-rich can’t help but make even the ordinarily rich feel poor, Housel writes:

Past a certain income the most difficult financial skill is getting the goalpost to stop moving.

And today’s level of global wealth has moved it a town over.

Housel then proposed a new spectrum of financial wealth, described by words, not numbers – because numbers don’t seem to tell us the whole story anymore.

While there are categories on the list I’d feel prouder to belong to, I plumped for ‘Health Wealth’ as my current status:

You can go to bed and wake up when you want to. You have time to exercise, eat well, learn, think slowly, and clear your calendar when you want it to be clear.

…which is gratifying, because I’ve been reading Why We Sleep? by Matthew Walker, and it’s life-changing enough to have seen me buy some new blackout curtains!

Where would you place yourself on Housel’s spectrum? And are there any categories he’s missing?

Have a great weekend!

p.s. Monevator has been ranked as the #1 UK personal finance blog by Vuelio. Several other good blogs on that list, too.

From Monevator

Lars Kroijer on…hedge fund mimicking ETFs, checking your portfolio, and minimal risk assets – Monevator

By Brexit standards, the debate after last week’s post is worth reading for views from all sides – Monevator

From the archive-ator: Types of entrepreneurs – Monevator


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

Credit card interest rates have hit a 13-year high – ThisIsMoney

Bank split on rates as it warns Brexit deal would hit growth – BBC

UK investors dump equity funds at record rates – Money Observer

Scrap entrepreneur’s tax relief, urges former HMRC head – Guardian

Watchdog warns UK fund managers to avoid Woodford liquidity trap – Reuters

‘Greta Thunberg effect’ driving growth in carbon offsetting – Guardian

Zero-fee funds is part of the ‘re-verticalization’ of asset management [Industry]Institutional Investor

Record US personal savings of $1.3trillion are one reason why the US bull market can continue – Investing Caffeine

Products and services

Putting the AI into financial advice [Search result]FT

Vanguard vs Dimensional: Who has delivered the higher returns? – Evidence-based Investor

Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter

Goldman Sachs teams up with Nutmeg to offer ISAs in the UK [Search result]FT

Plugging into the cost of charging an electric car – Guardian

Interactive Investor reveals its pension millionaires favour Vanguard, Terry Smith, and Nick Train – ThisIsMoney

Comment and opinion

The perma-everything approach – Pragmatic Capitalism

How to spend your money, according to science – Big Think

Bitcoin is a game – Moneyness

Why are we being herded into buying part of the world’s biggest polluter? – Patrick Collinson

Realistic investment results – Of Dollars and Data

Translating US financial independence jargon into UK English – The FI Fox

Money Box Live: How to Retire Young [Audio, featuring Barney]BBC iPlayer

Early retirement can accelerate cognitive decline – Science Daily [via Abnormal Returns]

Ergodicity [From 2018, but well worth reading for the counter-intuitive maths]Sid Shanker

Naughty corner: Active antics

What went wrong at Woodford [Video] – Stockopedia via YouTube

Only holding global stocks near all-time highs captured most upside with lower downside – Allocate Smartly inspired by Meb Faber

Tom Lee: The four most important market indicators [Video]Reformed Broker

America’s decade – Albert Bridge Capital

The fool’s gold of emerging market valuations [Search result]FT

Anatomy of a Sell decision: The Restaurant Group – UK Value Investor

Talk Your Book: Greg Zuckerman on Jim Simons & Renaissance Technologies [Podcast]Animal Spirits

Treat each fight as if it were your last, because if you don’t it could be – Klement on Investing

Investors seek to cash in on Airbnb via SPVs [Search result]FT

Brexit and the General Election

“Rambling” Boris Johnson contradicts own government’s claims on his Brexit deal – LBC

Investors fear Labour policies ahead of the election [Search result]FT

Liberal Democrats, Greens, and Plaid Cymru agree ‘Remain Alliance’ pact – Guardian

Kindle book bargains

Radical Candor: How to Get What You Want by Saying What You Mean by Kim Scott – £0.99 on Kindle

The Complete Guide to Property Investment by Rob Dix – £0.99 on Kindle

RESET: How to Restart Your Life and Get F.U. Money by David Sawyer – £0.99 on Kindle

Way of the Wolf by Jordan Belfort [aka The Wolf of Wall Street] – £0.99 on Kindle

Off our beat

Experience: My face became a meme and I turned it into a career – Guardian

The new dot com bubble is here: it’s called online advertising – The Correspondent

Biology is eating the world: A manifesto – Andreessen Horowitz

The four stages of Fintech start-ups – The Basis Point

Any amount of running reduces the risk of early death, study finds – Guardian

False memory – indeedably

Annoyed – Seth Godin

And finally…

“Budgeting is about telling each pound that comes through your hands where it should go, and how it should be used. In other words, budgeting is forward-looking. It’s about deploying your resources in the best way possible, like an army general planning the deployment of troops”
– Pete Matthew, The Meaningful Money Handbook

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{ 70 comments… add one }
  • 51 Chris November 9, 2019, 10:06 pm

    @Investor – Which block out curtains did you choose? I have been looking around too after reading the same book!

