What caught my eye this week.
One big driver of the thousands of young economic migrants who’ve come to Europe and the UK over the past decade is said to be the spread of social media.
Now that the developing world can see – it all its influencer-filtered glory – how the West has been living all these years, many of world’s poorer citizens want a piece of it.
Wouldn’t you?
Of course we might say they should look to pull their own countries up instead. Strive for freer markets, better governance, more education, stronger property rights, and whatnot.
I agree but it’s easier said than done. While globalisation and capitalism have done a decent job of alleviating true poverty since the 1970s, from memory only a dozen or so developing countries have made it to developed status since the 1990s.
Also you don’t need to be an 18-year old student activist at SOAS to see the West still has multiple embedded advantages, which it strives to protect.
It’ll even adopt the role of victim to do so. Just consider the spectacle of the world’s richest nation bemoaning bullies and vowing to be make itself great again.
Get up and go
The point is though that as an individual the situation can look even more hopeless.
You have to rely on your country’s politicians and institutions to do the right thing. We increasingly can’t even rely on ours for that.
Indeed isn’t there an ironic tension that it’s the champions of individualism in the right-wing media who are the ones who most bemoan young men taking it into their own hands to try to better their lives?
Of course understanding their motivations – and even extending our sympathy – doesn’t mean we should let them act against the law.
Illegal immigration is an overblown and politically weaponised issue, but it’s a real one. Not only does it erode trust in our multicultural social fabric in the short-term, it can only scale badly in the long-term, given the disparity in global demographics.
So we have to draw the line somewhere. Much of the nastiness we’re seeing these days is a reflection of the developed world’s struggles to do just that. (Though to be clear plenty of it is stoked by opportunism from a resurgent far-right, too.)
Would you like an extra zero with that?
All that said, perhaps Barry Blimp – or at least his more hard-pressed children – might be finding it a bit easier these days to empathise with economic migrants motivated by unimaginable wealth abroad.
Because the fact is the West is not a homogenous bloc. And it’s becoming ever-clearer that the US and the UK in particular have been on very different trajectories.
Of course there are millions of poor and struggling people in the US as well as here. And at least ours have better healthcare.
But this Tweet that went viral from Monevator contributor Finumus highlights a real contrast:
If you consume US personal finance and investing media, you’ll come across this wealth disparity all the time. Casual references to $1,000 splurged at a casino or $20,000 spent on a jet ski on a whim or $500 concert tickets as part of an everyday Friday night out.
It’s not that we don’t ever spend like this in the UK. It’s that there seems to be a zero tacked onto the end of the typical well-off American’s fun budget.
Their truly disposable income comes across as an order of magnitude higher.
Mickey Mouse budgets
Here’s an interesting example from the past couple of weeks. The writer Aaron Renn bemoans a ‘middle-class squeeze’ that has created Have-VIP-passes at Disney World and Have-Nots:
[…] there are just a lot of people making a lot of money today.
A couple where I live who are both middle managers at Eli Lilly could easily have a household income north of $350,000. The median individual employee at Facebook makes $379,000.
This has produced asymmetric financial competition. It used to be that there were rich people, but the middle class wasn’t really competing with them. Rich people bought mansions or luxury cars, but it didn’t affect the average person. There weren’t enough rich people to affect how long it took you to get through the line at Disney World, for example.
Today, there are so many people with so much money that the middle class is now in direct competition with people who have vastly greater financial resources.
You might argue Aaron’s take undermines my point. Sure there are lots of richer people in America, but that’s because of growing inequality there too?
Well yes, except that here in the UK we don’t even really have much in the way of wage inflation at the top. And on average we have had stagnant real wages since the financial crisis:
That chart is from last year, but it’s too striking not to use – and nothing much has changed since except more of us are paying higher-rate taxes and there’s a bigger tax burden on employers.
Again, I know and appreciate the US has plenty of poor people. But Britain is frequently compared to the poorest State in the US – Mississippi – and in doing so we’re found to be worse off, per capita.
Not a good look for a nation that still considers itself amongst the leading ranks.
A plague on all your over-priced houses
What’s to be done about? Well plenty that isn’t. But just not shooting ourselves in the foot would help.
You wouldn’t want to make it more expensive to hire people, to overburden development, or choose to depress our wealth creators. And of course as a trading nation you wouldn’t impose permanently higher costs on the economy by deciding to leave the vast and prosperous free market on your doorstep.
At this point you might be hurrying to the comments to post your political point of view. But let’s face it, both sides have done poorly over the past few years.
Team Blue must take the lion’s share of the blame, thanks to their lengthy and shambolic stint in power that left us in this mess. But Team Red has been to the cavalry what Jar Jar Binks was to the war effort on Naboo.
