There is nothing magical about pensions versus ISAs, the UK’s two tax-free savings wrappers, that somehow enables pensions to break the laws of mathematics.
Both pensions and ISAs deliver one-shot tax relief, as well as allowing your savings to grow tax-free.
- Pensions give you the relief upfront, by rebating the tax you’d otherwise pay on your contributions.
- ISAs give you the tax break later, since you pay no tax when you cash in your ISA investments.
You’ll often hear people claim that pensions are better than ISAs because upfront relief is more valuable. “You have more money to compound over the years with a pension,” they say, which they claim gives pensions the edge.
But this is wrong – all things being equal.
Now, all things are rarely equal, and I’ll get to that in a minute.
But first the science bit.
Pension versus ISAs: A quick recap
Pensions
- With a pension, you get tax relief on your contributions.
- If you pay 40% tax, say, then a £1,000 contribution costs just £600 of taxed income.
- You pay tax on the money you take out when you retire.
ISAs
- With an ISA, you get no initial tax relief.
- Instead, you put some of your taxed salary into the ISA.
- However, you do not have to pay tax on the money you withdraw later.
Mathematically speaking, there is no difference between these two situations, provided the tax rate is the same.
Proof that ISAs and pensions are the same, maths wise
Here’s some algebra to prove pensions and ISAs are equivalent – all things being equal.
Consider the variables:
- A lump sum investment of £x
- Tax rate of t%
- Annual growth of i%
- Investment period n years
With an ISA you get no initial tax relief, and you pay no tax on withdrawal.
The formula for how your money compounds over ‘n’ years is therefore simply:
- ISA = x * (1+i)^n
With a pension you get tax relief of t%, but you also pay t% tax when you withdraw the money later.
The formula for how your money compounds over ‘n’ years is:
- Pension = x/(1-t) * (1+i)^n * (1-t)
Now, (l-t)/(l-t) cancels out. This leaves us with:
= x * (1+i)^n
Which is exactly the same as the ISA!
This is why some prefer to use the phrase ‘tax deferment’ rather than ‘tax relief’ when talking about pensions. The relief you get upfront is cancelled by the tax you pay later – all things being equal.
A worked example of tax equivalence
Here’s an example of pensions versus ISAs with real numbers.
Consider a higher-rate taxpayer who:
- Sets aside £1,000 of his gross salary to invest every year
- Pays 40% tax
- Gets 10% a year growth on his investment
- Leaves it to compound for five years
- Draws an income of 5% a year in retirement
With the ISA, he is funding his contributions out of his taxed income.
Higher-rate tax is 40%, so our man’s £1,000 contribution is multiplied by (1-0.4=0.6) to reduce it by 40%, then compounded over five years, and then finally, he takes out 5% (so we multiply by 0.05).
- £1,000×0.6×1.1×1.1×1.1×1.1×1.1x.05 = £48.32
With the pension, our chap can put in the £1,000 from his salary tax-free. However, he must pay 40% tax at the back-end.
This time, we get:
- £1,000×1.1×1.1×1.1×1.1×1.1×0.6×0.05=£48.32
The same!
Important caveat: Things are NOT equal
I’ve shown there’s no difference between an ISA and a pension from a pure maths standpoint.
But I said that was with ‘all things being equal’. And things aren’t equal!
Caveat 1: Lower-rate taxpayer in retirement
Most people pay a lower-rate of tax in retirement (0-20%). This can make a pension a better option than an ISA for higher-rate taxpayers who will be lower-rate taxpayers in retirement, because the rate they pay on withdrawing the money (20%) will be lower than the tax relief they got on when they put the money in (40%, or 45% for additional rate payers 1 ).
In my worked example, instead of multiplying by 0.6 to represent the tax on withdrawal, as a lower-rate payer you’d multiply by 0.8, which gives a much higher income of £64.42.
But there’s more! You still have an annual income tax personal allowance as a pensioner. So a good chunk of your pension income may not be taxed at all. (The first £11,000 at the time of writing, presuming no other taxable income streams are complicating matters.)
On the other hand, some of your personal allowance should be used up by (hopefully) a State Pension at some point in your retirement. The State Pension counts as taxable income.
As you can see the marginal tax rate you’ll pay can be very uncertain 15-20 years in advance.
Caveat 2: Tax-free lump sum with a pension
A second important factor is that you can take out a one-off 25% lump sum 2 entirely tax-free with a pension.
