Posted April 8th, 2013
Have you taken the test? If not you can have a look here:
The Great British Class Calculator – BBC News
You can read the story behind the results of the survey here:
The Great British Class Survey – BBC News
So how did you fare? Apparently there are now 7 different social classes. It does stir my curiosity when looking at how these things come to be defined. As far as I knew we had 3 classes within which everybody could be lumped and depending where you are, you could stick or twist. Then of course on top of that we have the lovely bunch we refer to as the aristocracy; or if you like, those for whom class is a way to distinguish those that are not born in to privilege.
However, we now have 7 social classes according to the survey, within which we all fit nice and neatly. Those classes are:
- Precariat, or precarious proletariat
- Emergent service workers
- Traditional working class
- New affluent workers
- Technical working class
- Established middle class
And I submit that this is all one helluva hideous over generalisation. Why? Well, because it boils down to one thing and one thing only………..dosh!
If you have lots and pots of money yet stay at home playing computer games, listening to rock music and hip-hop you will still come out as Elite. However, if you are of low-income but very enlightened in your pursuits you will still be termed as Precariat. Therefore the whole exercise is complete hog-wash as far as I’m concerned.
You cannot slice the country up in this way and expect it not to engender all sorts of horrific stereotypes. Yes there are some that will always fit the bill. The self-made millionaire that studied at Cambridge on a scholarship and came out with a first class honours degree, set up his own bio-chemical research company, loves reading, the theatre, classical (and rock!) music and has a high IQ would probably be fairly considered Elite. Yet it tells us nothing of the sort of person he truly is. Did he cheat at all on his exams? Did he muscle his way in to his friend’s ambitions and does nothing but sit on a board that he bullied his way on to?
What of the dishevelled young man you see at the bus-stop every morning, in one of only two sets of clothes you’ve seen him wearing; constantly plugged in to his iPhone listening to music, looks like he could do with a good wash (and a good meal!). Probably a scrounger just counting the minutes till he can get back to his bedsit to watch daytime TV and smoke roll-ups all day right? Or a voluntary worker with elderly people who has a part time minimum wage job as a morning cleaner and is quite content thank you very much. Also very well read and studied hard in school. Has A-levels but couldn’t afford to get a degree as he was already up to his eye-balls in debt by the time he was 19 due to soaring further education fees.
It’s easy to make judgements of others (and yourself) when surveys like this pop up; but do you really need to belong to a class system?
I’d suggest firmly that you don’t. All you need to do is be your own class act. That is class enough in itself.
And in case I sound bitter, just so you know I came out as Elite. Obviously that doesn’t take in to account that I’m a Tottenham fan.
Image Credit: Flickr.com/yewenyi
Whitewell Financial PLanning Ltd is not responsible for the content of external websites.
Posted December 5th, 2012
Just a quick update concerning all things moustache related here at Whitewell
Well it was quite a month. We laughed, we cried, then we said goodbye…..to our MO’s. In all seriousness though it was quite a few weeks. What starts out as a bit of fun get’s a bit….well it’s a challenge. Put it that way!
It started as an innocent conversation in the pub between my paraplanner and I whilst we were celebrating Whitewells 4th birthday. It seemed like a good idea at the time, and in hindsight, having raised around £400 for charity it has to remain so. I cannot say that we’ll be doing it again though. Neither Phil B or myself really suit moustaches and I was getting a bit fed up of listening to Phil B complain constantly about getting food stuck in his as the month drew to a close!
Anyway, here’s out last mugshots of MOvember. Thank you so much to everybody that sponsored us!!!
And not only but also!
Here are some lovely cupcakes baked by my PA Linda in honour of our perseverance:
Posted September 14th, 2012
What is it and is it working?
To answer the second question briefly, no, it isn’t working. It does give you a reason as to why annuity rates are so pitifully low at the moment though.
So, what is Quantitative Easing?
It’s basically monopoly money. No, really. Anyone that has played the snatch n grab property bored (pun intended) game has inevitably at some point said (or at least heard someone say) “wouldn’t it be great if all this fake money was real!!??” Great indeed. But, if you think about it, those little funny coloured bits of paper have only marginally less intrinsic value than the paper or “fiat” money that (for many of us all too briefly) occupies our wallets.
Without really getting in to a history of how paper money came to be, it used to be many eons ago that those bills actually meant something.
I have ten cows in a field. You have some land that I would like to purchase. You tell me that the cost of that land is, coincidentally, ten cows. Now, my bovine acquaintances are quite happy in their little field and neither you nor I wish to move them. So, I give you a bit of paper, signed by me and a witness(presumably) that says you now own the cows in such and such a field. You own them, yet they never actually go anywhere. You then have ten cows with which to trade. In fact, theoretically, those cows could change hands ad infinitum without actually going anywhere. And there you have a ridiculously naïve and simple illustration to back up how and why paper money was born. The point is, the value on a bill meant something of true value be it, cows, gold, silver, cotton………..whatever. So, what does a £10 note actually give you today? In short, nothing. There is no asset to back it up anymore. It used to mean that there was gold held in the BOE vaults that you would be entitled to ask for in exchange for your bank note. The link between gold and bank notes was broken in 1931 so the only thing that props up the value of your bank notes is trust. It’s worth £10 because you believe it is and so do the receiver and the issuer. It’s as straight forward and stupid as that.
