Why we're so dumb when it comes to money
🔸 Plus: The 10 biggest individual taxpayers in the UK 🔸 Rent in London hit a new, horrible record 🔸 The government is considering creating 1% mortgages.
Hello! Here’s today’s 2-minute guide to demystifying money and making you richer
Yesterday’s markets
S&P 500: 4,904.18 ⬆️ 0.21%, ⬆️ 3.41% YTD
FTSE 100: 7,635.09 ⬆️ 1.40%, ⬇️ 1.12% YTD
Bitcoin: $41,983.10 ⬆️ 5.16%, ⬇️ 6.01% YTD
GBP to USD: $1.2715 ⬇️ 0.10%
GBP to EUR: €1.1704 ⬆️ 1.47%
Why we’re so dumb when it comes to money
British people hate talking about money. We’re taught from a young age that it’s rude to ask about money, even among your loved ones. British people find money harder to talk about than their mental health. And we use some of the most difficult, complicated, unsexy words to talk about personal finance — pensions, ISAs, SIPPs, and so on.
The result is that Brits are some of the least financially savvy people on the planet.
Earlier this week, Stephen Welton — the boss of a £12 billion investment bank — appeared on Radio 4’s Today show and described just how ignorant we all are compared to folks in other countries. He said:
“If you go to Australia or Canada people will talk about their ‘supers’ [superannuation plans]. What am I invested in? And they actually know what they’re invested in. In the US they talk about their 401(k) plan. In the UK, nobody talks about their pensions and perhaps crucially nobody knows what their pension is invested in.”
The stats bear him out
73% of Brits (50 million people) fall below the Centre for Economics and Business Research’s benchmark for financial literacy.
One-third of people in the UK who have jobs aren’t saving at all.
Among those who are, average savings are just £33,500 by the time they hit their 50s.
To achieve a “comfortable lifestyle” once you have stopped working, a single person should have saved £645,000, according to Quilter, the wealth management group.
See the source for these stats here.
The purpose of Moneyin2 is to fix this
We want to help you, MI2 readers, get on the path to financial security and independence.
Whether you're a young professional, a gig economy worker, a small business owner, or someone who is starting (or re-starting) from scratch, we're here to help you build a financial future you can be proud of.
You might be saving for a house, for retirement, or for your kids. Maybe you want FIRE (financial independence to retire early). Maybe you just want to know whether you should buy Bitcoin or not. Maybe you just don’t want to be poor.
We’re going to tell you how all these Free Money Schemes work
One of the stupidest things the British ever did was to call their cash-based personal wealth — their savings and investments — “pensions”. It’s impossible to get anyone in their 20s interested in “pensions”. The word itself is old-fashioned — it was originally borrowed from Latin and first appeared in English in the 14th Century.
Pensions should really be called “Free Money Schemes”. Everyone should know about them and everyone should have one.
You don’t need to be wealthy to start saving and investing. In fact, you should especially start saving and investing if you’re broke. You can start with loose change. You don’t need specialist knowledge to make more money than professional investment managers. The tools are available to everyone, even if you’re a freelancer or don’t have a traditional job. They come in all sorts of different flavours. There is one for you.
We’re going to break it down and make it idiot-proof. We’ll translate all the jargon — ISAs, SIPPs, mutual funds, gilts, all that crazy stuff — for you.
We will give you all the secrets that sophisticated, successful investors use every day with their own personal money (they’re not that hard to learn!)
With luck, we’ll even help you get rich.
Thanks for subscribing. Stick with us!
And for dessert …
Here’s the list of the 10 biggest individual taxpayers in the UK. The ranking includes Formula 1 boss Bernie Ecclestone, Bet365 titan Denise Coates, Wetherspoons owner Tim Martin, and vacuum inventor James Dyson.
Is this the best-paying bank in the world? Some 23-year-olds at Perella Weinberg Partners may have made $600,000 last year.
Rent in London hit a record high of £2,631 per month, according to Rightmove. “We can’t keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up,” says Tim Bannister, the company’s director of “property science”.
The government is considering creating 1% mortgages. You’d only need to save £5,000 to buy a £500,000 pad. Of course, the monthly payments will still be a problem …
The average profit from selling a house in the UK last year was £102,000. Not bad.
Burger King employees are now required to say “you rule” to every customer and offer them a crown. This is either cringey or hilarious.
Cat-eye glasses for men will make you look more chiselled. Maybe.
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Photos: NBC via Giphy; Freemoneyday via Flickr; LG via Flickr.