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Should Commodities Still Have a Place in Your Portfolio? · Merryn Talks Money

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  Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Welcome to Merin Talks
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  Speaker 1: Your Money, the personal finance edition of Meren Talks Money.
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  Speaker 2: In these bonus.
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  Speaker 1: Podcasts, we talk about the best strategies for making the
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  Speaker 1: most of your money. I'm Maren sums Up Web Bloomberg
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  Speaker 1: UK Wealth Editor at Large and with me senior reporter
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  Speaker 1: and author of the Money Dishilled newsletter.
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  Speaker 2: John Steppeck back from holiday for a change.
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  Speaker 3: Hi John, Yes, and a bike, bike for once, bike
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  Speaker 3: for this week only.
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  Speaker 1: This man never stops going on many breaks away next
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  Speaker 1: week too.
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  Speaker 3: Well, I tell me, I havn't to say, did you okay?
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  Speaker 2: Fair enough? Fair enough?
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  Speaker 1: Right?
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  Speaker 2: Listen while you've been away.
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  Speaker 1: The questions from listeners, they just keep coming in. We've
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  Speaker 1: got a little bit of a backlog of questions and
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  Speaker 1: comments from our listeners that I think we really do
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  Speaker 1: want to get through because they're kind of interesting.
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  Speaker 3: I think, Yeah. I mean, the readers are a thoughtful bunch,
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  Speaker 3: and I would expect nothing less from people with such
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  Speaker 3: excellent taste.
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  Speaker 1: I know, and what I particularly like about them is
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  Speaker 1: that mostly they agree with us, and that's a big positive. Remember,
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  Speaker 1: if you email us, we're likely to answer your question.
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  Speaker 1: If somehow they're hints in it that you're already.
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  Speaker 2: On our side with most stuff, we're good with that, right.
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  Speaker 1: The first one is exactly in that vein. It's from Jonathan.
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  Speaker 1: He enjoys listening to our show. That's great, Jonathan, keep
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  Speaker 1: telling us that, and he wonders if we think it's
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  Speaker 1: a good idea to be overweighting commodity stocks At the moment,
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  Speaker 1: I am torn between the idea that tariffs will cause
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  Speaker 1: prices to increase globally as countries work to reshource supply chains,
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  Speaker 1: or that the possibility of an imminent stock market crashed
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  Speaker 1: you the twenty first century equivalent of smooth Horley.
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  Speaker 2: Will cause all stocks to collapse.
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  Speaker 1: While Jonathan, you may be overthinking which one is more likely,
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  Speaker 1: or is it better just to buy gold and wait
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  Speaker 1: for it or to blow over? Now, the first thing
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  Speaker 1: to say is that John and I we do not
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  Speaker 1: give advice. This is not an advice podcast. I'm the
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  Speaker 1: hard best find any advice podcast siseely, so we cannot
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  Speaker 1: tell you exactly what you should or shouldn't do. Obviously,
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  Speaker 1: we're keen on gold. We like everyone to have a
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  Speaker 1: little gold on their portfolio. You know, this is the
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  Speaker 1: apocalypse hedge, and given that you never know when the
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  Speaker 1: apocalypse might come, you might as well have some Otherwise,
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  Speaker 1: I think I would say, please go back and listen
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  Speaker 1: to our podcast with Ed Conway, which while it's not
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  Speaker 1: necessarily about investment in commodities, it's a really good overview
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  Speaker 1: of what makes this market tick. And then I would
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  Speaker 1: say that we are going to be doing in the
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  Speaker 1: very near future a full podcast on commodity investing itself.
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  Speaker 2: So that is there do both of those things.
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  Speaker 1: The other thing to say that is that in general,
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  Speaker 1: it is true that commodities have a great record as
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  Speaker 1: a diversifier and as a protector against inflation. So if
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  Speaker 1: you look back at that period before say two thousand
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  Speaker 1: and seven, commodities had a pretty good positive annualized for return.
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  Speaker 1: Post that, when we moved into our low inflation era,
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  Speaker 1: you will see that commodities had a pretty lousy annual
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  Speaker 1: return negative actually from two thousand and seven that decade on.
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  Speaker 1: So it used to be that everybody had commodities in
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  Speaker 1: their portfolio.
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  Speaker 2: Was expected.
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  Speaker 1: Along with longer the equities, bonds, commodities, you have them
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  Speaker 1: in there as your diversify your inflation protector. That idea
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  Speaker 1: has fallen fallen away over the last ten fifteen years
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  Speaker 1: or so, largely thanks to the appalling return that you
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  Speaker 1: have got from commodities. We are now moving into a
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  Speaker 1: new era. So it is exactly the right question to ask,
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  Speaker 1: should you now have commodities in your portfolio?
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  Speaker 2: John? What do you think?
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  Speaker 1: Yeah?
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  Speaker 3: I think. I think The other point to make is
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  Speaker 3: that obviously there are deferences between commodity stocks and commodities themselves.
