Hello and welcome back to Mortgage Advisor on FIRE. This week I take a look at capitalism, and why I think criticisms of it as an economic model are often misplaced. Also, another week and another Tory shambles. There are the usual financial updates, but first the Quote of the Week:
Quote of the Week
A spokesperson for No 10 said: “To ensure the ongoing investigation retains public confidence the cabinet secretary [Simon Case] has recused himself for the remainder of the process”.
Seriously, this section could easily be renamed to “The Weekly Tory Shambles.” I don’t think even Armando Iannucci, the man behind the political satire The Thick Of It, would be able to come up with such dipshittery as this latest news. For anyone who hasn’t seen the news in a while, the Tory party has come under intense scrutiny for ignoring the lockdown rules they came up with, by hosting office Christmas parties in 2020. Videos have come out showing the absolute contempt in which these sleazeballs hold the general public.
Why does it take an investigation to work out if a party was held in your own home?
The PM has announced an inquiry into these parties. In typical Boris fashion he’ll be hoping to throw a dead cat on the table to distract people from this issue. However, this story is a gift that keeps on giving. The man they chose to lead the investigation, Simon Case, has been accused of having his own Christmas party in breach of the lockdown rules. If it wasn’t so tragic, it would be hilarious.
I thought that this would be the end of my “kick the Tory” section for this week, but I’ve just seen the video of Boris losing his temper with Sky News journalist Sam Coates, accusing him of breaking “the golden rule”, whatever that means. This comes off the back of the Tories losing the by-election in North Shropshire; a seat they have held since the 1800s.
Hopefully the electorate are starting to see through the absolute clusterfuck that is this government and at the next election we will see some real change. Despite this country needing a break from the Tories, I can’t see any credible opposition. The old dynamic of Labour versus Conservative doesn’t seem to mean much when many people refer to Labour as The Red Tory party. Granted, there are some politicians out there that have the best interests of the nation at heart, but it feels like the whole system is rigged against them achieving any real power or influence.
Weekly Update
I don’t know where the time goes each week. The time to write this blog seems to come around faster and I don’t know what I’ve done with the days in between. I think it’s the nature of the pandemic when working from home. It’s very easy for the days to blend together. I’m not looking forward to next week as I’ll be working late from Monday to Thursday. It doesn’t leave a lot of time to get the last few bits of food shopping for the Christmas period. We’re not making a big deal out of it this year, and it’s going to be a very scaled back meal on the day itself.
I’ve had to deal with a few instances of incompetence this week. Regular readers will know of the problems we’ve had with the agent managing our BTL. Well, they struck again. An email came through from yet another person at the agency asking if we wanted to book in our annual gas safety check that’s due in February. A few points to remember; our tenant is moving out this weekend, and on Monday the 20th I’m meeting someone else from the agency at the property to take possession of the keys. I fully expect that appointment to go wrong, but I digress.
I called the agent to discuss the email, as my concern was that they’d forgotten that our business relationship was ending this weekend. The lady who answered, who I’ve not spoken to before (seriously, how many people do they employ?), did not seem to know that we were cutting ties with the agency. Also, she stated that the property doesn’t have gas (it does), and she stated that our property used to be managed by another agency in our area (it wasn’t). To top it all off, the office manager emailed me stating that this colleague thought I was another of their clients who they proceeded to name, which I think is a breach of GDPR. For these people, incompetence would be an improvement.
It turns out the email was an automated email, but rather than having it come from an address that makes it clear it’s automated, it came from a named person’s email.
If they turn up on Monday with all the keys, alarm codes and documents with no issues, it will be the first thing they’ve done right.
A Brief Interlude
I’ll never hide this blog behind a paywall, but it does cost money to run the site. I spend a minimum of six hours each week writing the blog, and maintaining the other parts of davidscothern.com. It is a labour of love. However, many of you have asked how you can show your appreciation. I set up a Buy Me A Coffee page but the main feedback was that you couldn’t pay by card. Well, now you can! My page now supports card payments and Apple Pay. So, if you want to show your support and appreciation for the content I create, please buy me a coffee.
2021 Goals – to be achieved by 31/12/2021
1 – Reduce weight to 92.8kg. (Current weight 123.2kg).
2 – Finish 104 new books. (Current total: 115).
I’m obviously not going to hit my weight goal for the year, but at least it’s been fairly steady for the last few weeks. I still want to lose weight but this is not the right time to make a concerted effort. I’m going to enjoy my Christmas and New Year, and then start fresh in 2022.
