This too shall pass.
Always look on the bright side of life (à la Monty Python).
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The last 6 months media outlets have shouted that consumer debt is at its highest value since other era’s, though they state the value in £ pound terms rather than percentage terms.
Of course debt is higher in £ pound terms than the 1990’s or 1970’s because things cost more so the number will be larger.
What’s currently happening is a forest fire which will wipe out the weak and from that point will begin growth from afresh… like it always will.
Non of the middle class will fight together to protect what they have and the wealthier ones above are continuing to pounce on their freedoms & assets.
Regarding the newspaper sentence above, I still find it wild that people en masse would go out of their way to pay for a piece of paper which manipulated and lies to you. The better route would be for people individually to go and push themselves harder at skills and abilities to gain their own actual understanding of what’s going on. Rather than be told by a manipulative media outlet.
When you push yourself for more than a decade, your mindset can quickly respond to BS lies and PR campaigns naturally. So you can then in turn make better decisions and be much more confident as a long term investor.
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Don’t disagree with what you say overall; I never read the Mail, it was just an example I put up to show that these headlines are nothing new.
Of course there are winners and losers in whatever economic situation exists; it’s always been the case and it’s hard to see that ever changing.
You are absolutely right that more people need to educate themselves more about personal finance in general, and that should start in schools.
In my opinion, the single biggest flaw in the current economic setup of the world is the (possibly deliberate) reluctance of governments etc., to tackle this financial illiteracy. In my simple and simplistic head, the better off people are generally, surely the better news for the economy overall.
I cannot understand, and I’ve tried and tried to see this from all different perspectives, why so much wealth is concentrated in so few hands, and how that makes economic sense.
But what do I know.
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Why the dip this week?
(Sharecast News) - London stocks were still in the red by midday on Tuesday amid continued uncertainty over whether a US debt default will be averted, and as data showed that shop price inflation in the UK edged higher in May.
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I know all too well why the majority of wealth is concentrated in so few hands. You can generalise the answer by putting these people into two groups. I’ll write later.
Here is one quick hint posted today which goes hand in hand why the wealthy get ahead and stay ahead.
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You don’t get rich spending your own money. Spend other peoples.
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Bunch of very interesting links this week:
- 10 bad takes on this market including 5 Stocks Driving It
- Investment Mistakes Even Smart Investors Make and How to Avoid Them
- Why Down & Sideways Markets are Bullish
- Regret optimized portfolios and optimal retirement income
- Are we headed for a massive bout of deflation?
- Why are large companies so dominant?
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We sold our wealth, industries, and future economy to China in exchange for low rate products that have long since been sent to landfill.
They played us as the greedy fools we were, and now they have the last laugh.
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They also repeatedly de-valued their currency to make sure that their exports were attractive. It appears that we are playing China at their own game - and it is what more recently successful voters have been demanding, although probably unaware that in order to have competitive exports there are broader consequences!
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So much great reading here, this week:
- Vanguard updating their 10-year asset class return expectations for different markets
- Lots of interesting insights on factor investing
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Few interesting topics in this week’s review:
- How to rebalance your portfolio including Vanguard study on frequency
- The risk of owning equities declines as the time horizon increases, or does it?
- Become a passive Investing Ninja – the definitive guide to slashing ETF Costs and Taxes
- Is the Bear Market Over?
- Is a GDP Weighted Index a source of superior returns?
- The Power of Uncorrelated Assets
- The Fastest Rising Asset Classes in 2023
- Druckenmiller: AI is Dominating My Long Portfolio
- Universa’s Taleb on Inflation, Global Financial Markets, & Crypto
- New Measure of Firm-Level AI exposure
- Mapped: The Growth in House Prices by Country
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Can you feel 10% rates coming?
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Well the last 12 interest rate rises didn’t work, but I’ve got a good feeling about this one.
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I’m glad they’ve gone for a bigger increase as painful as it will be. Rate rises take time to have an effect and this should accelerate things, hopefully. I think the BoE needed to make a bit of a statement, too.
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No more QE in our lifetime imo
The majority of mortgage owners aged 30 - 45 will get a lodger, or partly convert their property to get a lodger for 2-5 years. These mortgage owners will also push heavily for pay rises twice a year.
For 30-40 year olds who are yet to purchase a property, considering Portugal, Spain or another great location with incredibly well priced properties may be a great option to ride out 5-10 years.
A property fall in the west would likely only really happen once all paths have been exhausted and ridden to the highest lengths and only then would the cracks fall through.
Tens of thousands of mortgage holders could take in a lodger or two, family could help out, grandparents could help out, mortgages could be extended, mortgages could switch to interest only and also be extended, people could aim for higher paying positions, pay rises could keep coming… there’s a variety of things which will take place for many years before a rare property market crash could take place, and by that time peoples pay may have risen faster than property prices and begin to catch up again, just like in 2019 when pay was getting extremely close for a generation of people to buy property, then cue the response to the pandemic… perfectly timed response when the west seemed to crave some kind of decade event that always seems to come.
This is now hunting ground for cash rich buyers looking for long term property & land accumulation. Go take a look at the more elite areas of southern UK like Glastonbury, Surrey and now upcoming areas of Hampshire - there are solo property projects and desirable property renovations taking place all over. The stock market gains are being taken and pushed into hard assets. It’s a thriving time to be cash rich.
The real question is what do 25-40 year olds do who have not got into a property suitable for their lifestyle? Personally I’d say you’ve been absolutely wrenched by the government, the Bank of England, the education system, the financial system, so one of the options I’d take is to completely change my own actions and where I spend money and completely sacrifice anything that does not align with my current target to get into a property to be proud of.
Bye bye tv licence, bye bye Waitrose, bye bye AA breakdown cover, bye bye £15pm sim hello £8pm sim O2, bye bye £2.49 bottles of water, bye bye fast food… money and where you spend it should become sacred.
Replaced with picnics, tennis, bike rides, always bring your own water… completely stop spending even £2 in a misplaced way.
This is a monumentously overly expensive period and I am not going to go into the cause because I know the causes I REALLY know whose failing & who has failed the country but like I said above, completely change even the smallest of actions and simply help to make certain things in the uk panic and fail, your money is yours and should not easily be extracted from you. During this period.
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