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  Speaker 3: I mean, as you can see from the gold mains
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  Speaker 3: and gold for example. And also I would be really,
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  Speaker 3: ever so slightly really threatened too much about the micro
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  Speaker 3: pictures when it comes to your or in portfolio space
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  Speaker 3: efically so so the question of you know, whats going
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  Speaker 3: to lease inflation or are they going to cause an
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  Speaker 3: actual stock market crash? I mean, they may not actually
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  Speaker 3: do either of those things. And even if they do
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  Speaker 3: do one or other of those things, you don't necessarily
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  Speaker 3: know how you should be positioned for betting on it.
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  Speaker 3: But I think then the longer run, like think these
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  Speaker 3: things through. And also if you're going to look at
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  Speaker 3: like mining stocks or energy stocks, then considered their valuation
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  Speaker 3: relative to their history rather than is there going to
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  Speaker 3: be inflation or is there going to be a massive
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  Speaker 3: disinflationary crash. I think that's that's what I'm getting, that
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  Speaker 3: look focused on the stocks and the business rather than
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  Speaker 3: you know what's going to happen in the future.
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  Speaker 1: And the other thing I think it's really important today
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  Speaker 1: about commodity prices enhanced by extension, maybe about mine, is
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  Speaker 1: that just because commodity prices are rising and doesn't necessarily
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  Speaker 1: mean that they will keep rising or stay high.
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  Speaker 2: One of the things we always saying commodities is it
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  Speaker 2: this solution to.
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  Speaker 1: High prices is high prices, because high high prices incentivize
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  Speaker 1: increased supply, and you get increased supply, and then of
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  Speaker 1: course your prices come down to very very cyclical business to.
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  Speaker 2: Be there is an argument, is an argument.
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  Speaker 1: I've made it myself that high prices may not be
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  Speaker 1: the solution to high prices in quite the same way
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  Speaker 1: in the current environment because of the environmental movement and
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  Speaker 1: very very hard to open a new mind.
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  Speaker 2: Now used to be relatively easy.
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  Speaker 1: You want to dig a hole on the ground, you
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  Speaker 1: dig at all on the ground, But these days you
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  Speaker 1: want to diget on the whole the grounds you've got
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  Speaker 1: to ask an awful lot of people for permission first,
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  Speaker 1: So the amount of time it takes to get permission
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  Speaker 1: to open a new mind is moved from you know,
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  Speaker 1: maybe a few months a year or two into many, many,
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  Speaker 1: many years. So it's quite so easy to say high
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  Speaker 1: prices will incentifize supply and bring down high prices as
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  Speaker 1: it used to be. And also, of course, on the
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  Speaker 1: other side, you have rising demand for all sorts of
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  Speaker 1: metals and commodity products in a way that you didn't
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  Speaker 1: previously because of the energy transition.
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  Speaker 2: So basically my point is there is so much.
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  Speaker 1: Going on in this secture that we're having a dedicated
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  Speaker 1: podcast to it for it, and you will get that
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  Speaker 1: podcast relatively soon, so hang on for that. But as
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  Speaker 1: I say, well, maybe our answers aren't ideal. Great question
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  Speaker 1: and the right question to be answering right now, right
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  Speaker 1: The next one is really easy, actually, and it's one
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  Speaker 1: that is asked quite a lot at the moment.
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  Speaker 2: I'm marry just a thought at the start of the.
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  Speaker 1: Industrial Revolution, I wonder if people would have questioned the
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  Speaker 1: wisdom of investing in steam powered machines, very expensive, dangers,
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  Speaker 1: unreliable at the time, assuming the world will have to
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  Speaker 1: change away from fossil fuels, and assuming again that the
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  Speaker 1: solution will be electricity from renewables coupled with hydro the
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  Speaker 1: storage and nuclear for base load. Is there a parallel
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  Speaker 1: here with the start of the Industrial Revolution? Will early
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  Speaker 1: adopters be in stronger positions later on? Now we really
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  Speaker 1: interestedly hear John's answer to this in a minute that
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  Speaker 1: the answer is no, No, I don't think so. This
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  Speaker 1: is completely different to the Industrial Revolution. The Industrial Revolution
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  Speaker 1: was more of a moving forward thing. It wasn't government mandate,
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  Speaker 1: it was market driven, no subsidies here and no forcing
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  Speaker 1: of anyone into anything, simply a natural progression of technology. Now,
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  Speaker 1: what we're doing here is completely the opposite. As we've
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  Speaker 1: said several times on this podcast, this is an example
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  Speaker 1: of something that we have never done before in history,
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  Speaker 1: moving from a very dense and efficient form of energy
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  Speaker 1: to a much less dense and less efficient form of energy.
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  Speaker 1: So there is no certainty that anything that we're doing
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  Speaker 1: right now is putting us on the right course with
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  Speaker 1: renewables and with the mix that we're using, etc. So
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  Speaker 1: my own guess for what it's worth is that the
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  Speaker 1: late adopters are more likely to be the winners than
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  Speaker 1: the early adopters. Let someone else spend the money to
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  Speaker 1: figure all this out, which is one of the reasons,
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  Speaker 1: by the way, that I think zero or our short
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  Speaker 1: time erme on net zero might be something of a disaster.