On this portion of your money you get tax relief going in, and yet can pay no tax on that 25% coming out later – the best of both worlds!
Again, this gives pensions an edge over ISAs.
Caveat 3: Employers pay into pensions, but not ISAs
Employers contribute to pensions, which can be a substantial advantage, and there are National Insurance savings too.
Pensions are also better protected if you lose your job and need to claim benefits.
Pensions versus ISAs: Same but different
In the old days – that is, three or four years ago – we’d now shift gears to talk about the huge and hidden downsides of pensions.
Gloomy organ music would rise up out of nowhere, an unseen wind would shutter the windows and plunge us into darkness, and we’d somberly recount the onerous restrictions on what you could actually do with your money that you’d saved into your pension when you were old enough to need it.
All that changed though with the 2014 Budget’s pension freedoms.
There are still some rules on what you can do with your pension pot – most particularly when you can get access to it. Currently you need to be 55, but that age climbs if you’re younger and many fear it will keep rising.
You do also need to be aware of the tax implications of different withdrawal strategies.
In contrast, with an ISA you can spend your accumulated money how and when you like. It’s always tax-free.
But still, when it comes to how you invest your pension pot once you’ve retired and how you withdraw it, most of the old strictures are gone.
Most dramatically, you’re no longer compelled to buy an annuity. You can instead invest your pension in other assets to create an income that suits you.
Famously, you can even withdraw the money to buy a Lamborghini if that floats your boat.
Our contributor The Greybeard has been covering this brave new world of pensions and deaccumulation. Please do check his articles out.
The changes mean that most people on a fairly normal retirement path will conclude that a low-cost pension based around tracker funds or an ETF portfolio is the best vehicle for retirement savings.
My co-blogger The Accumulator certainly thinks pensions have the edge.
ISAs are still massively valuable for all-purpose savings. They can also back up your pension contributions, and diversify the risk of future governments fiddling with the rules.
And if you want to retire very early, ISAs will probably have to feature heavily in your strategy, given the age restrictions on accessing pensions. 3
In an ideal world you’d have both a pension and ISAs. But whatever you do make sure you’re using some sort of shelter to stop tax reducing your investment returns.
Note: Older comments below may pre-date the pension freedoms. Check the dates! Also I’ve not gone into Lifetime ISAs, as there are signs that the government is already having second thoughts about the inherent inconsistencies in this halfway house. If they are implemented we’ll come back to them, so please do subscribe for updates.
- But beware of reduced annual allowances if you’re a high-earner.[↩]
- Technically it’s called a Pension Commencement Lump Sum, or PCLS.[↩]
- If you’re trying to retire in just ten years say, then the annual ISA contribution limits are going to be a snag. Make sure you’re fully up-to-speed on capital gains tax strategies and the like.[↩]
Good reads from around the Web.
This week saw the Financial Conduct Authority (FCA) publish the interim findings of its deep dive into the asset management industry and how it treats its customers.
With the report weighing in at 200-pages, I’ve only been able to superficially skim it so far for myself.
But pundits and campaigners seem pleased.
Andy Agathangelou, founding chair of the Transparency Task Force group, says:
“There’s not been a chance for a detailed analysis yet but their opening comments are extremely significant […]
They are even talking about the idea of introducing an all-in fee to make it easy for investors to see what is being taken from the fund. Wow, this would be a seriously progressive approach to costs disclosure and is exactly the kind of costs regime that is needed.
Let’s hope this helps avoid the ‘patchwork quilt of protocols’ that trade bodies seem to prefer over market-wide regulation.”
You can read Mr Agathangelou’s comments in full at The Evidence-Based Investor.
The mainstream press has also begun digging into the report.
Citywire flags up the finding that so-called ‘Best Buy’ and ‘Rated’ funds touted by distribution platforms typically fail to beat the market:
“…although funds on ‘buy’ lists did better than non-recommended funds, in common with the vast majority of funds they did not perform better than stock market indices, such as the FTSE All Share, once charges were taken into account.”
And in a separate article it homes in on talk of that all-in-one fee:
UK fund managers don’t compete with each other on price, which means investors end up overpaying on fund charges, the City watchdog has concluded
Following a damning review [the FCA] found that actively managed funds do not beat the stock market after charges.
It also concluded that the stated investment objectives and fee breakdowns for funds are unclear to investors.
The regulator is proposing asset managers introduce an all-in fee to improve the disclosure of costs that investors incur.
ThisIsMoney has published the most comprehensive recap of the report’s findings. Handy for those of us who won’t get paid to wade through the 200 pages!