So, you may think “what’s to stop them making more money during a recession? Especially since it isn’t backed up by any tangible asset.” In steps Quantitative Easing. This is precisely what the government is doing. Just printing extra money in an attempt to support the current price index, amongst other things. Then you say “well I wasn’t serious….surely just making money out of thin air can have a drastic effect on an economy. Particularly one that’s in recession!”
The idea behind quantitative easing is to “flood the economy” with money in an attempt to jump start it. The government uses this money to buy financial assets, and in turn, the banks are then supposed to lend that purchase money to the consumer. The cons are that interest rates are set low in order to encourage consumers to borrow. This means that savers lose out because of low interest rates. Also, gilt yields are reduced which in turn affects pensions and annuity rates. However, once the economy jolts back in to life then things are supposed to eventually equalise and things like gilt yields should return to normal. The alternative is to let prices drop but this in turn can lead to a lower output from manufacturers which then leads to rationing and so on.
There are pros and cons and no quick fixes. Granted. However, the principle behind quantitative easing is that the extra dosh finds its way in to the consumers bank account. A loan it may be, but with interest rates so low it’s a loan that can be met generally speaking. This isn’t what is happening. Perhaps it wouldn’t be right to eschew opinion on where the money is actually ending up on its short, virtual jaunt, but it isn’t finding its way on to the high street.
I wonder, what would happen if prices were allowed to drop? Yes this can have its own ramifications, but it needn’t be a long term solution. It may just encourage consumers back on to the high street as the money is his pocket may feel weightier. Prices wouldn’t have to drop to ridiculous levels either.
Well anyway, no point debating that as it’s unlikely to happen. Not anytime soon anyway. But that is one of the problems with quantitative easing in that it devalues the “real” money that you and I have. It didn’t work in Japan, and it’s not really cutting it in Europe.
When Japan found its boom bubble bursting (a move that was deliberately orchestrated) and recession hit very hard, the eyes of the financial and economic world focused on how this unorthodox exercise would pan out. The Japanese Bank did the exact same thing that is being tried in the UK – dropping the base rate and attempting to stimulate the economy with cash.
Wouldn’t it be an idea to simply cut spending everywhere from government level to the household, let prices drop slightly and let things settle down? Again, it may seem naïve but these things do ebb and flow. Trying to stimulate the economy when it seems at the moment it just doesn’t want to be woken up could cause headaches further down the line. Yes it’s painful and yes people may lose out for the time being. Such is the nature of finance.
The old adage of “drastic times call for drastic measures” is a little well-worn and not a prudent course of action. Drastic times call for prudence and common sense.
Monopoly Cat – flickr.com/anamalous4
Cow – flickr.com/JelleS
Posted August 28th, 2012
Just a reminder, if you weren’t aware already, If you were one that would reach the ceiling of £50,000 a year contributions in your
personal pension, you may have found, or been advised to look at MIPs. A MIP is a Maximum Investment Plan. They were often used by those that hit the afore mentioned cap of £50,000 as a way of investing further without hitting any tax free cap.
You could invest as much as you liked in a MIP and you would never pay tax on any returns assuming the policy
remains qualifying. However, a change included in the budget means that there is now a limit of £3,600 that can be invested in one of these schemes as tax free. Anything beyond that and you will have to pay tax on the returns.
The changes are explained in much more depth here:
So you could take a policy out for £10,000 pa but there would only be tax relief on the first £3,600.
You may find you are unaffected by the changes. However, if you have a MIP and would like to know more, or even consider other ways to invest beyond your pension the why not get in touch?
Whitewell Financial Planning Ltd and The Whitechurch Network Ltd are not responsible for the content of external websites.
Image Credit: flickr.com/***~^ ^~***
Posted August 23rd, 2012
A Bank lending scheme! Whatever next? A butchers selling fresh meat? Or a greengrocers selling fresh veg? A brand new bank lending scheme is very progressive and cutting edge. It’s not as if banks were ever set up in the first place to make loans at interest or connect capital deficit customers with capital surpl………Hang on a mo. Why all the hoo ha?!? How is it that we’re now at a stage where a bank lending money to businesses and customers seems so far-fetched? To the extent that we need “new” schemes to get the initiative going!
For the second time this year we have seen schemes introduced that were intended to see cash find its way, via the banking system, to households and non-financial firms. And it seems that by and large, that didn’t happen. Claims of banks hoarding money and that nearly half of the small firms that asked for bank credit were refused is hardly going to breed confidence in these sorts of schemes.
