Financial Independence….selfish?

I stumbled across this peach of an article on the McTorygraph a few days ago.  In short – an over paid ‘celebrity’ complaining about the ‘mansion tax’.

I can only assume that Cheryl Cole is a comic genius.


“I’ve always been Labour all my life but I want to hear what they’ve got to say for myself. Now that I’m a mature woman.
“I feel like a greater responsibility now to vote for who runs our country. And I pay a f—ing lot of tax. So I think that I need to have a really well-informed, well-educated opinion.”

It’s almost as if someone would view politics and policies with only their own personal interests in mind.  Grow up with less money – complain about the 1% and be of the opinion that they should be fleeced with tax.  Get some money – complain about the type of taxes you until recently believed in.
And another cracker;
“There are big downsides that come with having money. As many as with not having money. I mean, they’re different types of stresses, but they’re both stresses.”
Probably not, Cherly, probably not.
Self interest, the budget and personal finance
You don’t have to look far to find comments in various places around the web on the recent budget and the help to buy ISA, that are similar in self interest.  They tend to be of the form;
I saved for a deposit myself, so why should I now help someone else with my taxes”
“This is great, I am saving for a house and this will help me
I suppose we are all guilty of the type of behavior that dear old Cheryl exhibited, in fact seeking Financial Independence may even strengthen this type of selfish outlook.  After all we want great returns, a great wage, low charges and then the world to continue to tick on after we take our leave from The Man.
I do try my best to view things with ‘the bigger picture’ in mind, that said I’m not going to purposely pay more taxes that I have to.  We need to be careful that chasing the best returns and tax efficiencies doesn’t turn us into assholes willing to leave a decrepit world behind, as long as we have ourselves achieved our own goal.  Cerridwen over at keeper of the cauldron wrote something similar and much better than this ill-conceived rant 🙂
I do write this with the proverbial pinch of salt, as I think that if anyone is trying to rearrange their life in order to achieve Financial Independence they are probably not chewing through goods at an alarming rate like some Consumer Zombie.  Their life has probably improved for the better anyway.  
We are without a doubt plowing into a period of substantial change in the retirement and investing industry and we would do well to consider the changes from a longer term perspective, rather than the immediate impact on ourselves and only ourselves.  
Still… the tax free income, increase in ISA allowance and personal allowance won’t go amiss for me.
Spend Less, Save More & Escape the Horde
Mr Z

15 thoughts on “Financial Independence….selfish?

  1. weenie

    I have to say that I'm selfishly not really bothered about how the budget affects others, I'm only concerned about how it affects me.

    Mansion tax? Doesn't bother me either way if it's charged or not, not that I'm likely to ever be in a situation to pay it!

    Help to Buy ISAs for first time buyers? A good idea but I don't qualify for one so not really bothered about it.

    £1M lifetime pension allowance? Yeah, I wish!

    £1000 tax free interest and bigger personal allowance made it a happy budget for me and that's all I'm really bothered about! 🙂

    Reply
  2. Dividend Drive

    I wonder whether you think the self-interest reading of the budget reduces over time? Obviously, when you're first hearing the various bits and pieces being outlined in the budget you tend to pick up on those that most affect you (positively or negatively). Like Weenie I only at first picked up on the bigger items that affected me.

    However, perhaps over time the full implications become more apparent and you start to think more about others and how you relate to them? I have found this myself.

    After all, you can't analyse the whole budget for everyone on the first hearing!

    I think you're right that financial independence can lead to some financial selfishness. However, I think it is more financial self-awareness (i.e. you have a heightened recognition of how such budget changes can affect you) that appears rather than is selfish.

    There is a danger I think when you become financially independent to see any threat to your money as a threat to yourself. But taxes are not punishments (and should not be seen as such).

    A couple of articles by other FI writers recently are interesting along these lines.

    No More Waffles wrote on why you should enjoy paying tax which was very interesting (http://bit.ly/1ENMYJG).

    First Quarter Finance wrote on the fact that frugality (and FI) does not mean not giving generously to charity (http://bit.ly/1CDNvjO). By extension, generosity could be extended to your obligations as a tax payer (a bit!).

    It is extremely hard, however, to have any sympathy for Cheryl's position. I read her statements in the Independent. They did make me laugh.

    Thanks for the really interesting post!

    Reply
  3. Cerridwen

    This is a great post Mr Z and thanks so much for the mention.

    I tend to judge the budget changes from the point of view of whether or not they are likely to move things nearer to, or further from, the kind of society that I want to live in (and my kids behind me). The old fashioned concept of "fairness" is also pretty important to me, more so than personal profit (I know that sounds sanctimonious but I honestly mean it).

    Fairness, "social responsibility" and the recognition of the fact that we all do better and feel happier in a supportive society are the cornerstone of civilization – taxes are what we pay to prove that we take that on board.

    On the other hand I don't think there is anything wrong with looking after our money, although I am beginning to think that some tax advantages, especially around pensions and mortgage interest tax relief for buy to lets, "advantage" certain sections of society (e.g. higher rate tax payers and second house owners) past the point of being fair.

    A tricky, but fascinating, subject and I don't think there are any easy answers because there is bound to be some tension here for anyone trying to get to FI as quickly as possible.