  • 52 Peter November 10, 2019, 2:22 am

    In comment 47 you wrote “@zx81” – that looks pretty disrespectful to ZXSpectrum48k.

  • 53 Matthew November 10, 2019, 7:57 am

    @oeter – lol i was wondering if oeople would notice! My dad had a black and white zx81 with 1kb inbuilt ram, he expanded it with 15kb additional ram – 15x!!!! – just shows how quickly things advanced back then, and then the spectrum had colour! But I skipped that part and was given a commodore 64 with lots of dizzy the egg games, and the cassette drive was a massive convenience over typing up code from magazines. Later on my dad bought a 286 “powerhorse’ which ran windows 3.0 which was fantastic, but windows 3.1 was just out of reach and barred me from a lot of games

    After freeserve ISP (paid dad pocket money for extra minutes) we used IC24 for free, which took about 30 minutes just to connect after about 60 attempts

  • 54 HariSeldon November 10, 2019, 10:46 am


    I’d take the Dimensional vs Vanguard study with a pinch of salt. In the US Mark Hefner of IFA has promoted Dimensional for years, I used to listen to his podcasts 10 years ago before they went the Vlog and article approach, the evidence based investor is often linked to by IFA. IFA have published comparisons with other fund companies for years and it’s a very common US approach in advertising to rubbish the competition with selective comparisons.

    The trouble with all stats is the selection bias when you are trying to make a point…

    DFA is heavy on Small and Value, Value has done poorly for years…enough said. ( it will turn some time though !)

    DFA is effectively offering active investing by using models to tilt index portfolios, it’s a black box but whilst cheaper than most active investors you pay an additional fee for access via an advisor.

    If you accept the zero sum game of active investing and that costs really matter then you can remain a Vanguard fan !

    Not forgetting that Vanguard run a lot of active funds…

  • 55 Kraggash November 10, 2019, 1:08 pm

    “– 1) in real terms house prices compared to incomes are 2.5x higher today”
    But paid for, in the vast majority of cases and for the majority of the mortgage duration, by one salary. Mostly, you got a mortgage based on your salary, and maybe taking wife’s into account. So wife had a job at application time, but gave it up for child rearing etc. Two (decent) incomes for a couple was very rare.

    Now, many, if not most, couples applying for a mortgage have two (good) salaries. More cash available = higher house prices. Probably accounts for most of the doubling.

  • 56 Algernond November 10, 2019, 2:12 pm

    @Matthew. The ZX81 RAM pack was 16K:
    (it was indeed 15K additional RAM, as it by-passed the in-built 1K).

  • 57 Gooey Blob November 10, 2019, 3:56 pm

    The ZX81 did indeed have a 16K RAM pack, I still have a couple of machines in my spare room. Not to mention several ZX Spectrums and a couple of Amigas. However, the least said about the Commode 64 the better…

  • 58 Anthony @ dividendyieldlive.com November 10, 2019, 6:06 pm

    Oh the old Speccy, conjours mixed emotions. The memory of crossing ones fingers and praying that game would load as the audio tape turned never gets dulled by time.

  • 59 Steve21020 November 10, 2019, 9:42 pm

    Well, if you’re talking about the old spectrums etc, anyone remember Oric? I think it was pretty horrendous and a year or so later, having just got my wages from some fill-in student job, I got an Amstrad 64. Then my uncle in the USA gave me books of games which I had to type in myself. I think one was a very early attempt to mimic AI, called Eliza or something similar. We had a computer game shop in town that sold the cassettes and I remember Codename Matt and a few Classical adventure games, finally with graphics. PS I can’t stand games now, but very occasionally play Duke Nukem 3D, much to the amusement and sad, understanding nods of my grown up kids!

  • 60 Matthew November 10, 2019, 9:55 pm

    I get the feeling these early computers were more luxury gadgets based on excitement than practical, if you wanted practical you’d buy a typewriter.
    This excitement is what culminated in the dotcom boom and the crash earmarks the new, slower reality, but even so since then mobiles and FANG companies have come a helluva long way and AI and quantum computing and further automation are 3 more exciting tech booms still to come, possibly outside of FANG.