Why not just give the money directly to the households and businesses in question and let them invest it themselves? Sounds crazy I know, but let’s not get in to a discussion about where money actually goes when it finds itself entering the banking system. Here’s a picture of a cat:
There may be another way:
A friend of mine has been (bleating on endlessly) talking about this for the past couple of weeks. I’ve yet to watch it but it’s definitely on my to do list. Without giving the game away, the upshot is that poor old Dave Fishwick, despite having a brilliant idea of what a bank should actually be i.e. one that lends to customers and business and offers a decent rate of interest on savings – actually finds himself being turned down upon trying to procure the necessary licences. I won’t say why he gets turned down. But when I was told why he was turned down it wasn’t for the reasons you might think. And then you realise that in actual fact it makes total sense when you think about the sort of people that make those decisions.
It’s not as if they’d let any old Tom, Dick or Harry look after your money.
cat – flickr.com/danperry.com
banker – flickr.com/WorldEconomicForum
Posted August 16th, 2012
Any profession carries with it a lexicon of terms that to the expert are as much second nature as the skill set itself. To hear skilled musicians talking about tri-tone substitutions or compound time signatures may appear baffling to the lay-person, but to the pros involved is as plain as plain English. However, a musician would never try to sell you a tri-tone substitution and therefore perhaps the need for a “plain English” explanation is somewhat moot.
Just incase you were wondering, the above piece of music is in Common Time (4 crotchet beats to a bar) and is also in the key of B Major (5 sharps). Although it appears to have briefly modulated to E Major in the bar of music we see here. I know. I’m a man of many talents!
In professions where the selling of a product is key then the use plain English must go hand in hand. The technical jargon used in financial circles is ridiculously confusing. I still remember as a child watching economists make forecasts about stock market movements and the national economic out-look. I recall listening to them, but they may as well have been talking Swahili for all it meant to me.
The problem is, even though it was on the news and being made available for public consumption, there was little done to make things clear.
As a professional in any walk of life, it’s easy to forget that at one time you didn’t know what you were talking about either. Using plain English to convey technicalities is not really dumbing down. It is paying the client due respect by accepting that they may not be privy or fluent in a particular language. If somebody whose first language is Greek gave me advice, I may ask them to explain it to me again in English. This isn’t because I am ignorant or lack intelligence. It’s simply because I don’t speak Greek and therefore have no other way of understanding what they are saying.
The same is true in financial circles. The over use of technical terms and phrases will baffle clients. This is no reflection on their intelligence. They just have no frame of reference for the foreign terms you may be using.
Key Investor Information Documents keep things clear and as straight forward as possible. Investors need to know, in a plain, easy to digest language exactly what their choices are and what they are buying in to. Perhaps if we trimmed back some of the jargon we may find that existing and potential investors alike may be more forthcoming.
A KIID will make things a lot clearer when it comes to where and how you want to invest your money. Have a look at the following example. It’s very straight foward and easy to understand.
Image credit: flickr.com/MaxiuB
Posted August 2nd, 2012
Investing in index funds is a hotly debated topic amongst investors. I am biased I suppose, but I do have to wonder why?
Index funds are generally managed by computer systems. You can self-direct, but if you’re not a worldly-wise investor (the term “index fund” may even mean nothing to you), then working with a financial advisor is key to helping you research and develop an all-weather portfolio.
Be careful though. There are advisors, trading in index funds, who will want to sell you a particular product as they are paid handsomely to do so. This being the case, these particular commissioned – JP Morgan funds for example – have a higher brokerage fee which therefore often means a higher implementation fee and higher annual commission.
An Independent Financial Advisor is, or at least should be, just that. Brokers selling his or her companies own commissioned funds will have a vested interest in selling you a particular company’s fund. Kind of like a Ford dealership selling you a Ford car and you pay more for the privilege. However, the independent chap across the road could sell you a Honda, Ford, Toyota…….without having any particular loyalty to any manufacturer. He’d be more likely interested in selling you a car that suits you. The analogy breaks down when we realise that ultimately both car salesmen are looking to sell you the car that suits their company’s bank balance. That is business after all.
But then, the business that is at least as interested in their customers wishes as they are in their own profits do tend to have a habit of sticking around. The fact is, for an IFA, this is absolutely paramount.
One of the underlying principles of making investment strategies work is making sure they are tailored and bespoke to each individual client. My experience tells me that this really does work.
No two clients are ever the same. Let’s say Mr A and Mr B came to me looking for advice on investing similar amounts of money. Once I have talked with the clients about their hopes and plans for the future we see that the strategy that would work for Mr A may not suit Mr B at all. Because an Independent Financial Advisor isn’t getting paid commission by a company to sell products, then I’m not going to sell Mr B something that won’t work for him, simply to help turn a profit. And that profit may be something Mr B never sees anyway because of the exorbitant fees involved.
Beyond that, there is little human interaction in passively managed index funds. Because we can leave computers to track an index, it means there is less managing to do which means lower costs for clients.
image credit: flickr.com/Hugo90