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  Speaker 2: I suspect that's not the answer you expected. John. If
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  Speaker 2: you've got a different one, possibly a more popular one, can.
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  Speaker 3: Of going by the way technology wise, that may be
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  Speaker 3: fain might think that that's what we have to do
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  Speaker 3: in order to save the planet, et cetera, et cetera.
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  Speaker 3: That's not the point. And the other thing is that
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  Speaker 3: renewables aren't like kind of oil or whatever, and that
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  Speaker 3: you're not saying the big chunk of windows same as
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  Speaker 3: you're sitting in the big chunket oil that you can
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  Speaker 3: then flog to someone else. There's no kind of scarcity
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  Speaker 3: value there all of that sort of stuff. We also
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  Speaker 3: keep talking about this the sense that we will have
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  Speaker 3: enough energy to replace where we are at current levels.
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  Speaker 3: But what we really need is energy abundance. And so
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  Speaker 3: even if you could get to the point where we
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  Speaker 3: can generate all of the electricity that we need currently
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  Speaker 3: from renewables without the grid breaking down, et cetera, et cetera,
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  Speaker 3: et cetera. What you want to get to is a
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  Speaker 3: point where we actually don't need to worry at all
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  Speaker 3: about how we're generating electricity or the cost of it,
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  Speaker 3: because there's so much of it that we're going to
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  Speaker 3: have enough to do whatever we want to do, and
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  Speaker 3: we're probably not going to get there with renewables, right.
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  Speaker 3: The one I would say is, say you living somewhere
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  Speaker 3: like the kind of village in a very deprived part
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  Speaker 3: of the world, like in the Middle Lake kind of Africa, somewhere,
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  Speaker 3: and you start creating grids from scratch as opposed to
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  Speaker 3: trying to adapt existing ones, and your standard eleven is
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  Speaker 3: currently very low. Anyway, I can see how that could
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  Speaker 3: possibly be a more interesting area where the technology is
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  Speaker 3: being adapted, where you can leap frog in a certain thing,
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  Speaker 3: because perhaps if you started with decentralized grids, then solar
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  Speaker 3: in a very sunny country, then solar for example, would
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  Speaker 3: be a much more feasible solution. So that's where I
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  Speaker 3: would find it more interesting to look on the basis
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  Speaker 3: of this question. But long story short, the answers.
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  Speaker 2: No, yep, okay, good, Well we agree on no, then
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  Speaker 2: I recommend them.
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  Speaker 1: I'd recommend going back and again listening to the podcast
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  Speaker 1: we did recently on nuclear because I think Jake, one
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  Speaker 1: of our guests from a Blue Energy, was incredibly compelling
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  Speaker 1: on this. He was very clear when he said, look,
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  Speaker 1: we've got to stop this hairshirt nonsense. What we really
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  Speaker 1: want to hear the go must be more energy, and
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  Speaker 1: we should be using more energy because that's where prosperity
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  Speaker 1: comes from. And we have to find a way to
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  Speaker 1: have more access to energy all the time, constant abundance,
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  Speaker 1: not to constantly be talking about how we need to
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  Speaker 1: restrict our.
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  Speaker 2: Use of energy.
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  Speaker 1: And that's what I mean when I say, you know,
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  Speaker 1: we can what John just said, I'm repeating you, John,
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  Speaker 1: but you're so clever I can I can repeat it right.
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  Speaker 1: So when I say that, maybe we are going down
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  Speaker 1: the wrong path with the mix that we're trying to
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  Speaker 1: find at the moment, it's a mix, and when we
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  Speaker 1: talk about it, we're talking about reducing our energy use,
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  Speaker 1: constraining our energy used. And in an ideal world, when
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  Speaker 1: we wanted to better living standards, be richer, be more innovative,
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  Speaker 1: more active, we would.
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  Speaker 2: Be looking for somewhere to have more energy.
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  Speaker 1: Thank you Mike for getting in touch onwards wealth taxes.
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  Speaker 1: You asked listeners to contact you about wealth taxes that
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  Speaker 1: we had overlooked, and we thought we got a pretty
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  Speaker 1: good list, but.
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  Speaker 2: There are always more.
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  Speaker 1: And this one is isn't inflation the real wealth tax?
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  Speaker 1: And as I will immediately say that, the answer to
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  Speaker 1: that is yes. And we have talked about this quite
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  Speaker 1: a lot, which is why we talk about capital gains tax.
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  Speaker 1: Of course it's being a wealth tax because in the
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  Speaker 1: end it's only taxing inflation, and inflation.
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  Speaker 2: Itself works like a wealth tax.
