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We’re based in Ramsbottom, UK

Mark Sekree Posted:
308 days ago (November 22nd 2016)

‘It Ain’t Cheap Being Poor’

ain't cheap being poor

This little nugget was bought to me in a good friend’s Geordie accent that I can still hear now. I had never heard it before but the simple truth of the matter struck me. I think we were talking about a bus fare or something similar but since then I’ve been pondering how it relates to general finances and this truth seems to me to be tragically amplified.

Where to start? Well, obviously loans are vastly more expensive for those without means. While interest rates are at record lows- banks can borrow at 0.25%pa and those buying expensive houses with large deposits can borrow millions at less than 2%pa this means nothing to those hard up. If they can get finance at all they are going to be paying much higher loan or mortgage interest, if they can’t then they could be stuck paying rent higher than even mortgage repayments. At worst of course you get the loathed Pay Day lenders charging hundreds of percent interest to those with no options. Seeing Pay Day employees on a marketing drive in London a couple of years back dressed as cuddly animals handing out balloons and goody bags to kids and ‘First Loan Free!’ fliers to parents turned my stomach.

Insurance? If you’re wealthy you can forget about needing life and long term sickness insurance in case the worst happens. That might save you thousands of pounds over your lifetime that you really need to spend if you don’t have lots of savings and don’t want to leave your family stranded in the event of misfortune.

And perhaps the biggest area, and most relevant to EZ ISA, is that you are excluded from investing. If you are always behind you will pay a vast amount in interest over your lifetime and without some luck or struggle it will be hard to get ahead. Even if you get a bit of money saved up it’s unwise to invest if you might need it in the short term. However, the more comfortable you get the more you have to invest and the more risk it’s reasonable to take. This means instead of getting next to no interest on your money you might take a fair bit of risk and stand the chance of doubling your money every 10 years (by getting 7%pa returns- not unreasonable). It doesn’t take too many 10 year cycles to get wealthy this way but unless you start from a comfortable position it will always be denied to you.

Those with savings and investments (the well off and informed) will always take money from those who borrow and buy (the hard up and the uninformed).

Unfortunately EZ ISA can’t help with most of this, but it does make it cheap and easy to get top quality investments once you’re in a position to do so.

Mark Sekree Posted:
317 days ago (November 13th 2016)

EZ ISA Battles Trump

Stick with me on this one- it’s a bit tenuous…

I reckon Trump’s success can be attributed to the general shift in economic returns from labour (work done by people for money) to capital (physical and intellectual stuff used to make things). Due to globalization and technology labour just can’t command the returns it used to get and America’s (and the world’s) economic and social policy hasn’t adjusted for this. Capital (represented by companies) and their owners (shareholders) have been having it all their way recently.

Baring sickness etc everyone can benefit from their labour and since slavery went out of fashion it’s impossible to own more than your own. This means that if labour was being richly rewarded everyone would get a fairly equal share. Unfortunately a feature of capital is that any individual can accumulate as much as they can afford with no limit- add to this relatively low taxes on capital returns, the exponential multiplying effect from growth and an ability to pass it on down generations and you end up in the current situation- a mega wealthy ‘1%’ who own all the capital and everyone else scratching around for a living in a ‘wealthy’ world and getting rightfully pissed off about it. So pissed off they’re prepared to go to desperate lengths to have a crack at the status quo- Trump.

Why that must entail electing a loathsome billionaire who got rich on inherited and borrowed money I’m really not sure- I guess he’s one of the few ‘anti-establishment’ figures with bucks big enough and skin thick enough to be in with a shot.

Anyway, where does EZ ISA come in? Basically, if you can’t beat ‘em, join ‘em. I think returns to your labour are going to continue to be eroded and capital is still going to be rewarded for the foreseeable future. The good news is that with EZ ISA anyone with savings can benefit from this- you don’t need loads of money or expertise to start with. If everyone had a healthy stake of capital and benefitted from the returns everyone would be better off and you wouldn’t need a Trump. Wouldn’t that be nice?

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