Why This Rebel Is Keen To Remain In Europe

I’m on a narrowboat this week and not paying much attention to the news, but when an MP is murdered in cold blood it’s an event that can’t be ignored.

It seems as though the perpetrator was suffering his own mental health problems, but such extreme action has to have some underlying trigger. It wouldn’t be unreasonable to guess that the Brexit campaign could have been it. I can’t be the only one to have become thoroughly disenchanted with the way in which the campaigns have descended from at least some semblance of intelligent debate to bickering, personal attacks and name calling. It seems that this has to be the way of modern politics.

(FILES) This file photo taken on August

image from metro.co.uk

What depresses me further is that the debate seems to have become about nationalism and whether you are ‘for’ or ‘against’ Britain and her continued existence. To even suggest that a vote to Remain is anti-British has to be the ultimate in distortion of reality.

I’m as passionate about this country – by which I mean the United Kingdom in its entirety – as anyone, and it’s because of this very belief that I am so strongly in favour of staying in.

That doesn’t mean I’m happy with the status quo, far from it. Europe is by no means perfect, and if it is to succeed in the long term it has to change. I think that the idea of ever closer political union in Europe is wrong, and that the EU has made some significant errors of economic policy that haven’t helped the lives of its citizens.

Red Tape Can Be Good

But despite the rhetoric there is a lot of good to being a member of the European ‘Club’. A lot of the so-called ‘red tape’ that comes out of Brussels is aimed at harmonising trade, and that requires regulations to be proposed, drafted, debated and accepted. In return our businesses can sell their goods right across Europe with no further restrictions, and this has been a boost to trade over the years. In my own field, financial services, it has taken a long time to get this harmonisation in place and there is still a way to go, but Britain has been a significant winner in its areas of expertise, with 30% of the European banking market, half of Europe’s fund management business, and well over 80% of hedge fund activity, a major money-spinner for the City. Leaving the EU would definitely put this major trade at risk, and it could take years to recover our position. Surely if rules are being drafted for the pan-European market that we will have to conform to anyway, it makes sense to have a place at the negotiating table?

Immigration

Arrivals from the European Union customs channel at Stansted Airport, England, Britain UK

image from viewsbank.com

Perhaps the greatest area of concern for many people is that of immigration. On this one I’m probably of a different view to many, because I’m all in favour of open borders. In my idealistic world it would be possible for anyone to travel anywhere without hindrance, and it would be great to think that, one day in the future that might happen. I do accept that the world isn’t ideal, of course, and in reality controls are required, but free movement of goods, services and people within the EU seems to me to be a laudable objective. This doesn’t mean free access to all services the state provides, of course, and it’s here that the debate should focus in my view. David Cameron has already gained acknowledgement of this within Europe and the Government’s policy has for some time been aimed at limiting benefits for migrants.

There’s a well-proven economic case for such free movement. At a time when Western economies are facing the prospect of ageing populations as the 1950’s baby boomers’ move into retirement, we need younger workers to be able to grow. It’s also true that many new businesses are started by immigrants seeking a better life for their families. Ultimately the way to resolve the pressure of immigration is to help make the countries from which the people come to be stable and prosperous, and here the EU has a role.

If we were to exit the Union I really can’t see how things would change much on this front, either. A large proportion of immigrants are from non-EU countries already, and we couldn’t hope for much tighter controls whilst enjoying unfettered movement of our own goods, services and citizens. It’s folly to believe otherwise.

Change is already happening

There is evidence that the EU is already changing. Its politicians are getting the message that, right across Europe, there is disenchantment with its opaqueness and remoteness from the people whose lives it affects. The influx of smaller nations who have joined in recent years

Eu Flags

image from guardian.co.uk

aren’t interested in ever closer political union, they want better access to Europe’s markets, stability, and protection against aggressors, notably Russia. Britain, with its emphasis on defence (on which we spend more than most other Euro nations) and trade is seen as a strong and consistent voice with the scale and economic clout to be a positive leader in Europe. The very intensity of the UK Brexit debate has made politicians across Europe sit up and take notice. We aren’t the only ones who aren’t entirely happy, as evidenced by rising nationalistic voices in France, Germany, Spain, Italy and many other countries. Something must be done.

Agitate from within

I’ve always seen myself as something of a rebel. I’m all in favour of shaking things up and agitating for change. But I came to realise a long time ago that crusading through the streets holding placards and chanting slogans is nothing like as effective as being on the inside and influencing things with the people who hold the power. Attractive as it might feel to make a protest against Europe and ‘stand up for Britain,’ let’s not throw away years of negotiations and effort that could set us back 10 years or more and leave us with less influence and no real gains.

Instead, let’s create the necessary change from within with a strong voice and firm principles. Let’s stand up for Britain as a negotiating partner and not a truculent absentee.

In my humble opinion, a vote for Britain is a vote to Remain.

Andy Jervis

19-06-2016

How much money should I leave behind for my children?

 

This is a question that I was asked by a client recently, and as with many such questions, it’s a complex one to answer as it depends on your own personal views and values, as well as the personality and capabilities of the child.

