A round up of interesting or cool stuff I’ve read.
Rishi Sunak unveiled his latest budget this afternoon.
You can get a more detailed overview at the usual places:
- Budget 2021: What it means for your money – Financial Times
- Budget 2021: Key points at-a-glance – BBC
- Budget 2021 at a glance – This is Money
But I thought I’d just highlight anything that looks like it will affect me in particular.
Tax – The personal tax allowance and the higher rate thresholds will be frozen from April 2022 to April 2026. Not great for mid-earners, but good for my studying – I won’t have to learn new numbers each year! (Small victories, I guess).
Savings – I’m intrigued by the announcement of a ‘Green Savings Bond.’ I’ll keep an eye out for any further details, but I guess they’ll just be another gimmick, and I’ll be better off just sticking to my current portfolio.
Property – As someone who doesn’t own a house, I am annoyed at yet more measures that will undoubtedly push house prices ever higher. Just build more houses, please! (Yes, I acknowledge that, if I did own, I probably wouldn’t mind).
I don’t know if any academics read my blog, but if they do, they might have missed the latest valuation update for our pension scheme (the Universities Superannuation Scheme, USS).
In short, at the moment employees pay in 9.6% of their wage and employers pay 21.1%, for a total of 30.7%. This buys you a defined benefit pension of 1/75th of that year’s salary.
The valuation is worried that there isn’t enough money in the pot to meet future requirements, and recommends increasing that contribution to a total of 42%, for the same benefit. (This might entail an employee contribution of 13-ish% and an employer contribution of 29-ish%).
If I was planning to stick around in academia, I’d be worried about a constantly increasing percentage of my wage being deducted to pay for the pension.
I think it’s a good deal at the moment – not as good as other DB schemes, but that guaranteed income still gives you a lot of security in retirement. But, there will come a point where the costs outweigh the benefits, and then I’d be tempted to stop contributing to this and instead open a SIPP.
As it is, I intend to be long gone by the time this comes into effect.
Look out for more University strikes next year when this all gets put to the unions!
Interesting links that caught my eye this week:
- Foxy Monkey – £1000
A great post from Foxy. We bang on about the benefits of an emergency fund, and for good reason. This illustrates the point perfectly.
“This is what money is for! Buying your way out of a really difficult situation. Making an ok experience much better. I’ve written before whether money can buy happiness. Well, if money can buy the lack of stress and an easy-going life, doesn’t that count?”
- My Deliberate Life – It’s been a while
Wephway makes a welcome return to blogging after a long absence.
- Turtle Investor – Tanks! DPS! Healers! MMORPGs Influenced How I Manage My Crypto Portfolio
I’m a sucker for anything relating to videogames. Whilst I’m not big on cryptocurrencies, the same principles can be applied to investing in other asset classes. Off the top of my head, I would say that Tanks = bonds, DPS = equities, and Healers = cash? Curious to know what others would assign to each class!
- Irrelevant Investor – What Happened to Gold?
“The idea that gold protects against the decline of fiat or the debasement of the dollar is a really good story, one that intuitively makes sense to everyone. But maybe it just isn’t true?”
- Cash for Kat – The Road to Rucker Sales Consulting
Kat details her already impressive journey up to the founding of her own business.
- Gentleman’s Family Finances – Financial Origins of GFF
I presume the last (but certainly not least) entrant into the Sovereign Quest Financial Origin Stories challenge.
- This Is Money – The ISA rules need to change
The rule in question: you can only open one of each type of ISA per tax year. I don’t understand why though? I’d love to be able to pay into two stocks and shares ISAs per tax year. I’d have one with the bulk of my savings in a standard global index tracker, and the other as a fun account with a few individual stocks. Sure, I could just move everything to Freetrade / Trading212, but I don’t know if I want to trust such new companies with my entire life savings.
- SMBC – You have 11 opportunities to be great at something
“It takes about 7 years to master something. If you live to be 88, after age 11, you have 11 opportunities to be great at something.”
- Clio Chang – In Praise of Cold-Calling Your Friends
“In a time when it feels like the world is tightening around us, reaching out to people out of the blue can feel expansive. At the very least, it’s not boring. What more could you ask for?”
- Your Money Blueprint – Would you trade places with Warren Buffet?
“Would you trade places with Warren Buffet? If you are younger than 80, chances are that most of you would answer no. No to over $81 billion! That is because time is far more important than how much money we have. So make the most of your time left on this earth by designing your best life. Say no to that unfulfilling job. Say yes to things that you won’t regret.”
- Banker on FIRE – Your Secret Money Weapon & A Chat With Kat – The Big Leap: Finding Your Zone of Genius
These two posts are complementary, and I recommend reading them both. BoF discusses the benefits of finding your edge in building wealth. Meanwhile, Kat has a nice summary of “The Big Leap” by Gay Hendricks. The key points for me were “what do you love to do?” and “what is your unique ability?”
- Sign up to Trading212 via this link and we both receive a free share.
- Sovereign Quest – A new personal finance curation site launched by Indeedably. Check out the March Challenge.
Thanks for reading. Hope you’re all having a great week!