As part of my website redesign I have created sections on fiscal education. In it I plan to write about things I wish I knew about money when I was younger. My attitudes are fixed in my cultural experiences as a British man growing up first in the Midlands and then in the North. Meeting a range of people across Britain, some of whom are extraordinarily wealthy, has shaped some of what I am about to write.
British Attitudes Towards Money
As a British man in his 30s born in the Midlands and forged by the North, I know I have a peculiar attitude towards money. Having lived outside Britain for a little while, I can see how I come from a society that is as caste-based as it might be class-based. My attitudes towards money can be garnered from my desire to take the humanities route: I have felt that fostering a rich perception of life is as important, if not more so, than conspicuous consumption. To have the privilege of that role, however, requires at the least the position to reject consumerism.
I grew up in Wolverhampton and studied in the North of England. Compared to many peers, I was rich. I lived in a detached house. We had two cars and both my parents had jobs. My parents made sacrifices to put me and my siblings through university. I was supported extraordinarily well. I didn’t struggle for food and was able to take some Ryan Air flights abroad and interrail. In the grand scheme of Britain, I was very lucky.
Yet I harboured certain expectations that I now know rich people do not have. Firstly, I would not purchase new clothes often. Even in my early twenties, I would expect to have a disposable weekend income of 25-40 pounds a week(end) maximum. Purchasing a new pair of jeans could essentially be clearing my disposable income.
After university, I also expected to leave with some fairly substantial debts. I didn’t really expect to be able to pay off those debts. Current thinking suggests that students shouldn’t even try to pay off debts early: https://www.theguardian.com/money/2017/jul/17/uk-students-loans-interest-rate-martin-lewis
Essentially, if kids (people in their 20s!) can begin putting their initial income into a mortgage and investments early, they are rich. If they spend their income for the first decade(s) or more of their working lives paying off their education and the mortgages of richer people, then they are poor. Compared to particularly poor people, of course, my parents had a house, jobs and cars – but there are a great many people who were able to invest in assets and passive income streams that lead to a much different future that just was not discussed in any of my circles.
Teaching Abroad and Finances
Since working abroad my attitudes towards money have changed. I’ve managed to get the point where I can save money and contribute towards my pension. I am, in my mid/late 30s and at a point where I can begin to look towards the future.
When I was younger my absolute expectation was that I retire into relative poverty, and happily so. By that I mean that I would spend my retirement reading and drinking a pint of beer a day, or so. I might own a house, but I wouldn’t be able to go on holiday or similar. And now? I do expect to have a frugal, but more exciting, life. I expect that I can live in different places, with all the trials that might bring.
A huge shift for me has come in the idea of investing. Reading Robert Kiyosak (who I believe is largely a charlatan for reasons I will give elsewhere) was seminal. Rich people tap into passive income streams through assets whereas poor people spend their disposable income on things that will not acquire value. Essentially, relying upon an employment income to become rich isn’t going to work for anyone. Someone of my demographic, an international teacher, needs to be both frugal and wise to acquire assets.
In terms of acquiring assets, Robert Kiyosak recommends purchasing property, often gambling money and acquiring it through non-conventional means. A buy-to-let empire is less ideal now post-2008, although owning property is certainly useful.
An alternative for someone like me is to purchase a portfolio. And that will be the subject of some of my blogposts. Essentially my education is formed by two great friends, both expert teachers who have worked abroad for a fair time. They have both read Andrew Hallam who bases his index fund strategies on John Bogle.
Two points of recent experience that have made me want to add my voice to thoughts about finance. They are:
- A new colleague spoke to me about their investments with a fund manager (with whom they are paying 5%+ management fees…). They are young, in their 20s, and so they are in a much better position than most.
- My school taking part in the stock market challenge. I suggested taking my index fund portfolio as a comparison. Index fund investing is something that needs to be mentioned as a credible option to students.
The vision for good finance is simple. Dickens said it through David Copperfield’s Mr Micawber’s famous, and oft-quoted, recipe for happiness:
“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Here, a financial advisor told me that it is not unlikely for some folks to earn 80000AED a month (15000GBP!). However, such folks can end up spending huge amounts just keeping up with their peers. Their parents and their kids need a perpetual stream of conspicuous consumption in order to socially survive within the spheres where everyone is awash with huge income streams.
In contrast, looking at recent job postings Hull reveals social workers and similar on wages from 19k – 30k, all of whom presumably do not work the posted 40 hours a week.
In both instances, though, what is needed is frugality. And teaching is a profession that allows this.
I know what it is to not have enough money to afford an MoT. I know what it is to know that you have to pass a driving test right now because you cannot really afford any more lessons. It is not a place of unhappiness, or even just of functionality: it is a place of just being. The balm it requires is a sense of cultural worth and a rich inner-life that is not subject to money.
If you can’t afford to pay for it, don’t buy it now.
You can prepare food cheaply. Even in expensive places, cheaper staples can be found.
Buy necessary luxuries (for me these are books and coffee…).
Your peers will determine your spending habits. You can makes books your peers in this. If you have an expensive partner and kids with similar tastes, good luck.