Lockdown diaries 11: A plan for the future

I know Melanie well and she’s a good egg.

Sustainable Melanie

Despite being an amateur ‘economist’, and a fledgling professional environmentalist, I have a keen, personal interest in the continued future of our planet. (I’m guessing you do too.) I therefore spend a lot of time reading up on this topic and debating above my weight to make sure I don’t get side-tracked by trivialities and tempted by quick fixes.

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POSTSCRIPT TO IT’S STILL A CRIME TO BE OLD.

Almost forgot the most important part of this post. What happens if and when the government goes bust. It almost happened a couple of weeks ago and the Bank of England had to step in with a few £billion. I have said it before, but I wouldn’t trust the British pound, the Euro or the dollar, possibly the Swiss Franc, but quite frankly any of them could be devalued. In the case of the British pound we have had the financial crisis, then we had all the money wasted on Brexit. As I said at the time we will come out on December 31^st. without a deal, we could have done that more than three years ago, saved a shedload of money and been over the worst of the chaos by now, and we have been saddled with Boris and the Tories for the next five years. Now we have the dreaded virus, how much is that going to cost? We have had decades of quantitative easing a.k.a. printing money. So, I think there is a very real possibility of the government going bust, or at least a massive devaluation of the pound. I won’t go into the details here of what that would entail, because I don’t effing know, but it would probably ruin your whole day.

One thing you may not be aware of is that after the last financial crisis, legislation was quietly passed that would allow the government or your bank to raid your account and basically steal your money. It actually happened in Cyprus, it was a condition imposed by the EU and the International Monetary Fund for bailing out the Cypriot banks that were heavily invested in Greece. People with less than 100,000 Euros in their accounts had to pay a one-time tax of 6.25% those with more than 100,000 Euros had to pay 9.9%. They were “compensated” by having their cash converted to bank shares at 37.5% of the cash value. In the case of the legislation here, the idea of course is to save the government from having to bail out failing banks again, make their customers bail them out, it could happen anytime. The rich have all their cash offshore so would be unaffected and most people have only debts so they would be unaffected. But a lot of older people who have been frugal and saved all their lives have large sums on deposit in banks, they would be the ones who lost out.

So where do you put your money? It’s a problem I will have when I sell Eden Barn, I could do with a problem like that I hear you say. But I can just imagine having a large sum of cash for the first time in my life and it suddenly being worthless!! If you don’t already have a nice house in an area where you are happy to live, now is the time to buy one. If you have savings and a mortgage you should have paid it off years ago, ideally you should have had an offset mortgage. Google it, it has worked well for me and all the people I recommended it to. If you live in a town or city now is the time to buy that second home in the country, UK or abroad. Buy the car you always wanted or a boat, or some antiques or nice pictures or just spend your money on enjoying yourself. If you have a lot of cash, perhaps some in a Swiss bank account in Swiss Francs, but spread it around a bit to reduce risk. Physical gold is good but then there will be people out to rob you, so keep it quiet. I would trust stocks and shares even less than cash but it’s up to you. Property and land is the safest bet, I am not going to recommend that you become rentiers, but by all means buy a bigger or better house in a nicer area, but not one where your neighbours are all better off than you!!

I think a lot of people are going to question why they work their arses off to make money that they don’t have time to spend or use to buy dross. If you have the house and its paid for you don’t need a lot, just enjoy yourself and work less.