Fortunately it’s still possible in the UK to get ahead financially, if you’re say a well-educated Monevator reader who saves and invests hard, uses tax shelters to the max, and you had the good fortune to be born before 1990.
However you can understand why some people jump on boats in despair at their own political systems.
Just be aware if you are tempted to cut corners that the US is destroying boats it doesn’t like in international waters. (It’s also urging we do the same).
Ho hum.
Have a great weekend.
p.s. We were a bit too imprecise about passwords in The Realist’s excellent debut article on preparing your paperwork ahead of your death. So please note it may be against the T&Cs – and even the law – to access some accounts after your loved one has died, if they were held in their own name. See this commentary from the Bereavement Advice Centre.
From Monevator
Expected return estimates for your financial planning – Monevator
When I die: financial affairs fit for the afterlife – Monevator
From the archive-ator: Optimising the All-Weather Portfolio – Monevator [Members]
News
Bank of England holds base rate at 4%… – Which
…with UK inflation stuck at 3.8% as food prices surge – BBC
Reeves mulls staggered stamp duty payments to boost housing market – City AM
Bank of England eases quantitative tightening to avoid massive losses – Sky
Households put a record £103bn into cash ISAs – Guardian
US tech firms pledge £150bn of investment in UK… – BBC
… and the US and UK have also signed a big nuclear power deal – Guardian
Half-a-million house sales collapse a year due to ‘antiquated’ process [Paywall] – FT
Taxpayers have lost £400m on Rishi Sunak’s Covid-era Future Fund – Guardian
Rolling Stone owner sues Google over AI summaries – Tech Crunch
The problem with taxing the rich [Paywall] – FT
Products and services
Nationwide Switch offer (3 x £175) – Be Clever With Your Cash
Valour debuts Bitcoin staking ETP on London Stock Exchange – Parameter
Get up to £200 cashback when you open or switch to an Interactive Investor SIPP. Terms and fees apply, affiliate link. – Interactive Investor
How do the free childcare hours work? – This Is Money
Nationwide cuts mortgage rates despite BoE keeping rates on hold – This Is Money
Get up to £100 as a welcome bonus when you open a new account with InvestEngine via our link. (Minimum deposit of £100, T&Cs apply, affiliate link. Capital at risk) – InvestEngine
How to collect and spend Boots advantage points – Be Clever With Your Cash
Are you owed a pension tax refund? – Which
Homes for sale for first-time buyers, in pictures – Guardian
Comment and opinion
Global trackers could make investors nothing over next ten years [Managers talking their book, but compelling graphs] – Trustnet
Investing long term is great. It also means you’ll see a crash – Chart Kid Matt
What’s going on with the stock market? – Darius Foroux
Assessing gold’s portfolio value [Good but nerdy] – DE Shaw
How to invest like it’s 1725: the revival of Lloyds ‘names’ [Paywall] – FT
Does financial success come at a social price? – Life After The Daily Grind
Tax strategies property investors should be using [Podcast] – The Property Podcast
Does it still pay to go to university? It’s complex – Guardian
Stress-testing the [US] 60/40 portfolio over 150 years – Morningstar
Navigating the unknowns of financial decisions – Humble Dollar
Compounding versus capacity – Arcadian
Thinking big as you approach retirement [Podcast/transcript] – Morningstar
Naughty corner: Active antics
A long interview with out-of-favour fund manager Nick Train [Podcast] – B.T.B.S.
Investigating tight credit spreads – Behavioural Investment
The risks of extreme concentration… – Verdad
…albeit some “have always been paranoid about size” – Harvey Sawikin
Starting a hedge fund: one year in – Bristlemoon Capital
(Properly) comparing bond yields across markets – FT Alphaville
The ins and outs of distressed investing [Podcast] – My First Million
Kindle book bargains
Flash Boys by Michael Lewis – £0.99 on Kindle
Alchemy by Rory Sutherland – £0.99 on Kindle
The Green Budget Guide by Nancy Birtwhistle – £0.99 on Kindle
Techno Feudalism by Yanis Varoufakis – £0.99 on Kindle
Browse our all-time favourite investing books – Monevator shop
Environmental factors
Can we feed 10 billion people without destroying the planet? – Mother Jones
UK could raise £2bn by taxing SUVs in line with Europe – Guardian
How will Peak District carbon capture plan work? – BBC
China is quietly saving the world from climate change – Noahpinion
How the UK’s largest lake became an ecological disaster – Guardian
Climate scientists saw the future before it arrived – Quanta
Robot overlord roundup
Google DeepMind claims ‘historic’ breakthrough in problem solving – Guardian
How people actually use ChatGPT… – Forked Lightning
…such as to get advice about personal finance and investing – NYT
Perplexity: an untidy history of AI across four books – Hedgehog Review
AI skepticism and Oracle’s big risk – Eagle Point Capital
Why one of the world’s most brilliant AI scientists left the US for China – Guardian
AI will change jobs before the data shows it – Kate Capital
This fairytale may shed light on how AI will change humanity – Guardian
Not at the dinner table
All the sad young terminally online men – Derek Thompson
Trump’s most brazen attack on free speech yet – Vox
Political violence and the role of public leaders – Strength in Numbers
Not since WW2 has the fight for liberalism been this urgent – Big Think
Less wrong – The Pursuit of Happiness
From Colombo to Kathmandu, youth movements topple elites – Guardian
Off our beat
Inside the [physical] Bank of England – BBC
Happier families: new ways of living – The Observer
The British war on slavery – Marginal Revolution
When Britain seized tiny island Rockall to foil the USSR – Guardian
If nothing changes, nothing changes – We’re Gonna Get Those Bastards
How Joseph Wright of Derby put science at the centre of his radical art – Aeon
And finally…
“Remember, things are never clear until it’s too late.”