Shrink in the wash
Here at Monevator Towers, we can only welcome the FCA looking into the egregious profits earned in aggregate by the financial services sector.
Remember, active management is in practical terms worse than a zero-sum game. The only group that benefits from its dominance are the managers themselves.
That’s not to say there is no role for financial professionals in the money matters of the person in the street. Some active investing will always be necessary to keep the market efficient (though most private investors can dispense with it) and financial planning has a place.
A right-sized industry would undoubtedly be far smaller than today’s, though. Which means we can probably expect it to fight the FCA on any radical changes.
Revolutionary Summit
Indeed, that’s the wet blanket I’d throw on this report. (I always have a supply of wet blankets to hand…)
You may remember how RDR was supposed to revolutionize retail investing. It definitely made positive changes (getting rid of trail commission, for instance) but one can argue that many of the insidious costs of investing just migrated elsewhere.
Post-RDR, savvy Monevator readers who’d read up on index investing have perhaps found it harder to keep their costs at rock-bottom lows. I suspect the ill-informed masses were previously subsidizing cost-conscious passive investors to a greater extent.
A selfish quibble? Maybe, but the bigger point is that the sharks will always keep swimming when there’s this much money at stake. Self-education is the best defense, not regulation that tries to keep pace with them.
And that is the really big revolution of the past decade.
I mean, consider the Evidence-based Investing Conference that took place in New York last week. It seems that every writer and fund manager that we feature in Weekend Reading was there. (Sometimes it’s a drag being anonymous…)
Here’s a wrap:
- Josh Brown at The Reformed Broker recounts his highlights.
- The bps and pieces blog has summarized the day via a stream of Tweets.
- For those in a hurry – hey, that FCA report won’t read itself – the Blog of Newfound Research offers four key takeaways.
Investors have wised-up to the most egregious nonsense peddled by the asset management industry, and the Internet makes that knowledge available to all.
It’s great that the FCA is wising up too. But most of us will keep doing it for ourselves.
See my earlier article on investment trust NAVs, discounts, and premiums if you don’t know what those terms mean.
The stock market isn’t totally efficient, in my view. But it seldom hands out free lunches.
You might then wonder why an investment trust would ever trade at a price below what its assets are worth (that is, at a discount) – let alone why some people would be dumb enough to pay more for it (a premium).
Actually, there can be good reasons for both situations. Discounts are especially common.
In late summer 2008, for instance, I posted about numerous income investment trusts trading on 10% discounts in that deep bear market.
Discount aisle
Reasons for a trust trading on a discount may include:
- Investors are scared, and so having been dumping their shares in investment trusts. Most trusts are less liquid than their underlying holdings. This can mean the trust’s share price falls faster than its NAV, increasing the discount.
- Investors may be skeptical that the trust’s NAV is really as much as is claimed. Private equity trusts – where valuations are infrequent and often off-market – are typically discounted for this reason. Commercial property trusts (REITs) may trade at a discount if investors suspect real world prices are falling faster than management is updating the trust’s NAV.
- A lack of faith. Investors may believe bad management is going to reduce the investment trust’s NAV instead of growing it. This is often seen with trusts with a poor track record.
- Disinterest. Simply the whims of fashion. Discounts often close and widen from month to month with little apparent rhyme or reason.
Theoretically a very large discount should be arbitraged away by the market before long. In reality sometimes discounts can persist for years before action is taken.
For example, when I first published a version of this article in August 2010 I wrote:
Alliance Trust is one huge old trust that has traded on a discount of nearly 20% for an age.
Arbitragers have looked at releasing the value (by buying the entire trust and then selling all its holdings for a 20% gain, minus costs) but so far nobody has pounced.
Interestingly, the discount finally began to narrow a few weeks later! It’s now around 10%.
What happened? Well, from memory Alliance Trust’s performance improved a tad – or at least investors took a more generous view of it.
But more importantly, an activist investor called Laxey Partners targeted the trust in late 2010, demanding the board take action to limit the size of Alliance’s discount. This interest was enough to close the discount to 15% even before Alliance’s board implemented any explicit measures in response (such a formal share buyback plan).
The Alliance story went through many twists and turns, including the involvement of another activist and much boardroom drama. A Telegraph article from last October provides a recap.
The takeaway for our purposes – apart from wondering whether activist investors read Monevator – is to note that big discounts do not necessarily mean a trust is permanently impaired. They can be and often are reversed.
