Farage Ltd and Similar Watch

[visage]

Trickle down economics doesn't work.

 

[andyc225]

Yes but increasing the gap and thus raising the standard of living way beyond the Pareto principle will alienate people further and cause widespread social unrest. The rich 5% will have more wealth than the entire country combined and giving a small amount of people that amount of power and no check on them will not end well see; Russia, Lenin and Stalin.

That which I've highlighted is already the case and has been for some time. The only way you'll change the Pareto distribution is by encouraging business, job creation and innovation as well as putting money back into the pockets of the many. The majority of higher rate taxpayers earn modest salaries and don't consider themselves to be "wealthy". If we were to put money back into their pockets, could we not cause a positive trickle-down effect?

Education and opportunity are the only two things that can change it not just education. As for the second part, did you have your eyes closed for the last 2 recessions, PPI and endowment miss-selling, the sub prime exploitation and the setting up of banks off shore to avoid tax. The very notion that the banking industry is the biggest tax generator is all wrong for the balance of any country and in particular making one where NOTHING useful or new is generated. The banking industry also drain Britain's brightest minds into jobs where money is the overriding factor and perpetuates a greed culture which is at best unhealthy. I don't believe anybody has mentioned bonuses other than you.

Oh and give these thieving cunts an inch and they'll steal, lie and shred their way to a bigger bank balance.

Everyone who has an ISA account is subscribed to a form of tax avoidance vehicle. It just so happens that the ISA is encouraged by the state and is seen to be an acceptable face of tax avoidance. The majority of people can't possibly save enough to fill their annual allowance when other bills are taken into account, especially with the new combined 15k+ ISA. There are many different types of tax avoidance scheme which are legal but are "morally objectionable". Until there is a fair rate of tax for all, these schemes will not go away.

I wasn't around in the 1980s but if I were to travel back in time and ask someone what they thought the value of their home would be in 20 to 30 years I bet I'd get some figures that would be outlandish with the hindsight we have now. You have to remember that people who work in customer-facing environments at your local bank are effectively salespeople and not what a layperson might consider to be a "banker". If selling policies with PPI included in such a way that the bank would generate interest on its value was what attracted commission before the scandal broke out, that's what they had to do. In order to generate economic activity, a bank has to produce profit much like any other business. Banks aren't the only businesses that work at the boundaries of the law to maximise revenue. Banks are like football clubs in a way - sometimes people almost choose to forget that they're businesses above all else.

The fact that the financial industry in its many guises is Britain's biggest industry and generator of tax is something that isn't going to change. It's wrong to say that nothing new is generated as a result of banking activity; what about the millions in investment that banks, venture capitalists and so on plunge into businesses that create jobs across all sectors? I might've nicked the odd chocolate bar from the local offy when I was a kid but the work I do now is purely to put a meal on my table and a roof over my head. Not everyone who works in the financial industry is a "thieving cunt". In order to stay in a job I need to do whatever it takes to increase the value of client portfolios. I'm not fortunate enough to have the skills or knowledge to work in any other industries. Around 15% of my personal portfolio is devoted to green investments such as the generation of energy from wind farms and solar collection. I also lend thousands of my own money out to SMEs through Funding Circle and so on. Does that qualify as money that's doing some good?

 

[Johnny75]

Andy I'm not having a pop at you personally (just as I wasn't at Vis) it is the industry as a whole and the last recession was really in the late 80's/ early 90's when interest rates hit 15% because of pure greed from the city caused Black Monday (and to a certain extent the populous had grown giddy on the release of funds to them through cheap credit).

It has been shown time and again the banking industry cannot behave within the law and so has to be regulated and even more so now with the event of new products that are spurious in their nature to say the least. And nobody is saying that banks don't need to make a profit as all business does, it is the way they do it which is immoral.

I imagine you don't put money into Funding Circle for your health but more for the 6% return you can get on it, which is better than an ISA isn't it? Much like any crowdfunder or business angel you are disguising your need money generation with benevolence. There is absolutely nothing wrong with earning money from investment, hell my business wouldn't exist without it, but please don't tell us you are doing it for the greater good.

 

[andyc225]

Andy I'm not having a pop at you personally (just as I wasn't at Vis) it is the industry as a whole and the last recession was really in the late 80's/ early 90's when interest rates hit 15% because of pure greed from the city caused Black Monday (and to a certain extent the populous had grown giddy on the release of funds to them through cheap credit).