    Even now if you were to put tech improvement as a % it’d still be well above inflation, i’d be curious what number we can put on it

    I remember loving CD encyclopedias!
    Generation Z wouldnt even know what a CD is, but mp3s and cloud backups are fantastic I think, I buy games on steam now, since it’ll be kept up to date and no risk of scratched disks

  • 61 Bob The Dinosaur November 10, 2019, 10:33 pm

    @Algernond I also had the joy of using the wobbly ZX81 RAM expansion pack, but I don’t think it ever occurred to me that it was actually disabling the on-board 1KB of RAM!

  • 62 Matthew November 10, 2019, 11:13 pm

    My dad said it seemed inconcievable that you’d ever need the whole 16kb typing in programs, more space than you’d ever need!

  • 63 Ecomiser November 11, 2019, 2:33 am

    @Mathew (60) Those early computers weren’t gadgets, they were toys. Kept their owners amused for hours at a time, and years in total, with very little that could be claimed to be useful resulting from it. More fun writing and debugging programs than playing the games though. 39 years later, they’re still toys.

    e-Tech has been improving exponentially, doubling every year in the 60s, then slowing a bit to doubling every two years in the 70s,80s,90, and 00’s . That’s compounding at 100% per year, dropping to 50% per year. Makes 2%-5% inflation, or even 25% inflation at its worst in the 70s look small.

  • 64 steve21020 November 11, 2019, 9:44 am

    — ‘Those early computers weren’t gadgets, they were toys. Kept their owners amused for hours at a time, and years in total, with very little that could be claimed to be useful resulting from it.’ —
    Not quite. I remember spending happy hours writing a simple program in Basic to produce prime numbers, which, considering I was pretty bad at Maths, was a great achievement at the time. Tweaking the A.I. Eliza program taught me much about how language works and a bit about psychology. Then there was a program where I had to get the Eagle lander down safely on the moon. Very educational for learning about rate of descent, influence of momentum, energy related to square of velocity etc. Then there were gambling games where I learned plenty about probability, all without touching a penny of my student grant. All on an Amstrad 64K. Eeebygum, they don’t make computers like they used to. 🙂

  • 65 Ecomiser November 11, 2019, 1:52 pm

    As I said, toys, Educational toys, similar in concept to Meccano, which taught a previous generation about engineering, and great fun working out for yourself what was already well known, but toys nonetheless. I learnt quite a bit about ballistics programming a tank battle game, and quite a bit about compact programming ripping off Jet Set Willy.

  • 66 Berkshire Pat November 11, 2019, 3:43 pm

    Ah the ZX81 wobbly RAM pack. I couldn’t afford the official one, which was about £50 I think, so got a cheaper one for ~£35. Still a lot of money in the early 80s
    They may have been ‘toys’ in that you couldn’t really do any useful real world work with them (word processing, spreadsheets etc) but I learned a heck of a lot about programming, and also built my own I/O board to turn things on and off from a program

  • 67 Derrick November 11, 2019, 5:21 pm

    Income inequality is only one relevant measure.
    As others have pointed out wealth inequality is important as is the relatively fixed costs of living (linked to wealth through housing costs) affecting those on lower incomes more.
    More worrying for me is the reduction in inter-generational mobility in the recent decades. Your parent’s earnings have always been the biggest predictor of your income, but this reduced substantially in the post-war period. The trend is now back the other way.
    It’s hard to defend inequality based on merit, when the evidence suggests it’s getting harder to escape your parents socio-economic position.

  • 68 ermine November 11, 2019, 11:09 pm

    > Ah the ZX81 wobbly RAM pack. I couldn’t afford the official one

    Me neither. I built my ZX80 at university, managing to get it working first time, which for soldering God knows how may chips was remarkable, and wire-wrapped a 16k RAM pack at my first company. That RAM took a lot of buzz-testing to get right.

    > Those early computers weren’t gadgets, they were toys. Kept their owners amused for hours at a time, and years in total, with very little that could be claimed to be useful resulting from it.

    I’m not so sure. There were things you could do with those that you couldn’t do with the tech of the time. That crappy ZX80 plus RAM board helped me with some analogue filter design. Sure, I could have done it with pencil and paper and a calculator, but it let me iterate a few different versions quickly.

  • 69 John @ UK Value Investor November 14, 2019, 6:17 pm

    My Spectrum 48K was definitely a toy and nothing but a toy. And thanks to Daley Thompson’s Decathlon, I have several destroyed joysticks to prove it.

  • 70 Rosie December 1, 2019, 9:53 pm

    @Chris You want blackout Duette blinds with side channels. Worth every penny. Eye masks only go so far.

    They block the horrific street lighting and we now sleep better and have stopped clenching our teeth at night (which resulted in tooth loss and a crown and the blind cost is less than the dental work, if you need another way to look at it).

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