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  Speaker 1: So and our questioner here, Jeff, elaborates, if ordinary working
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  Speaker 1: people get ten percent higher wages and RPI raises ten percent,
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  Speaker 1: rises ten percent, then isn't your store of wealth? Even
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  Speaker 1: in uset's very hard to value, like private companies are
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  Speaker 1: worth ten percent less. And by the way, debt divided
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  Speaker 1: by nominal GDP folls ten percent, house prices become ten percent.
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  Speaker 2: More affordable personally.
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  Speaker 1: Goal has been the most obvious way to hedge inflation,
• 11:32
  Speaker 1: and Goal coins is CGT free, so it doesn't The
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  Speaker 1: surge in gold from two thousand dollars to three thousand
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  Speaker 1: dollars indicative inflation ahead.
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  Speaker 2: God, there's lots of questions in here. If inflation heres.
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  Speaker 1: Ten percent of the courses of labor government, how many
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  Speaker 1: labor voters would complain quite a lot, I think surely
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  Speaker 1: poor Rachel's obvious choice is inflation. Now again, we've talked
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  Speaker 1: about this a lot on the podcast over the last
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  Speaker 1: few years, because classic financial oppression is exactly that, to
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  Speaker 1: make sure that inflation is higher than interest rates. So
• 12:03
  Speaker 1: gradually the value of our public debt and private debt
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  Speaker 1: is eroded, but at no obvious cost to the government.
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  Speaker 1: But of course the obvious cost is to individuals whose
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  Speaker 1: wealth and effective income faults. So the answer to that
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  Speaker 1: is yes. I mean, there are a few days to
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  Speaker 1: deal with very very high levels of debt. You can
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  Speaker 1: create a great GDP growth so it becomes a smaller
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  Speaker 1: part of your GDP. Naturally, hands up. Who sees that's
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  Speaker 1: happening over the next four or five years, John has
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  Speaker 1: not put.
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  Speaker 2: A hand up. You can do that. Otherwise, you can
• 12:35
  Speaker 2: find a way to default on it.
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  Speaker 1: Somehow, and you can have a real default where you
• 12:40
  Speaker 1: simply say, Dad, do you know what, just not going
• 12:42
  Speaker 1: to pay anymore. You can default on your promises. And
• 12:44
  Speaker 1: this is what Russell Napier, one of our regular guests,
• 12:46
  Speaker 1: talks about a lot. It is a kind of default.
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  Speaker 1: If you default on your promises to your electorate. I
• 12:52
  Speaker 1: no more pensions, no more winter fuel payment, less welfare
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  Speaker 1: than you were expecting. Oh no new roads, no new reservoirs, etc.
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  Speaker 2: That that is a type of default of that.
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  Speaker 1: And the easiest default is default via inflation. So you
• 13:06
  Speaker 1: simply make the debt that you have to pay people
• 13:08
  Speaker 1: back worthless. So is it the obvious way out for
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  Speaker 1: nearly all Western economies.
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  Speaker 3: Absolutely yeah, I mean, but but I suppose the things
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  Speaker 3: that inflation does have to be higher than interest right slow,
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  Speaker 3: and at the moment that's actually not the case, which
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  Speaker 3: obviously does then beg the questionable. So what is the
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  Speaker 3: next step going to be? Given the I mean, right now,
• 13:29
  Speaker 3: this very weak. We are seeing an element of panic
• 13:35
  Speaker 3: or you know us very slow panic creeping into government
• 13:38
  Speaker 3: bond markets across the world, and so Moodies is downgraded
• 13:42
  Speaker 3: the US Treasury bonds from TRIPAA to one notch beneath that,
• 13:47
  Speaker 3: and I mean, on the one hand, it's not a
• 13:48
  Speaker 3: big deal. On the other hand, it's actually very clear
• 13:51
  Speaker 3: Segal that actually the government debt is no longer anywhere
• 13:55
  Speaker 3: regarded as a safe haven. And then you know, in
• 13:58
  Speaker 3: this solution is potentially that they start printing money again
• 14:04
  Speaker 3: to try and suppress long term bin yields or something
• 14:07
  Speaker 3: along those lanes. But yeah, we all have to see
• 14:10
  Speaker 3: what happens. But I think that inflation is the WEO
• 14:13
  Speaker 3: and that's what they'll go for.
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  Speaker 2: Brilliant question there from Jeff.
• 14:18
  Speaker 3: This is an interesting question, this one, isn't it.
• 14:20
  Speaker 2: It is the next one that's really interesting.
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  Speaker 1: But I'd actually say, John, this is the most depressing
• 14:26
  Speaker 1: question I think I have ever received in our higher
• 14:30
  Speaker 1: history of working together, which now is heading towards two decades,
• 14:34
  Speaker 1: and say that this question is the one that makes
• 14:38
  Speaker 1: me feel more than ever that we have made an
• 14:42
  Speaker 1: absolute mess of our tax system, of our society, of
• 14:48
  Speaker 1: our feelings of ambition. Everything's absolutely miserable. And I don't
• 14:52
  Speaker 1: think I'm overegging this. So here we go. I am
• 14:55
  Speaker 1: thirty five years old and earn around one hundred thousand
• 14:58
  Speaker 1: pounds a year.