– Peter Lynch, One Up On Wall Street
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I tend to assume that one of the US’s great advantages is “employment at will”.
I follow the Marginal Revolution blog but I can’t remember seeing any allusion to an economics paper trying to assess the matter. Odd, that.
Pfft. If you fancy some of the action, you’re good for a Trump Gold Card for residency. Go get some of those US salaries – if you’re white, rich and English-speaking (eve that funny dialect of the 52nd State) then the US has a heckuva lot going for it, wide open spaces, generally more clement weather if you avoid known hurricane zones.
Indeed if you are mobile and not tied to a location you can snowbird because of the useful range of latitudes.
I do suspect dearieme has a point – the US is much more flexible and advantageous to those with capital.
To me, the problem the UK faces over immigration is that it has become a lie told so often that it has become the truth.
Net result is that it’s become something the government has to “do something about”. Or else gloating grifter Nigel Farage sweeps to power via his usual menu of empty promises.
There was an interesting column in the Grauniad this week by someone who attended the London marches to observe and speak to some of those present. Upshot is that it’s pointless labelling Stephen Yaxley-Lennon, his ilk and his supporters as “racist”. It just bounces off them. Cognitive dissonance is at play and many are able to tell themselves that they’re not racist, far right or whatever, they are just honestly concerned about the invading hordes of foreign rapists etc.
As with Brexit, simply telling the believers that they’re idiots is not a functional or compelling argument.
The daily grind article: one commenter animadverts upon “boring, identical, monotonous, wealthy London elites”.
If he’s found that only wealthy London elites can be boring, identical, and monotonous then he’s met a narrower spread of people than I have.
To be fair I have spent no time among wealthy London elites so maybe they can claim some sort of World Championship Ultra Unique measure of boring monotony. And Londoners in general always seem rather boring to me anyway, with their endless bloody whinnying about the best way to travel from X to Y. Maybe that’s what gets his goat?
Can’t say I’m finding the pivot to political blogging that interesting.
@Vilehackwriter — Time must be speeding up for you in the political whirl, is I think that was from the end of August. (It was in Weekend Reading 30/8 🙂 )
https://www.theguardian.com/commentisfree/2025/aug/29/asylum-hotel-fascist-asylum-protests-politicians
Or if it was specifically from the march then I guess it’s a meme gaining traction.
It’s correct of course. There’s a centre ground where the discussion should happen where it’s too often not happening.
I know this because as a writer with a modest public platform, I get it at different times from different sides! 😉
@Baron — So you keep saying. At least three times now, perhaps four.
Appreciate Monevator isn’t for everyone, big world out there to find what you’re looking for, no hard feelings. 🙂
About that £40,000 salary, it does seem very low even for the UK and he won’t get very far in London on that. I didn’t wish to venture into the Xitter swamp [edit: sorry, Reddit, but same thing] to get more context but … the “nonprofit sector” is presumably charities, and I’m rather glad that they don’t pay 6 figures to middle managers. If “Mr Tooth” was able to set aside his ethics and work for a bank or FAANG in London, he’d get something more in line with his expectations. If he could get a job offer at all. The jobs market for programmers & IT managers is down in the dumps worldwide at the moment.
Unfortunately, we have arrived at a position that is uncomfortable for most folks, stagnant wage growth, higher taxes being squandered on illegals, police failing to keep the peace, the NHS struggling, people enduring fuel poverty with the highest electricity costs in the developed world and for what greater collective benefit?
We have had a series of second rate politicians of all hues who have looked at 2nd and 3rd order problems. No wonder, the Brits, who are remarkably phlegmatic have had enough and are turning out in their thousands to make their feelings known. It’s a turning point and Kipling was right to warn that elite condescension towards provincial England is a dangerous path: ‘When he stands like an ox in the furrow – with his sullen set eyes on your own, / And grumbles, “This isn’t fair dealing,” my son, leave the Saxon alone.’