It has been shown time and again the banking industry cannot behave within the law and so has to be regulated and even more so now with the event of new products that are spurious in their nature to say the least. And nobody is saying that banks don't need to make a profit as all business does, it is the way they do it which is immoral.

I imagine you don't put money into Funding Circle for your health but more for the 6% return you can get on it, which is better than an ISA isn't it? Much like any crowdfunder or business angel you are disguising your need money generation with benevolence. There is absolutely nothing wrong with earning money from investment, hell my business wouldn't exist without it, but please don't tell us you are doing it for the greater good.

I know you're not having a pop at me personally but I've always felt that the industry I work in gets a bad press at times. I feel I need to defend it sometimes (as best I can).

There's a bit of a common misconception about the purpose of the ISA, particularly about the old savings book type ISAs that are being phased out in favour of a 15k+ allowance for all universal ISA. The point of an ISA is to use it as a tax efficient investment vehicle. In its simplest form, i.e. the version most people use, you provide the institution with a few grand in cash over the course of a year and they provide you with a (paltry) return on it. These institutions rarely tell you what they actually do with the money you lend them but because they provide a simple return on your money they appear attractive to the layperson. This tax year the ISA allowance for so-called cash ISAs is £5940. I don't think that £59.40 is an acceptable return on that investment by any stretch of the imagination. It certainly won't create a compounding effect that'll improve your portfolio's worth over time in a tangible way.

In the next couple of years, peer to business or peer to peer investments will become available as part of the ISA vehicle. At the moment all returns on these types of investment are fully taxable. Funding Circle is the most famous example but provides some of the poorest returns in the industry. There are companies that offer returns of 30% plus if you're willing to take more risks with your money such as lending it abroad. All profits generated from funds stored in an ISA account are tax-free, which is what attracts people who deal in shares for instance. I'm not saying that I invest purely for the "greater good" because I don't. I invest because I feel it's the right thing to do and because I enjoy doing it. What would I achieve if I were to just blow all of my money on a car or a holiday? You couldn't tell a café owner who has been turned down elsewhere for the money he needs to borrow that investing in him is not doing any good. As far as people like that are concerned, the banks just don't want to know. I take the time to visit all of the businesses I invest in as part of my due dilligence process and I try to get a feel for what they do, even if it is just in a "mystery shopper" type capacity.

A hedge fund doesn't exist to make money to dole out to its employees at the pub every Friday (apart from their wages of course). The traders' objective is to increase the value of the fund so that it can be sold on and these people have to do whatever they can in order to achieve that, even if it does push things a little. The finance industry is not the only industry in which companies have flouted the law or pushed the boundaries on occasion. What about the energy firms putting up bills purely to increase profit margins and the tradespeople who are ripping off pensioners? Surely they're making a more negative impact?

 

[visage]

If we were to put money back into their pockets, could we not cause a positive trickle-down effect?

Instead of giving money back to rich people in the hope that they'll have a sudden burst of altruism and pass it on to the poor, why not give it to the poor directly. Just to save rich people from the temptation to spend it all on themselves, you understand....

 

[arklowolf]

Instead of giving money back to rich people in the hope that they'll have a sudden burst of altruism and pass it on to the poor, why not give it to the poor directly. Just to save rich people from the temptation to spend it all on themselves, you understand....[/QUOTE

If the poor spend the money (all on themselves as one would expect since they need 'things' and are deprived), Would it increase Tesco's, McDonalds, Diageo's and other multi-nationals profits? Thereby creating more wealth for rich people?

 

[The Saturday Boy]

If the poor spend the money (all on themselves as one would expect since they need 'things' and are deprived), Would it increase Tesco's, McDonalds, Diageo's and other multi-nationals profits? Thereby creating more wealth for rich people?

Are you suggesting a trickle up effect? Sounds like a good idea.

 

[arklowolf]

Are you suggesting a trickle up effect? Sounds like a good idea.

I'm not suggesting anything, it's is a question that has always puzzled me. If we take money from 'the rich' and give it to 'the poor', what will the poor do with the money? Answer; spend it. What will they spend it on? Answer; Let's say food, clothing and heating. Where will they spend it? Answer; I'd guess, Tesco, Lidl, Aldi, McDonalds, Matalan, British Gas. Who gets richer: Answer; the multi-nationals shareholders and bosses.

