Category: Analysis & comment

How much should you save?

FIRE v London5 Comments

A common question, especially for ‘normal’ people in their rare moments where they ever think about saving, pensions, or their financial planning, is ‘how much should I save’? It is a key question. Unfortunately, a lot of the typical answers you’ll hear/read are misguided or even wrong. Instead, I think anybody asking this question must be told three things.

For example, I was riled recently by something that the (normally sensible) Wealth Dad posted on Twitter:

Wrong-headed advice for many people

I don’t mean to pick on the Wealth Dad because he is far from alone. A quick Google search of ‘how much should I save rules of thumb’ yields the following:

The 50/15/5 rule of thumb
Bankrate’s rule of thumb: save at least 10% of your income towards your retirement

It’s not surprising that investment firms like Fidelity advocate fairly chunky savings rates. But it isn’t just them.

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June 2020: Disadvantage month

FIRE v London3 Comments

Well, it’s nice having some new news. I would struggle to mention any big stories over the last six months except Brexit and Covid-19. But June has been ‘disadvantaged minorities’ month.

The month began with the awful George Floyd story ricocheting around the world.

Thousands around the world protest against George Floyd's death in ...
Protests over George Floyd’s death spread to Europe (Source: CNN)

My first reaction was to think of this as a very American thing; my conclusion from reading Robert Caro’s masterful biography of LBJ was that America not having apartheid to the present day was a close run thing. And the American policing system is in a western world of its own, helped by those archaic constitutional clauses about the rights to form militia / bear arms / etc. Closer to home, I didn’t approve of the ‘anti statue’ brigade, siding with those who see it as rewriting history.

Edward Colston statue pulled down in Bristol, England during ...

A month later, and my thinking has changed significantly. I’ve woken up to some of the ongoing issues that are easy to ignore in the daily grind. I’m slightly more aware of the UK’s own role in the shameful American legacy (whose colonies were they, after all, when slavery was legalised in 1640?). I now concede that statues are as much style/decoration as they are historical record, and that a town square’s/Oxford college quad’s choice of statue can be seen as a contemporary aethestic choice. I don’t want to see statues destroyed, but I do accept that some might be better moved to a museum rather than left in pride of place.

Is Oriel College, Oxford, right to remove the statue of Cecil ...
Oriel College, Oxford
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How sustainable is your investing?

FIRE v London11 Comments

The Black Live Matter protests are shining a light on racism, and police brutality. Which both feel quite a long way from the topic of this blog. But as I reflect on them I realise that I have never really discussed any ‘purpose/values’ driven investing. So here goes.

I notice my age increasingly frequently these days, especially at work – where I am almost the oldest person in a young, dynamic, London workforce.

The non-silicon side of Old St Roundabout

Where I am aligned with my workforce is that we are all, by the main, modern, liberal, decent Londoners. I don’t believe anybody I work with is a racist, or a sexist, or somebody who would wilfully harm the environment.

Nonetheless, my younger colleagues definitely differ from me in how they put values front and centre; they crave a ‘purpose’, and they embrace their purpose/values in much more of what they do. So, for instance, to the extent they manage their investments they would be much more likely, I think, than my peers to look for ‘socially responsible’ investing – or Environmental/Social/Governance (ESG) investing.

Why ‘socially responsible investing’ never appealed to me

When I started my investment journey, over twenty years ago, any ‘environmental’/similar investing was, to put it charitably, a niche sport. The range of investments was very limited, and it was assumed that the returns would be mediocre. Fees were high. I was not attracted to it.

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