• 14:58
  Speaker 2: Well done.
• 14:59
  Speaker 1: I am married with very young daughter, as well done.
• 15:01
  Speaker 1: My wife doesn't work, so after tax, pension and rent,
• 15:04
  Speaker 1: that salary doesn't afford a particularly lavish lifestyle. We have
• 15:07
  Speaker 1: a decent amount of savings term seent physical gold allocation
• 15:10
  Speaker 1: hooray twenty percent, gosh, seventy percent equities, so we are
• 15:13
  Speaker 1: financially secure. Again, well done. This person sounds like they're
• 15:17
  Speaker 1: doing really, really well. You read that first paragraph and
• 15:20
  Speaker 1: you're like, way, hey, go you right, so here we
• 15:22
  Speaker 1: are here we get to the bid that makes me
• 15:24
  Speaker 1: just so sad. I'm out a bit for a cross
• 15:26
  Speaker 1: worlds where I'm having doubts about continuing to work so
• 15:28
  Speaker 1: as long hours. He works at a peebacked company. Yeah,
• 15:31
  Speaker 1: we know about those. Listen to past podcasts on some
• 15:35
  Speaker 1: of our feelings set anyway, on my current career two directory,
• 15:38
  Speaker 1: I would expect I could increase my earnings to maybe
• 15:40
  Speaker 1: one hundred and fifty thousand pounds after a few years.
• 15:43
  Speaker 2: Not bad.
• 15:44
  Speaker 1: But equally, I'm sure I don't have the right talent
• 15:47
  Speaker 1: or abilities to get to the very top and earn
• 15:50
  Speaker 1: the big bucks self knowledge. Also well done. Alternatively, I
• 15:54
  Speaker 1: am confident I could move to a new job, rest
• 15:57
  Speaker 1: on my laurels, never leave past five pm, and likely
• 16:01
  Speaker 1: earn sixty thousand pounds or seventy thousand pounds.
• 16:04
  Speaker 2: Do you know what?
• 16:05
  Speaker 1: There's a job in the public sector just waiting for
• 16:07
  Speaker 1: this man, so onwards. My question is, with all this
• 16:11
  Speaker 1: noise about the dreaded tax cliff at one hundred thousand pounds,
• 16:14
  Speaker 1: and particularly with young kids, does it make more sense
• 16:18
  Speaker 1: financial sense to just give up and host everyone? See
• 16:25
  Speaker 1: why I'm feeling a little low here, because the answer
• 16:29
  Speaker 1: is probably yes, isn't it, John Nice?
• 16:35
  Speaker 3: Yes, isn't it?
• 16:38
  Speaker 1: Isn't it? Are you sure if you live in a
• 16:41
  Speaker 1: world where every time you turn around your taxed, when
• 16:45
  Speaker 1: you're near that cliff edge, and you've written about this before,
• 16:48
  Speaker 1: go back and find John stuff on this where you
• 16:50
  Speaker 1: near that cliff edge where a raise might actually mean
• 16:52
  Speaker 1: your take home pay falls falls.
• 16:56
  Speaker 2: When you're looking around.
• 16:57
  Speaker 1: To you and you're seeing what your tax money is spent on,
• 17:00
  Speaker 1: and you'd like to spend some more time with your children,
• 17:02
  Speaker 1: and you're fed up with working for a pe company
• 17:05
  Speaker 1: that you know took your company over and now ripping
• 17:09
  Speaker 1: out the costs, planning to list it with masses of debt,
• 17:11
  Speaker 1: et cetera. And you're looking around you at lots of
• 17:14
  Speaker 1: people who maybe it don't work that much, people who
• 17:16
  Speaker 1: work from home every day people all this kind of stuff.
• 17:19
  Speaker 2: You're look around, you go, what am I doing? I'm
• 17:21
  Speaker 2: the idiot here.
• 17:22
  Speaker 1: Maybe I'll just stop and coast And so the incentives,
• 17:29
  Speaker 1: the incentives financial incentives suggest that maybe that's not the
• 17:33
  Speaker 1: worst idea, And you and I would.
• 17:35
  Speaker 2: Say, well, where's your ambition? What about your future? Maybe
• 17:38
  Speaker 2: you're wrong.
• 17:38
  Speaker 1: Maybe you will just get to one hundred and fifty,
• 17:40
  Speaker 1: and maybe you'll get to two hundred, maybe you'll be CEO.
• 17:42
  Speaker 2: Maybe this is usually.
• 17:43
  Speaker 1: Satisfying, and maybe it's true that just this bit of
• 17:46
  Speaker 1: the beginning here with young kids and hard work on
• 17:48
  Speaker 1: long hours, et cetera, this is a tough bit of life,
• 17:51
  Speaker 1: you know, work on through, push on through, and it'll
• 17:52
  Speaker 1: be great on the other side. I mean, maybe we
• 17:55
  Speaker 1: could say that, but are we right?