    Reply
  4. ermine

    A couple of centuries ago one of our colonies revolted shouting something like no taxation without representation. The way the personal allowance is being lifted, which doing me good, kind of makes me wonder if at some point the converse is going to be needed – else we'll all vote for stupid things because somebody else carries the cost. At least the taxation otherwise known as NI still keeps more people in the loop.

    The mansion tax is a proxy for property taxes in general (we already have one, the council tax) – that sort of thing slaughters early retirees in particular. So I'm with Cheryl there but for different reasons. In many ways the problem in Britain is the anomalous lack of capital gains tax on the main residence. Stamp Duty is a vague proxy for that, but CGT would be a more aggressive brake on house price inflation.

    I know I shouldn't, but you missed a picture opportunity to brighten up the post 😉

    Reply
  5. ermine

    I'm saying nothing 😉 Shame she sounds so dreadful – the makers of AutoTune have a lot to answer for!

    Now I've read the article FZ linked, I both regret the five minutes of my time it took but am strangely intrigued by the alternative universe it conjures up. Y'know, the stress of having too much money. I guess choosing one's yacht is sooooo stressful, dahlink. One has to set up one's own political party too. Cheryl's Yacht party, maybe. Sheesh.

    Reply
  6. Theres Value

    guwon pet se'up yerohn perli'ical par'ee, arl voht fer'yer, shoor ar will y'knooh.

    I'm with Cerridwen on this one, as I tend to look at the budget changes as how they will affect a wide variety of people, especially those on lower incomes.

    Some people might consider aiming for FI as a very selfish act (I bet my sister would), but these people are sadly also often the ones that carry what I call 'an impoverished mindset'. What is that? They are often downtrodden, they are sometimes the type of people who blame others for their life situation, and weirdly they are also the very same people who love buying lottery tickets.

    I personally think it depends on why you are trying to achieve FI, I don't think many of us are the lazy type, given our efforts to to live below our means, work hard, and earn money, even extra money by taking on side hustles. And even if someone is trying to achieve FI because they want to float around the world and do nothing for the rest of their life, I still think it might work out nicely, because they'll maybe see other cultures, and hopefully come across something that'll blow their mind right open…

    Reply
  7. Mr Zombie

    Haha, I know what you mean. Mansion tax is probably a "nice" problem to have really.

    I think that in time the £1m limit could be a problem, I think that there will be a generation of learning, then as people start to save more earlier, the £1m limit won't seem all that big…possibly. It is inflation linked after a point I think.

    Yeah the £1,000 tax free interest is nice (the cynic in me would say that they are trying to keep money out of ISAs so they can tax it later…but that is mighty suspicious, even for a zombie)

    Reply
  8. Mr Zombie

    Hi DD, thanks for your thoughts.

    Yeah I suppose it is human nature to pick up on the parts of a story/news that effect us first. Otherwise it is potentially of little interest!

    It just occured to me that in saving for FI my only consideration was myself. But on the flip side, moving away from mindless consumption and energy use can only be a positive thing. (Although who knows what impact that would actually have on the markets in the long term a big section of society moved in this direction)

    I read NMWs article – very interesting esp from someone so young. And he's right, it is a privilege (to an extent as paying for inefficiency is annoying!)

    Will have a read of FQF's post 🙂

    Thanks

    Reply
  9. Mr Zombie

    No worries, it was your article that set off the neurons in my wee brain 🙂

    I also try to view budget changes from that perspective, as hard as it can be sometimes. I sometimes struggle with the blunt approach of tax the 'rich' just on the basis that they have more. After all it would be heart breaking to save your whole life and build up what would be considered a substantial pot only to have it raided because you are considered rich. That said, there must be a limit where wealth and income starts to become excessive. Still, just being in a society where saving for financial independence is possible is a pretty good place to be!

    I agree with your last point 100% 🙂

    Reply
  10. Mr Zombie

    People in general seem to want all the benefit, without paying any tax for it. Although sometimes you do look at the inefficiencies that seem inherent in all things public and it makes you wonder…

    The lack of capital gains tax on the primary residence and IHT are two things I struggle with. I am really surprised by the lack of CGT and I think that IHT could be a good way to re distribute wealth.

    "Now I've read the article FZ linked, I both regret the five minutes of my time it took but am strangely intrigued by the alternative universe it conjures up" – haha exactly how I felt. As if part of my soul had died a little.

    Reply
  11. Mr Zombie

    Haha, guwon pet. The party slogan.

    "They are often downtrodden, they are sometimes the type of people who blame others for their life situatio" – I don't get this. Opportunity is every to do something (and to complain as well I guess).

    I do wonder how many would achieve FI and then just collapse in a heap and watch Jeremy Kyle. Not many (at least after the first couple of months) I would guess.

    Spending three months a year in the Far East across winter. Yes please

    Reply
  12. Dividend Drive

    Thanks for the reply.

    I know what you mean about the shift from mindless consumption. I have an article largely written on "symmetrical saving" (e.g. saving on alcohol and investing it in drinks companies) as a method of motivation and thought much the same. If everyone did it more money would be being invested in the company than paid to them in revenue!

    Reply
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