Surprised we have not saw as much coverage on France strikes and the general state of affairs. I know, a) this is fundamentally an investment blog, and, b) France has a history of striking/protesting that maybe means it is not news yet, but the situation they find themselves in may be one other countries are going to have to grapple with soon enough. Too high deficits, too much debt, no desire or ability to make changes. This is going to lead to financial consequences, France is just hitting it first due to their political landscape and the fact they have been slower to adopt the bigger changes elsewhere that ease the situation (eg retirement age).
#9 Ah yes, those Saxons coming over and stealing our jobs…
I did note the first time buyer properties via the link started at £290k, that doesn’t help. The government has made good moves on planning and building but it needs to happen much more quickly.
I too am concerned with the inclusion of politics in Monevator. The problem with politics is that it tends to cause headed arguments rather than enlightening discussion.
You should watch a couple of Ramit Sethi’s YouTube “money therapy” sessions for an introduction to Americans who think they are poor but are on salaries that most British people could only dream about!
But they do flirt with the constant danger of bankruptcy if they need anything other than minor healthcare.
For US Vs UK salary figures you really have to take off around 20% from the US salary to make it fair. In the US (when I worked there anyway) I worked 8-5 with a two weeks holiday (only one week the first year of employment *and zero parental leave). The UK would generally be 9-5 with five weeks holiday.
This would mean a US salary of $130,000 would come down to $104,000. Then consider that their 401k/pension contributions are lower than here and you can knock a bit more off.
Also, take into account the current weakness of the pound makes the US salary appear more.
Add in the fact that there is not really a equivalent of an ISA there (if you’re a high earner) and you can only put $20k into your pension then a lot more of your money disappears.
Saying all that, I do feel a lot poorer after moving back to the UK….but have a better life balance, although without a drive-thru margarita bar!
@Thaxted — Thanks for explaining your thinking.
The fact is we’ve had politics in Weekend Reading on Monevator pretty regularly for the best part of a decade, and it wasn’t unknown on the site before that.
e.g.
https://monevator.com/young-cant-afford-a-house-youre-getting-shafted-by-the-government/ (2008)
https://monevator.com/why-i-dont-want-gordon-brown-to-cut-my-taxes/ (2009)
…so in the mix for nearly 20 years! 🙂
I try to keep the tempo to once a month or so, though I’d agree it has crept up a bit recently.
To be fair, from my perspective political risk is currently off-the-charts given the dangerous antics in the US, and also people are saying they’ll elect one of the most economically damaging figures in recent British history in the next General Election, so it is a live subject.
What’s more, government economic policy *is* being driven by political considerations, not fundamental economic ones.
The government is looking at what it can get away with, not what would be the best long-term strategy, when it chooses where to tax, for instance. It doesn’t remind voters we’re £100bn a year poorer (/£40bn poorer in tax receipts) because of Brexit because it doesn’t want to upset Reform voters. Etc etc.
I’d be concerned — and indeed usually avoid or edit out — stuff like “fill your ISA because evil Rachel Reeves / Rishi Sunak is an idiot who greedily wants your money” in an article about tax shelters, unless it was clearly just there for a bit of colour.
Finally my experience is that people who complain about the political content of my posts don’t share my politics. Not exclusively by any means, but that’s the tendency.
Nothing wrong with not sharing my politics (well, economically you’re wrong but not on the other stuff) but it does leave me a little jaded when I read comments suggesting what I write on my website.
Also, these posts don’t do badly. I don’t see a jump in people quitting the newsletter or whatnot. Someone flounces off now and then but it’s rare.
I think most people understand why they’re in the mix on a financial site, and actually see them as broadly even-handed. (In my approach, if not in my conclusions. So there’s no economic argument for Brexit, say, but I’ve never complained about people holding the (minority) max-sovereignty motivation).
FWIW I’ve had two emails this morning praising the post, one of which from a reader I’ve never heard from before who says it is “spot on”! That is unusual but which sort of amplifies my point.
You can’t please everyone but you can be inauthentic or disingenuous. I’ve no intention of running my own website to be either of those things. Cheers!
I have some contact with non-profit staff in the UK and US. I suspect a few things are going on here.
Non-profit salaries are much higher in the US, but the organisations, activities – and resulting pressures – are often much bigger too.
Thanks to the loss of USAID, the non-profit sector in the US is being decimated. Some organisations are cutting staff by 40-50% globally, and starting with the US because, frankly, there are fewer employee protections than in Europe. Add in the US govt taking an increasingly hard line against civil society organisations, it’s easy to why some are considering a move overseas.