• 17:58
  Speaker 3: Well, I ta your point. The tea has. I understand
• 18:00
  Speaker 3: how he feels. I've sort of been in a fairly
• 18:03
  Speaker 3: similar position. But well, first things first, So the tax
• 18:07
  Speaker 3: cliff one hundred thousand pounds, It really is important to
• 18:10
  Speaker 3: understand a few things about that. You only lose money
• 18:14
  Speaker 3: if you lose your free childcare. Now, this chap has
• 18:18
  Speaker 3: pointed out his wife doesn't work, so presumably she's looking
• 18:20
  Speaker 3: after the kids, so they're not presumably paying for childcare.
• 18:24
  Speaker 3: If from assumption there is wrong, then yeah, the one hundred
• 18:26
  Speaker 3: thousand cliff really matters. But as it stands, once he
• 18:30
  Speaker 3: earns over one hundred thousand pounds, he's going to be
• 18:31
  Speaker 3: paying away between Yeah, I mean, he's only going to
• 18:34
  Speaker 3: be earning between thirty and forty pounds for every pound
• 18:37
  Speaker 3: he takes home up until he gets one hundred and
• 18:40
  Speaker 3: twenty five thousand pounds. But the thing to do with
• 18:43
  Speaker 3: that then is presumably the company he works for all
• 18:45
  Speaker 3: of her salary sacrifice, so she ram the rest of that,
• 18:48
  Speaker 3: and he's pension to stay below the one hundred thousand
• 18:50
  Speaker 3: pounds mark. Saying is I'm assuming he can afford that
• 18:53
  Speaker 3: if he's planning the coast for proper sort of discussion this,
• 18:58
  Speaker 3: I need to know what is kind of plan b boys,
• 19:01
  Speaker 3: It's like, so why do you want to coast? You know,
• 19:03
  Speaker 3: why do you want to you know? Is it spend
• 19:05
  Speaker 3: more time with your young kids? But then yeah, I
• 19:07
  Speaker 3: can completely understand that, but also, your daughter is only
• 19:10
  Speaker 3: going to be young for the next five to ten years.
• 19:13
  Speaker 3: You know, how long are you going to be a
• 19:16
  Speaker 3: home for and then you're kind of, you know, whatever
• 19:18
  Speaker 3: you turn fifty, you're sort of sitting there going, I say,
• 19:21
  Speaker 3: I'm fed up in my you know, whatever this job is,
• 19:26
  Speaker 3: it's going to pay him sixty or seventy key. I
• 19:28
  Speaker 3: mean I'm curious as to what that is. I mean,
• 19:30
  Speaker 3: there's a part of your things. Maybe you should be
• 19:32
  Speaker 3: going and finding getting a sense of what is something
• 19:35
  Speaker 3: that's going to pressure buttons if you feel Internactually we are.
• 19:40
  Speaker 2: We getting back into the world to find your passion.
• 19:42
  Speaker 3: Don't find your passion, be quy. I mean, you quite
• 19:44
  Speaker 3: find something to do with your life for the rest
• 19:47
  Speaker 3: of it. I mean you can. You can't semi retire
• 19:51
  Speaker 3: thirty five.
• 19:53
  Speaker 1: Semi retiring is talking about doing a nine to five
• 19:55
  Speaker 1: job like most of the population or a large percentage of.
• 19:59
  Speaker 3: How many jobs are actually ninety five, especially once the
• 20:01
  Speaker 3: pee sixty or seventy those actually exist, they don't exist.
• 20:07
  Speaker 2: I don't know.
• 20:07
  Speaker 1: I mean, I tweeted the other day that I had
• 20:09
  Speaker 1: telephoned that the LA fourteen times in one morning in
• 20:12
  Speaker 1: a desperate attempt to get it answered, and every single
• 20:15
  Speaker 1: time I got response, saying that they had their unprecedented
• 20:18
  Speaker 1: level of blah blah blah blah blah. I rather suspect
• 20:21
  Speaker 1: that an awful lot of people sit in mind their
• 20:23
  Speaker 1: firms who work under nine to five a day.
• 20:26
  Speaker 3: But you know, I agree, But I don't think any
• 20:27
  Speaker 3: of them are getting paid sixty or seventy key they're doing.
• 20:31
  Speaker 3: That's the slate issue. I think a lot of people
• 20:33
  Speaker 3: because also a lot of people were listening to this
• 20:35
  Speaker 3: one hundred K. That's a lot of money, you know,
• 20:37
  Speaker 3: and I thought, he's right, it is not a lot
• 20:39
  Speaker 3: of money split between I mean, and also, look, he's
• 20:41
  Speaker 3: still rent I mean that is another issue here. I mean,
• 20:44
  Speaker 3: I'm assuming that at some point that he wants to
• 20:47
  Speaker 3: buy property. Maybe he doesn't, Maybe he's comfortable renting for
• 20:51
  Speaker 3: the rest of his life. But that's another reason why.
• 20:55
  Speaker 1: He's confident he can get one of these jobs at
• 20:59
  Speaker 1: sixty or seveny K. So tak him at his word.
