This week, we look at the greying of society and how to make money from it; shine a spotlight on the “great pensions bubble”; and explain how to cut your tax bill without getting yourself in the papers.
Merryn kicks off the issue with a look at super-low interest rates, asking “what are they good for?” The answer, you might not be surprised to learn, is “not much”. Not big corporations, not the general public, and certainly not social cohesion as wealth inequality continues to rise, with low rates driving up the price of the assets owned by society’s “haves”.
The best way of making sure you hang on to your wealth – and grow it – of course, is to take out a subscription to MoneyWeek. It’s a sound financial move.
The perils of tax transparency
The heat from the Panama Papers leak is still being felt around the world – and in the House of Commons, as David Cameron was forced to defend himself against accusations of “dodgy” dealings. It’s “not been a great week” week for the PM, he admitted. We round up the papers’ views on the whole business, and Simon Wilson takes a more detailed look at what’s been going on in his investment briefing, finds out what all the fuss is about, and asks: what now for tax havens?
Meanwhile, Matthew Lynn in his City View column argues that the demands for greater transparency that have led to politicians publishing their tax returns could lead us down a path we really wouldn’t want to tread. It might start off with politicians publishing letters from their accountants, but where would it end? Would you want the details of your financial life laid bare for everyone to see?
Complete openness might sound nice in theory, but Matthew comes up with three very good reasons why we’d be much better off if we kept things just between ourselves and the taxman.
Make money from this “demographic timebomb”
Our main feature this week is by regular contributor Jonathan Compton. While many people worry about overpopulation leading to humankind’s demise, Jonathan reckons the real threat is falling birthrates and longer lifespans, leading to “a serious problem of too few productive people”.
“All governments’ finances have been predicated on the assumption that the population would always rise”, says Jonathan, with enough people in work to support the retirees. But the “grad to granny” ratio is contracting, and now this model is “irredeemably broken”. A second problem is that old people prefer saving to spending, and don’t buy as many things as young people.
Jonathan sees opportunity, however, and picks five of the best stocks to buy to profit from the demographic shift. If you want to find out what they are, take out a subscription to MoneyWeek.
Making stock-picking child’s play
There may be fewer children being born, but the ones that are around get plenty of money lavished upon them. That means healthy profits for the toy industry. But what should you buy? Lego is privately held and the yield from the world’s biggest toymaker, Mattel, is a paltry 1.4%, says Alex Williams. But don’t worry. Alex has found UK-based, Aim-listed stock that could offer a nice “inroad into a lucrative sector”.
Alex also picks his weekly gamble – a mining royalty stock that might just be too good to be true – and presents his roundup of the best share tips from the rest of the financial press.
The great pensions bubble
Edward Chancellor looks at the problem of soaring pension deficits among US companies and municipalities, with many schemes’ liabilities far outweighing their assets. Promises have been made that cannot possibly be kept, and the “gap between the belief in those pension promises and the ability to pay looks very much like a bubble”
“The risks are far- reaching”, he says, and not confined to the US. In Europe, too, pensions threaten financial stability. To find out why, take out a subscription to MoneyWeek.
House prices, the pond life preying on expats, and how to cut your tax bill
Natalie Stanton takes a look at the London property market, where it seems prices are starting to cool off. “Up to 40% of the houses for sale in some areas of the capital have cut their asking prices”, she says. The problem is an excess of supply, as buyers for high-end new-build properties dries up.
Sarah Moore warns expats – especially those living in countries where financial controls are less lax than in the UK or EU – to beware of the “exotic pond life” operating there, charging “eye watering” fees for dispensing poor advice, Sarah explains how to avoid the scammers, and offers advice on taking control of your own money.
And in the seventh of our series of beginner’s guides to investing, Merryn Somerset Webb looks at how to cut your tax bill via entirely legitimate means that nobody could raise a disapproving eyebrow at, via tax-free “self storage” vehicles such as Isas and Sipps.
Plus, Chris Carter looks at holidays for wine-lovers, we have a selection of the best properties for sale for around £500,000, and a look Skoda’s spiced-up version of its “pensioner friendly” Octavia hatchback.
If that sounds like the thing for you, take out a subscription to MoneyWeek.