I should hit 120 books by the end of the year, which is way above the target I initially set myself. I’m going to do something a little different next year with my reading challenge.
Financial Update
Assets
Premium Bonds: £20,700.00 (up £700.00 from last update).
Stocks and Shares ISA: £42,044.24 (down £185.55 from last update).
Fuck It Fund: £2,650.00 (up £400.00 from last update).
Crypto: £673.48 (down £41.45 from last update).
Pensions: £52,349.23 (down £176.40 from last update).
Residential Property Value: £210,058.00 (no change from last update).
Buy-to-Let Property Value: £135,550.00 (no change from last update).
Total Assets: £464,024.95 (up £696.60 from last update).
Debts
Credit Card: £1,328.72 (up £182.31 from last update).
Residential Mortgage: £166,365.78 (no change from last update).
Buy-to-Let Mortgage: £92,976.55 (no change from last update).
Total Debts: £260,671.05 (up £182.31 from last update).
Total Wealth: £203,353.90 (up £514.29 from last update).
Investment Income in 2021: £3,475.39 (target £5,000).
A mixed bag this week. I received my monthly salary which allowed me to increase my Premium Bonds and Fuck It Fund. The Bank of England base rate increase, combined with the recent figures on inflation, and the impact of the Omicron variant have all played a part in staling the progress of the stock market.
With the exception of some money from an income fund, I doubt I’ll receive any more investment income before the end of the year. Although I didn’t hit the £5,000 target I’m reasonably happy with what I did receive. I think it’s a good foundation to build on for 2022. I’ve decided that I’ll aim for £7,000 income from investments for next year. Assuming I acquire a second BTL early in the year, it should be achievable. These income goals aren’t really goals as such, as the income will come when it comes. It’s just a way of charting my progress.
My credit card increased slightly, and at the risk of sounding like a broken record I’m not worried by this. It was always going to increase around this time of year. It will be paid up in full before too long. I’m still in an interest free period so it’s not exactly a pressing issue.
Capitalism
I see a lot of people attack capitalism without any sort of coherent suggestion of what would replace it. In simple terms, capitalism is an economic system in which the means of production are privately owned and operated for profit. People are able to exchange their time, effort and skill for a wage. The result of this system is that if you have a product, or service, that is highly sought after, you can very quickly accumulate vast wealth. Holding vast wealth is not a problem with capitalism, but rather a problem with taxation.
When you think about the mega rich who seem to personify capitalism I’m confident that you are thinking of Jeff Bezos, Bill Gates, Mark Zuckerberg or Steve Jobs. I don’t have any issue with people accumulating vast wealth if they create a product or service that we love to use. For example, the iPhone, or Amazon, or Facebook/Instagram/Whatsapp. These people created something that people find extremely useful. Why shouldn’t they reap the rewards of what they built?
Well, these businesses don’t exist in a vacuum. Whether we are talking about not paying their fair share of tax, or exploiting workers in developing countries, or having poor working conditions for their workers in developed countries, or mining and selling personal data, many of the world’s biggest companies are on shaky moral and ethical grounds. None of this is central to capitalism though. I’m not saying that it doesn’t happen, as it clearly does. I just don’t agree with attacking people for their wealth when they’ve created something that is extremely useful or entertaining. Criticise them for their working practises, and for not paying their fair share of tax, by all means. Simply attacking them for being rich misses the point.
If we had an economic system that restricted profit, there would be much less innovation. There would be no incentive for it. The setting of taxes is a difficult thing to get right. If you set your taxes too high, then companies will move elsewhere. If you set them too low, you end up not getting much. It’s like deciding whether you want a bigger piece of a small pie, or a smaller piece of a bigger one. With many products and services now being digital, it becomes even harder to establish where tax is due.
We need to encourage people to innovate but we also need to make sure that it’s done in a socially responsible way. Being part of the ultra rich shouldn’t make you immune to paying your fair share, but I can’t take anyone seriously who slams Bezos for having a rocket when they buy all their electronics from Amazon. In a similar way,I can’t take anyone seriously who has a go at Zuckerberg’s wealth on Facebook.
In short, capitalism isn’t the problem. It’s tax law and the national governments that need to do a better job of making everyone pay their share.
Seeing out 2021
With Christmas Day and New Year’s Day falling on a Saturday this year, it means that my publishing schedule may be slightly off for the next couple of weeks. Normally, I write the bulk of the blog on Friday and Saturday, before scheduling publication for the Sunday. I may struggle to get the blog done on time over the festive period, but I’ll do my best.
Biolink
You can now find all my social media pages by checking out my Biolink at bio.link/davidscothern.
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