• 21:02
  Speaker 1: Taking him at his word, so you know, after taxes, inc.
• 21:05
  Speaker 1: I wasn't going to fall massively in there. Maybe he'll
• 21:07
  Speaker 1: maybe his wife will go work part time and then
• 21:09
  Speaker 1: they'll get the childcare. Yeah, I think we might be
• 21:12
  Speaker 1: again we're over thinking we should know enough about their circumstances.
• 21:16
  Speaker 1: But I just find it very depressing that the thought
• 21:19
  Speaker 1: is even in people's heads that the system feels stacked
• 21:23
  Speaker 1: against people the extent that their ambition is stunted.
• 21:27
  Speaker 3: I mean the fact he's asking. The fact he's asking
• 21:30
  Speaker 3: is depressed. And also at the end of the day,
• 21:33
  Speaker 3: if he thinks he's achieved escape velocity at this point,
• 21:36
  Speaker 3: then actually that you know, the point in which your
• 21:38
  Speaker 3: your income and your lifestyle, your incomes out stripping your lifestyle,
• 21:43
  Speaker 3: and you know your lifestyle is not more expensive than
• 21:45
  Speaker 3: absolutely fine. But I just think also in me, maybe
• 21:49
  Speaker 3: he's just feeling down, you know, and get young kids
• 21:56
  Speaker 3: and you want to see them.
• 21:57
  Speaker 2: They didn't come here for life coaching, John.
• 22:00
  Speaker 3: Sometimes that's what you really need. Low matter.
• 22:03
  Speaker 1: Okay, all right, but anyone else who would like life
• 22:06
  Speaker 1: coaching from John, do send your questions now.
• 22:09
  Speaker 3: I was starting to start one sub second a few
• 22:11
  Speaker 3: weeks clearly, why.
• 22:12
  Speaker 1: Not, right, I'm going to leave that one behind because
• 22:14
  Speaker 1: I'm still feeling stressed about it.
• 22:16
  Speaker 2: Veteran, thanks so much for getting in touch. One more
• 22:19
  Speaker 2: for today. This is about it.
• 22:21
  Speaker 1: If someone starts their their question is exactly the right thing.
• 22:24
  Speaker 1: I like your podcast greatly. Thank you very much, Paul.
• 22:27
  Speaker 1: We're very gaen on YouTube and he particularly wish just
• 22:30
  Speaker 1: at the government would listen to our podcast and others
• 22:33
  Speaker 1: like yours. I don't know who who has these other
• 22:35
  Speaker 1: ones like us, so don't listen to those. Just listen
• 22:37
  Speaker 1: to these. I hope theybor listen to your well made
• 22:39
  Speaker 1: anti wealth tax arguments. You asked for other wealth taxes.
• 22:43
  Speaker 1: You missed VAT on school fees, which is a notable one.
• 22:46
  Speaker 1: I mean, that's interesting, actually, isn't it, Because there our numbers.
• 22:48
  Speaker 1: You're saying that far from the trickle of students having
• 22:51
  Speaker 1: to leave the private sector for the state sector, the
• 22:54
  Speaker 1: so far around thirteen thousand, that's an awful lot of
• 22:57
  Speaker 1: new pupils that the taxpayer has to stump up for.
• 23:00
  Speaker 1: VAT is effectively a wealth tax. That's wealthy people buy
• 23:02
  Speaker 1: a lot of expensive things. I was pleased you mentioned
• 23:06
  Speaker 1: the first year of registration tax for expensive and polluting cars.
• 23:10
  Speaker 1: Don't forget there's also the additional five hundred pound a
• 23:12
  Speaker 1: year road tax. I thought we mentioned that, maybe we
• 23:13
  Speaker 1: didn't for the first five subsequent years, which is foolish
• 23:16
  Speaker 1: and singly makes me not buy a new car. Fair
• 23:19
  Speaker 1: enough stand duty on expensive houses is ludicrous.
• 23:23
  Speaker 2: Again.
• 23:24
  Speaker 1: We have talked about that, and I actually I am
• 23:26
  Speaker 1: put in my newsletter last week. I was looking at
• 23:29
  Speaker 1: it and I was thinking about Americans buying houses in Edinburgh,
• 23:31
  Speaker 1: which I'm not sure they are by the way, and
• 23:32
  Speaker 1: there are a lot of expensive houses for sale in
• 23:35
  Speaker 1: Edinburgh at the moment. I looked up some of the
• 23:36
  Speaker 1: most expensive and then I looked up what it would
• 23:40
  Speaker 1: cost in the Scottish equivalent to stamp duty to buy
• 23:43
  Speaker 1: one of these houses if you already own a home elsewhere.
• 23:47
  Speaker 1: And on some of these expensive houses pushing the five
• 23:49
  Speaker 1: million mark, the stamp alone alone is close to a
• 23:54
  Speaker 1: million quid.
• 23:56
  Speaker 3: That's surely unsaleable.