But sometimes big discounts do portend doom. I’ve seen the value of several specialist property trusts implode over the years. Usually they were overwhelmed with debt. In every case a huge discount preceded their demise.
Finally, discounts may persist when for some reason it’s not possible for an outsider to stir up much of a threat to the status quo.
Typically there’s a large controlling shareholder – perhaps the family that initially set-up the trust. Hansa Trust is a good example.
Premium aisle
As you’d expect, reasons for the rarer situation of a trust trading on a premium are the inverse:
- Investors are bullish, and have bid up the price of relatively illiquid trusts in their mania.
- Suspected undervaluation in reported NAVs. As with the equivalent situation with discounts, this will typically involve unquoted investments, such as property or private equity. Investors may guess the NAV of a trust has risen beyond its officially reported value. The Lindsell Train investment trust is a great example, currently trading at a 58% premium! Investors seem to believe the trust’s holding in its own management company is dramatically undervalued, despite said management urging otherwise. A clue that this is the cause of the premium (besides the sheer enormity) is that the Finsbury Growth Trust has the same manager and very similar holdings – except it has no stake in Lindsell Train. Finsbury currently trades around NAV.
- Strong faith in management. For example, Anthony Bolton’s China trust initially traded on a premium. Investors believed Bolton’s superb record with his UK fund implied he would grow the China trust’s NAV fast enough to make up for the premium and more. But it turned out he couldn’t – at least not in the short-term – and the premium evaporated. The fund now boasts new management and a 15% discount.
- Fashionable. If an investment trust has been in the news or is one of the only trusts operating in a hot sector, it’s often bid up in price.
As a rule of thumb, it’s best to avoid buying investment trusts trading on a sizeable premium, as you may lose money if it narrows.
However I wouldn’t quibble over just a 1-2% permium if you’re a hardcore investment trust owner. Refusing to pay anything but a discount can keep you out of excellent trusts with strong multi-year records for years.
Equally, a trust trading on a discount may not be the bargain it first appears – or at least the discount may not be set to narrow anytime soon. As always, it’s vital to do your own research.
Want more? Please do peruse our other articles on investment trusts.
The good news? You’re able to read English – and to put up with long, syllable-strewn sentences balanced by the occasional geeky joke – and so you’re reading Monevator.
Hurrah! Long may it continue!
But what if you live in Germany, or Sweden, or Barbados? The principles of personal finance and good investing may be international. But the vagaries of local taxes and regulations or what products and services are available in your country will vary.
So a few months ago I asked Monevator readers to share their best suggestions for personal finance blogs from outside the UK and the US that they know and read themselves.
Not mainstream media resources – they’re myriad, and easily found – but websites with reports from the trenches written by everyday investors and seekers after financial freedom.
Below is a list of what you came up with, together with a few words of explanation – paraphrased in most cases from the websites.
Many of the blogs you put forward are actually written in English. Perhaps that isn’t surprise given those making the suggestions were also reading Monevator? Regardless, it means that even if you’re investing with both your feet planted in Blighty, you might find a likely foreign sort to have a fling with.
(Just don’t tell me about it. What I don’t know can’t hurt me. What happens in your Chrome browser’s incognito mode stays in incognito mode. And so on.)
Beware: I have spent an enjoyable day clicking around these sites but I haven’t done deep due diligence. I’m relying on reader suggestions. I skipped a few, but if any of the remaining ones I’ve listed are scams or similar, please do shout below. Don’t take them as gospel until you’ve had a good dig. Actually you should never take anything on the Internet as gospel, even the stuff we write. (Except of course inspirational quotes written in Copperplate Gothic font and superimposed onto pictures of snowy mountains or tropical sunsets. Those all speak the truth and are sacred.)
Australia
Aussie Firebug – An anonymous blog detailing the journey to financial independence through investing in real estate and low cost index funds.
Dividends Down Under – A young couple detail their dividend-focused journey to financial independence.
StojFinance – A personal finance blog with a focus on investing and wealth creation. Jasper also talks about topics including saving money, money making ideas, and more.
Barbados
Odd Cents –Information about spending and saving, which as the author points out “pretty much encompasses everything in the finance world”. It’s curious to read a site like this from a country you might think of as a paradise escape destination.
Belgium
No More Waffles – A 26-year-old guy from Belgium trying to save and invest his way towards financial independence.
Canada
Blunt Bean Counter – Billed as a humorous blog about tax. Presumably has that market sewn up.