I think this principle can be applied to any spending really.

A few other questions, which you will no doubt have the answer to:
At what monetary level do you class someone as being 'rich'?
At what level do you class someone as being poor?
If you gave the 'poor' person some of the 'rich' persons money and they spent it all on drink or gambling, should we give them some more?
If someone starts out 'poor' and works hard, makes a successful business and becomes 'rich' at the age of 40, should he then have some of his hard earned wealth taken away and given to one of his peers who hasn't worked since they were 19?
Do you know of anyone who has given away the wealth they have earned voluntarily in that way? eg. a Branson, a Sugar, a Weller, a Blair, an Attenborough, a Redgrave? a Brand? a Bragg?

 

[The Saturday Boy]

I'm not suggesting anything, it's is a question that has always puzzled me. If we take money from 'the rich' and give it to 'the poor', what will the poor do with the money? Answer; spend it. What will they spend it on? Answer; Let's say food, clothing and heating. Where will they spend it? Answer; I'd guess, Tesco, Lidl, Aldi, McDonalds, Matalan, British Gas. Who gets richer: Answer; the multi-nationals shareholders and bosses.

If it is a question that has always puzzled you, your answer looks good to me so hopefully you will sleep better. Those in society with the least disposable income would get more clothing, food and heat and the rich still get rich. Seems fair enough to me.

I think this principle can be applied to any spending really.

A few other questions, which you will no doubt have the answer to:

At what monetary level do you class someone as being 'rich'?

I don't have a monetary level. Compared to some I am fabulously wealthy, compared to others I am a pauper.


At what level do you class someone as being poor?

Very few people in this country are poor.

If you gave the 'poor' person some of the 'rich' persons money and they spent it all on drink or gambling, should we give them some more?

If you give a rich person poor people's money and they spent it on morally reprehensible financial schemes, should we give them some more?


If someone starts out 'poor' and works hard, makes a successful business and becomes 'rich' at the age of 40, should he then have some of his hard earned wealth taken away and given to one of his peers who hasn't worked since they were 19?

Yes


Do you know of anyone who has given away the wealth they have earned voluntarily in that way? eg. a Branson, a Sugar, a Weller, a Blair, an Attenborough, a Redgrave? a Brand? a Bragg?

Yes, but your two questions above although apparently linked are differentiated by the word 'voluntarily'. In the first question, a 40 year old rich person should, by way of taxation, contribute to the welfare state. You appear to be portraying the successful entrepreneur as a victim for having to pay tax and the others (many of whom are left leaning) as hypocritical because they have kept their money. It's a rather shallow argument.

...

 

[Sniffer]

http://www.bbc.co.uk/news/uk-27407126

They are flooding in and taking all of our jobs. Oh hang on........

 

[Johnny75]

http://www.bbc.co.uk/news/uk-27407126

They are flooding in and taking all of our jobs. Oh hang on........

It would be interesting to know the demographic of where they were employed and for that matter migrants in general. I think it would surprise a few but have no hard evidence.

 

[andyc225]

Instead of giving money back to rich people in the hope that they'll have a sudden burst of altruism and pass it on to the poor, why not give it to the poor directly. Just to save rich people from the temptation to spend it all on themselves, you understand....

Being "rich" or being "wealthy" is not about a having a certain amount of money. Wealth is a measure of how long you can sustainably live on what you have without taking any further steps to earn money. If you have enough income generating assets to cover your liabilities without taking any further action such as going to work, you are mathematically "wealthy". Richness is a state of mind associated with the value of your life. Are you living a rich tapestry of life? Those with less disposable income are less likely to answer yes.

In today's materialistic society, people with less disposable income as much as people with more disposable income need to be seen to own the latest gadget, a shiny new car or the nicest clothes in order to feel Abraham Maslow's fabled sense of "self-actualisation". They take out credit/wage advances and get trapped in a cycle. Those with less money to spend are more likely to spend a greater percentage of what they've got and therefore can't break the cycle easily. Breaking the poverty trap is not as simple as giving someone a few quid; they need to learn for themselves how to take that amount of money and make more from it.

British society educates the masses into debt and subservience. It takes a very special person to see through that fog of received wisdom and be a genuine visionary and free thinker.

 

[visage]

SO we shouldnt give poor people money because they'll waste it on iPhones. Or, alternatively, food. Excellent.