• 23:59
  Speaker 2: So why would you do this?
• 24:00
  Speaker 1: Who is going to hand a million pounds over to
• 24:03
  Speaker 1: the Scottish government in cash on the day of transfer,
• 24:07
  Speaker 1: purely to be able to buy a house in Scotland.
• 24:10
  Speaker 2: Why would you do this?
• 24:11
  Speaker 3: Could get yourself at Golden Visa in America.
• 24:15
  Speaker 2: You could get yourself an awful lot of stuff.
• 24:16
  Speaker 1: John Anyway, the loss of personal allows been one hundred
• 24:22
  Speaker 1: thousand punds and one hundred and twenty thousand pounds is
• 24:23
  Speaker 1: another foolish tax coming in before the forty five percent
• 24:26
  Speaker 1: top tax rate one hundred and fifty thousand pounds disincentivizes
• 24:29
  Speaker 1: people to work more in order to avoid the tax
• 24:32
  Speaker 1: through larger pension contributions.
• 24:34
  Speaker 3: Last call was.
• 24:35
  Speaker 1: Seeing exactly what the last guy was saying. And then
• 24:39
  Speaker 1: there is the removal of the interesting answer those on
• 24:41
  Speaker 1: higher and top race of tax these are all wealth taxes,
• 24:44
  Speaker 1: and he's right, there are and as I say, you know,
• 24:47
  Speaker 1: you can't go out of your front door without being
• 24:48
  Speaker 1: taxed in the UK anymore, and the wealthy are tax
• 24:51
  Speaker 1: at every time.
• 24:51
  Speaker 2: I'm quite interesting. I don't know.
• 24:53
  Speaker 1: We've been watching this whole business of people saying that
• 24:56
  Speaker 1: the wealthy and the high income attax much less than
• 24:58
  Speaker 1: they used to be, et cetera. And you may have
• 25:01
  Speaker 1: seen some of the chants doing the round showing that
• 25:03
  Speaker 1: this is absolutely not true. In fact, the wealthy and
• 25:07
  Speaker 1: the high income are significantly more highly taxed in the
• 25:10
  Speaker 1: UK than I think they might ever have been, and
• 25:13
  Speaker 1: the low income are taxed significantly less than they've been
• 25:17
  Speaker 1: for some time. And the truth is that they used
• 25:19
  Speaker 1: to be. Well, you know, we talk about these very
• 25:21
  Speaker 1: high income tax rates. There were at various points in
• 25:23
  Speaker 1: the seventies and dividend taxes, etcetera. But there were many,
• 25:27
  Speaker 1: many more loopholes than there are now. So now when
• 25:30
  Speaker 1: there are taxes announced, people actually pay it, whereas back
• 25:33
  Speaker 1: in the day taxes were in now so people go,
• 25:35
  Speaker 1: I don't think I will.
• 25:36
  Speaker 3: Yeah. And it was also you know, you know these
• 25:41
  Speaker 3: these have thems digital. But I mean people, I remember
• 25:44
  Speaker 3: someone telling me about when of other exchange controls and
• 25:47
  Speaker 3: this is a mainor thing. This was when you couldn't
• 25:49
  Speaker 3: take money with you on holiday and they were told them.
• 25:52
  Speaker 3: But some kind of cousinot on color there was that
• 25:54
  Speaker 3: had just dashed the lot with in the hob caps
• 25:56
  Speaker 3: of the car.
• 25:57
  Speaker 2: I told you this story. Yes, who is me?
• 26:00
  Speaker 3: Did not know coin on fire or something.
• 26:03
  Speaker 1: They got to France, France, they were powder friend of
• 26:09
  Speaker 1: mine's father. By the time they got to France, they
• 26:11
  Speaker 1: had only powder in their wheel.
• 26:13
  Speaker 3: Yeah, if you're going to ads, you know, kind of
• 26:16
  Speaker 3: like exchange controls and then see this is why you
• 26:18
  Speaker 3: need backcoin.
• 26:21
  Speaker 1: Okay, right, I think that's it. I think that's it.
• 26:28
  Speaker 1: That's a lot of question, more than enough for one day.
• 26:31
  Speaker 1: Then we have more questions. We will answer them another time. Please,
• 26:34
  Speaker 1: do keep sending us in more questions A we really
• 26:38
  Speaker 1: enjoy them, and B we suspect that other listeners enjoy
• 26:40
  Speaker 1: them and find the answers interesting as well. Well. At
• 26:42
  Speaker 1: least find the questions interesting, So do keep sending them
• 26:46
  Speaker 1: in if you have them.
• 26:50
  Speaker 2: Thank you for listening to this week's Merin Talks to
• 26:52
  Speaker 2: Your Money.
• 26:53
  Speaker 1: If you like us, share, rate, review, and subscribe wherever
• 26:56
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• 26:57
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• 26:57
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• 27:00
  Speaker 1: in sw and John Underscore STEPIC. This episode was produced
• 27:03
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• 27:08
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• 27:11
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• 27:14
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