Canadian Couch Potato – A regular in our Weekend Reading links, offers peerless advice on passive investing through index funds. Only a shame that so much of the detail is for Canadians. Unless, of course, you’re Canadian.
Canadian Money Forum – A message board about money for Canadians. Gotta envy the connection between the labeling on the tin and what it does inside. (In contrast, what kind of fool would make up a word for the name his blog? *cough cough*)
Canadian Personal Finance – Long-time blogger who bills himself as the clown prince of personal finance.
Money We Have – A personal finance blog with an emphasis on travel.
My Million Dollar Journey – One of the oldies, it’s been around as long as Monevator. The author hit the million, and now riffs on general financial freedom topics as well as following the progress of a handful of guinea pigs readers.
My Own Advisor – Also aiming for a million Canadian dollars, with a focus on dividend income.
Tawcan – A mixture of ideas about lifestyle design and concrete plans towards achieving financial independence.
Young and Thrifty – Saving Generation Y, apparently. Good to aim high!
France
Les investisseurs – I know, it sounds like an exciting art house movie! But apparently it just means ‘investors’ in French. Monevator reader DavidChevance says of the site: “This is more a forum than a blog, however the issues discussed on it are very similar to those addressed on Monevator, with a significant bias towards investment in property, reflecting the widespread French aversion towards the stock market.”
Germany
Der Privatier – The author explains his path to financial freedom, how to grow your capital, and how to use it to generate a passive income.
Exstudentin – A 23-year old ex-student reports on her journey towards a quietly fulfilling life.
Finanzglück – German dad in his mid-30s with two young kids who aims to retire early. Writes about index investing, real estate, and family life.
Finanzwesir – Founded on the principle that the level of financial literacy today is around the lamentable equivalent of the “Can you get pregnant by kissing?” questions of the early last century. I like how he calls an emergency fund a ‘fire brigade’.
Frugalisten – According to Google Translate, the author is urging us to “say goodbye to the washcloth life”. I’d normally suggest something had been lost in transmission, except there’s also a photo of him waving around some currency together with a washcloth. Go take a look, German speakers. An adventure!
Klunkerchen – Aimed “at women (and all people)”. Interesting classification system, Klunkerchen! Seems very comprehensive. I notice it runs on the same theme I started Monevator on, too, many years back, so I got a little nostalgic. Germans have a different perspective on personal finance to us Anglo-Saxon sorts in my experience, but that’s a post for another day.
Madame Moneypenny – Aimed at women who want financial independence.
Ricardo Tunnissen – For seekers of financial freedom! Created by a former banker.
What Life Could Be – A European take on financial independence. The husband and wife team are big fans of US blogs, but missed the lack of domestic detail.
India
Personal Finance Calculators – Monevator reader Shan tells us: “There are a gazillion blogs in India but this is an absolute must. Professor Pattu has multiple retirement spreadsheets and a steady stream of common sense investing tips.”
Italy
Stalflare – Interested in investing and creating a sustainable future, by managing savings, expenses, and long-term investments.
Japan
RetireJapan – Perhaps the only English-language personal finance site in Japan. Provides information about local rules and regulations and has a small but active community.
Netherlands
Geld is tijd – How many blogs feature articles (with pictures) about making mealworm burgers?
In 10 jaar – Blog by a couple who set off in 2015 to become financially independent in a decade.
Mom4life – A mother of three writes about money saving and other financial tips.
Mrs EconoWiser – Dutch Mustachians. (May be defunct… not updated since December 2015).
Norway
Finansnerden – A Norwegian Monevator reader writes about his journey towards “having FU money by April 2026, through increasing income, saving, and investing in stocks, bonds and real estate.”
Pengeblogg – I’m told this is probably the longest running personal finance blog in Norway. I am ill-qualified to disagree.
Singapore
A Singaporean Stocks Investor – Curious site that’s apparently about securing a financial future in an uncertain world. Idiosyncratic but seems very personable.
STE’s Stocks Investing Journey – General thoughts on stock investing and personal reflections. Some links to other resources.
Turtle Investor – Seems to be a mixture of bargain hunting and index funds articles.
Sweden
Gustavs aktieblogg – A lawyer who invests in smaller dividend-paying companies to grow a retirement income stream.
Switzerland
Mustachian Post – How to build wealth by enjoying your life in Switzerland.
Retire in Progress – An Italian Software Engineer working in Switzerland for a big tech company, blogging in English. Saves a whopping 70% of his salary with the aim of retiring in his early 40s.