 

[andyc225]

SO we shouldnt give poor people money because they'll waste it on iPhones. Or, alternatively, food. Excellent.

Not at all. What I'm saying is that giving the poor money is just a sticking plaster. Unless you have or develop the knowledge to generate more money from what you have, you'll forever be impersonating Oliver Twist at the orphanage - "can I have some more?"

 

[leedswolf]

It would be interesting to know the demographic of where they were employed and for that matter migrants in general. I think it would surprise a few but have no hard evidence.

IIRC something like 70% are employed in the SE?

 

[visage]

Not at all. What I'm saying is that giving the poor money is just a sticking plaster. Unless you have or develop the knowledge to generate more money from what you have, you'll forever be impersonating Oliver Twist at the orphanage - "can I have some more?"

So they should just earn more. What of the 2.5 million unemployed chasing a few hundred K jobs? What should they do? Just stop being so useless?

 

[arklowolf]

Being "rich" or being "wealthy" is not about a having a certain amount of money. Wealth is a measure of how long you can sustainably live on what you have without taking any further steps to earn money. If you have enough income generating assets to cover your liabilities without taking any further action such as going to work, you are mathematically "wealthy". Richness is a state of mind associated with the value of your life. Are you living a rich tapestry of life? Those with less disposable income are less likely to answer yes.

In today's materialistic society, people with less disposable income as much as people with more disposable income need to be seen to own the latest gadget, a shiny new car or the nicest clothes in order to feel Abraham Maslow's fabled sense of "self-actualisation". They take out credit/wage advances and get trapped in a cycle. Those with less money to spend are more likely to spend a greater percentage of what they've got and therefore can't break the cycle easily. Breaking the poverty trap is not as simple as giving someone a few quid; they need to learn for themselves how to take that amount of money and make more from it.

British society educates the masses into debt and subservience. It takes a very special person to see through that fog of received wisdom and be a genuine visionary and free thinker.

very good post. Will go down like a lead baloon.

 

[andyc225]

very good post. Will go down like a lead baloon.

I aim to please.

So they should just earn more. What of the 2.5 million unemployed chasing a few hundred K jobs? What should they do? Just stop being so useless?

We need to challenge the received wisdom and the set of norms that society gives us; that going to work and earning money is the best way of putting a meal on the table. It's the least complex method of bringing in money but offers the most exposure to risks such as illness, redundancy and to market forces which dictate demand for your chosen profession. Having just one source of income is the quickest way to get into difficulties. The best way to earn a living for yourself and your family is to produce multiple passive sources of income by having enough income-producing assets to cover your living costs.

As I said before, society educates people into debt and subservience. At school and during childhood in general we're taught that it's important to go through each stage of your educational career and move into university (where you gain tens of thousands of £ of debt). Once you graduate, you move into a fairly humdrum career and the retirement sand timer starts in earnest. You might get married, have a couple of kids, buy a property and so on. While your kids are growing up you're educating them to have the exact same principles about going to work and earning a steady wage, and thus the cycle continues. Deep down, the idea of "social mobility" refers to the breaking of this cycle. Given the right tools, I believe that literally anyone could grab the bull by its horns and improve their own financial situation exponentially. Only a small minority of people choose to take this sort of action to improve themselves financially, and this is what causes the gap between the "rich" and the "poor" to grow.

A book on the subject I'd recommend is Rich Dad, Poor Dad by Robert Kiyosaki. Audio versions are available to listen to on YouTube. He explains these ideas far more effectively than I could ever hope to. Some of what the "Rich Dad" character says might be challenging, shall we say, for someone who leans to the left politically. The vast majority of people will chime with practically everything the "Poor Dad" character says. I first read this book as part of my course when I was studying at college but many people from different walks of life have been inspired by the financial understanding it tries to promote.

 

[visage]

Ah. Now I get you. Poor people should obtain income producing assets so they're not reliant on having a job, and they should obtain the funds to buy these assets by being more thrifty.

Seems like an excellent plan, with no holes in it whatsoever.

 

[EdgeOfTheAlps]

Ah. Now I get you. Poor people should obtain income producing assets so they're not reliant on having a job, and they should obtain the funds to buy these assets by being more thrifty.

Seems like an excellent plan, with no holes in it whatsoever.

If the kids go without a meal a day for a couple of months wannabe "rich Dad" might have enough money to buy a small percentage of Apple share. This time next millennium they'll be millionaires