When I thought about it further, I came to the conclusion that it’s actually the wrong question. You have no idea when you are going to die, what your future circumstances might be, how much wealth you may have, and what sort of person your child may grow into. I would therefore suggest that a much better question is to ask, “How can I prepare my child to make good decisions around money, to use it creatively and for the good of him or herself and society, and to avoid the bear traps and leeches that populate the financial world?”

There is plenty of evidence for the damaging effects that too much money too soon in life can wreak on young lives. Vorayud Yoovidhaya, the grandson of the founder of Red Bull was accused of the hit-and-run death of a police officer whilst driving his million-dollar Ferrari, and reportedly used his wealth to buy off the officer’s family and avoid prosecution. Brandon Davis, 32 year old oil heir and friend of Paris Hilton, is a regular in the tabloids for drug infringements and alleged nightclub brawls. Prince Pierre Casiraghi, son of Princess Caroline of Monaco, was accused of being “completely obnoxious”, insulting models and swigging from a $500 bottle of vodka after a brawl at a New York nightclub that left him in hospital. There are plenty of other examples.

 

For parents trying to deal with these excesses, views also vary. Gene Simmons, bass guitarist with American group KISS and reportedly worth $300 million, reportedly told CNBC “…in terms of an inheritance and stuff, (my kids are) gonna be taken care of, but they will never be rich off my money. Because every year they should be forced to get up out of bed, and go out and work and make their own way.”

 

Bill GatesMicrosoft founder Bill Gates feels similarly. He said “I didn’t think it was a good idea to give the money to my kids. That wouldn’t be good either for my kids or society.” Instead, he and his wife Melinda created the Bill and Melinda Gates Foundation in 1994, which today has assets of over $37 billion.

 

 

Movie star Jackie Chan does not plan to leave his millions to his son, Jaycee. He told a reporter “If he is capable, he can make his own money. If he is not, then he will just be wasting my money.” Contrast that approach with young Suri Cruise, daughter of Tom Cruise and Katie Holmes, who at the age of six reportedly had a three million-dollar wardrobe, and whose mother was apparently planning to surprise her daughter with an eight foot, $24,000 Grand Victorian Playhouse for Christmas, complete with running water, electricity, and extensive landscaping.
These are, of course, examples from the extreme end of the wealth spectrum. Nevertheless, the range of sentiments which are expressed can apply to all of us who have surplus funds that our children may one day inherit. So how do we prepare them for that day?

 

 

Inevitably, the good financial habits of children are likely to be built on the foundation of the practice of their parents. But sometimes, those habits aren’t always recognised.

 

I had a conversation with clients a few years ago when mother expressed a desire to give her three children a significant sum so that they could each buy their own homes. I asked her what was important about making this gift to her. She thought for a moment, and then told me that she didn’t want her children to struggle in the way that she and her husband had done over the years.

 

I reminded her of a previous conversation when we had explored her values in depth. At that time, she told me of her pride in achieving her financial success as a result of having to struggle and make good decisions in the tough times. This, she had said, had been the making of her.

 

I didn’t need to ask whether she wanted to take this away from her children. She saw the point immediately.

 

I quickly told her that I didn’t disagree at all with her giving money to her children – she could easily afford to do so – but she should firstly be clear about whether the children were ready to receive it.

 

George Kinder refers to these issues extensively in his book, ‘The Seven Stages of Money Maturity’. He describes the first two stages, Innocence and Pain, and explains how it is necessary as part of life’s journey to feel the pain before one can move onto the next stage, acquiring Knowledge. If the pain isn’t there, neither is the incentive to do the work necessary for personal growth.

 

Financial knowledge is essential on this journey. It is common for the very wealthy to enrol their children in financial education classes at an early age, enabling them to be equipped to deal with complex decisions around investment, accounting and trusts as well as to understand the role of philanthropy and community service in a well rounded financial life. It is a fact that the financial literacy of many young people leaving school today is extremely poor. Many have little idea about how a mortgage or credit card works, what the stock market does or how companies and governments operate. The child who understands these things early in life has a clear head start when it comes to understanding and dealing with his or her parents wealth.

 

Kids PiggyPerhaps the starting point for your child’s financial education is to revisit your own. Are your financial habits and attitudes appropriate and taking you where you want to go, or do you need some further coaching or education? Have you written down your own attitude to money, wealth creation, borrowing, saving and investing? When your child asks a financial question, are you able to give a rounded response?

 

Is money a problem for you, or is it the solution to a problem? How comfortable are you with your own wealth? If you have some issues in these areas, the chances are your child will grow up reflecting your views.

 

At Chesterton House we seek to work with our clients and their families to address these issues over time. If you don’t have a relationship with a financial planner who can assist you in this area, there are lots of financial information websites that are a good starting point. You need to make sure, though, that they aren’t just a cleverly dressed up sales message and that they are offering genuine education. Take your time to research and find a source of help that chimes with your own personal goals and values.

 

If you need any help on this topic, let me know. I’ll do what I can to point you in the right direction.