The Poor Swiss – English language. A young couple, working to become Financially Independent in Switzerland before they are 50.
South Africa
Dividend Tycoon – Recently refocused to be “about investing in general, especially the psychological side”.
The Investor Challenge – Infrequently updated and a bit hard to fathom the gist of it from here, but a reader suggested it.
Spain
Ahorro Capital – Also suggested by Monevator reader David Chevance, who also suggested most of the other Spanish sites here. Dividend focused.
Cazadividendos – Provides “high quality technical advice, similar to Monevator, on topics like for example the tax treatment of foreign (i.e. non-Spanish) dividends, how to declare them in your tax return and how the reclaim the rest of the dividend withholding tax from the foreign authorities.”
Dividends.es – An investing blog whose author also runs Investorinteligente. (Both may now be defunct… not updated since July 2016.)
Enorme Piedra Redonda – More about about lifestyle, traveling cheaply, and meeting interesting people, as the author already took early retirement a few years ago. Infrequent posts. Our Spanish mole says it’s his favourite, as the blog owner is a great storyteller.
Invesorinteligente – An investing blog whose author also runs Dividends.es. (Both may now be defunct… not updated since July 2016.)
Jubilacion Express – Apparently it reads like a “newbies” blog but provides “detailed information”, according to our man in Spain. (At a glance it seems like it may be defunct, but my Spanish is diabolical.)
International / ex-pat
Andrew Hallam – Website home of the author of The Millionaire Teacher. Monevator reader Blacksmith salutes its “advice on passive investing, global diversification vs home currency bias, international discount brokerages, tips on practical implementation and pitfalls to avoid.”
The International Investor – TheAccumulator has linked to this one a few times. Advice and resources for investors in international markets.
Phew! A lot to chew through, but this list isn’t exhaustive – it’s just the sites you guys pointed me to. Have you got a favourite that isn’t on the list? Please tell us in the comments below, and add a few words explaining why it’s a good one. Also, regarding the post title I know that if you’re based in Japan or Barbados, then *we* are one of the international foreign blogs. But I didn’t want to say “outside the US and UK” in the title, as that could take the search engines in the wrong direction. Hence the island view of the world.
Every person I’ve spoken with in Britain says Trump will win. “Social stigma disappears in the booth, you have no idea whats coming.”
— Downtown Josh Brown (@ReformedBroker) October 5, 2016
The first to die was Protesilaus
A focused man who hurried to darkness
With forty black ships leaving the land behind
Men sailed with him from those flower-lit cliffs
Where the grass gives growth to everything
Pyrasus Iton Pteleus Antron
He died in mid-air jumping to be first ashore
There was his house half-built
His wife rushed out clawing her face
Pordacus his altogether less impressive brother
Took over command but that was long ago
He’s been in the black earth dead now for thousands of years
Like a wind-murmur
Begins a rumour of waves
One long note getting louder
The water breathes a deep sigh
Like a land-ripple
When the west wind runs through a field
Wishing and searching
Nothing to be found
The corn-stalks shake their green heads
Like a wind-murmur
Begins a rumour of waves
One long note getting louder
The water breathes a deep sigh
Like a land-ripple
When the west wind runs through a field
Wishing and searching
Nothing to be found
The corn-stalks shake their green heads
– From Memorial, by Alice Oswald
Given my views about what drove Brexit, it’ll be no surprise to hear I thought Trump would probably win. Surely everyone by now understands there are bigger themes at work? If you still want to argue, I presume you’re on-board with them.
Please don’t tell me it’s all about economic inequality. See the exit polls in the links below. Trump voter average incomes skew higher than Clinton’s.
(Also, for the umpteenth time, you personally might have voted for UK sovereignty. Fine, I respect that. But that wasn’t why your side won the referendum.)
I know some loyal readers hate these political asides. Unfortunately for them I want to speak out more than I want to keep them happy. Please skip to the links below for vanilla personal finance.
Sure, my hope is populism starts to recede as this pressure valve is released. That the extreme end of liberal thinking looks up from its personal political navel and re-engages with wider concerns. That Trump moderates in the White House. That the checks and balances work. That things don’t turn out as badly as they can do once his sort of rhetoric is legitimized.
But if so, it won’t be because people who were appalled by it all just bury their heads, hold their tongues, and shrug.
It will be partly because they shouted it down, however modest their platform.
For now, regime change is in the air. Politically and in the markets.
