4th July And All That
Can you feel the excitement?
Disclaimer: The current crop of MPs across all parties is the weakest of my lifetime—maybe the worst in our history. Few politicians have gravitas, charisma, or charm. Mediocrity seems to be the essential qualification. There is every reason to believe the prospective MPs coming in after 4th July will be the same or slightly worse.
That said, there is great cause for optimism….
Friend,
So, 4th July it is. As a financial adviser, this is when I bombard you with charts showing that “the markets don’t care who’s in power” and how, under Red and Blue administrations, the value of The Great Companies of the UK has increased over the decades.
I’m not going to do this. I like you too much. Despite my loving protectiveness, you’ll see the graphs in one form or another over the next six weeks or so. Let that rest on someone else’s conscience. There’s nothing I can do about it.
Yes, the election will dominate the news (you watch it, don’t you? We’re all flawed in one way or another). Yes, it will be depressing. And yet, whoever is in power on 5th July, not much will change-and that’s a good thing. The power to change lies within you, not within the purview of politicians. Understand this and lo-that distant light is not a train bearing down on you but is instead the end of the tunnel.
What will change?
Whoever wins, taxes might go up. They might not. Don’t sweat it. Those of us in work already carry the highest tax burden since 1948. It’s hard to believe they can go up by a material amount.
Under the “Conservatives”, Income Tax rates are astronomical. The Personal Allowance (that slice of your cake the beneficent State allows you to eat without first gorging on it) has been frozen for years. Capital gains and dividend exemptions have been slashed so far that they may as well not exist. Corporation Tax has just gone up by a third. Buy-to-let landlords are sinking under a raft of tax hikes and removed “perks”.
A Labour victory will hit private schools with a nasty little strain of envy politics, some red meat to keep a faction quiet for a while. Other than that?
“For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Sir Winston Churchill
Pensions and ISAs will probably be dicked around with in some stupid way, the stupidity of which is obvious to all but those implementing the stupidity. Both parties continually do this. It is what it is.
As an aside, on a cultural level, for half the population, I struggle to see the joy in having a Prime Minister who believes a woman can have a penis. Of course, the current incumbent is a man, and I’m not sure he has one. It’s all so confusing.
But there is good news.
Be the change you want to see
The election won’t materially change our lives. You are responsible for that. If you want to change your life, make changes. Have a plan, one that transcends short-term political nonsense.
The next administration will be out of our lives in four or five years, maybe a bit longer (but not much, probably). In the scheme of things, it’s not significant.
The same goes for the subsequent administration. And so on and so on.
However, you and I are here for the long haul. Our hopes and dreams span decades. We have a lifetime financial plan, and we stick to it. Current events-disturbing as they can be-do not deter us. We are aspirational self-starters and, aside from family, do not expect or seek help from others to achieve our vision and satisfy our values.
Which is just as well, given the above!
To effect change, keep on keeping on
Your financial plan tells you the path you need to keep to. Regardless of the election outcome, per the terms of your plan:
Keep on saving for your future self. Use all allowances as fully as possible. Yes, I mean ISAs and pensions (subject to them being continually dicked around with, as noted earlier)
use every means to pay as little Income Tax as legally possible (if you want to pay more, crack on: HMRC accepts voluntary donations)
if affordable, continue to gift as much money as possible now, with a warm hand rather than a cold one; the sooner it leaves your estate for your loved ones, the better.
Do the above, sit in your favourite chair, and figuratively stare out the window for decades as your adherence to your plan through thick and thin (easy to type, really hard in practice) delivers financial salvation.
Continue to treat the money media as nothing more than advertorials, constantly trying to lure you this way and that with the latest fad. Non-Fungible Tokens, anyone?
You and yours
At times like these, the greatest realisation we can have is that we don’t need politicians. They need us. Don’t give them headspace. This magical thing called life is too short. Grift and mediocrity are not for us - let those in that world swim in their sewer, never the twain and all that.
This Britain just about remains “Great”. Express gratitude. Tell your loved ones you love them, then tell them again. Smile. Do favours for strangers. Keep your friends close.
4th July? This, too, shall pass!