Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
Why The UK Lags Other Countries As An Investment Opportunity with Andrew Craig
You can download your FREE report on how you can avoid financial mistakes as a dentist using the link just here >>> dentistswhoinvest.com/podcastreport
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Is the UK still a global investment powerhouse, or has it fallen behind? In this insightful episode, financial author and fund manager Andrew Craig uncovers the key reasons why the UK economy and stock market have underperformed in recent decades — and why that could be about to change.
UK GDP per capita has remained flat for 30 years, while countries such as Ireland, Singapore and Australia have more than doubled their wealth. Since 2007, the London Stock Exchange has lost half its listed companies, and major firms continue to seek listings abroad. Across the UK, even affluent high streets are struggling, with empty shops and declining footfall.
Yet Andrew reveals a surprising turnaround. Despite the gloom, UK value stocks have begun to outperform the S&P 500. Institutional investors are once again showing strong interest in British equities, driven by valuations that are up to 60 percent lower than their US counterparts. With sentiment shifting, the UK is now viewed as one of the best value markets globally.
We explore why less than five percent of UK adults invest through a stocks and shares ISA, despite historical data showing UK microcaps returned 16.4 percent annually between 1955 and 2021. Andrew outlines a straightforward strategy for building wealth, including the widely endorsed "100 minus your age" asset allocation rule, and explains how financial literacy can uplift not just individuals, but the economy as a whole.
This episode also examines what needs to change in government policy to restore the UK's investment appeal and whether the next bull market could emerge before broader economic recovery takes hold.
If you are a UK investor looking to understand current market dynamics, uncover long-term value opportunities, or improve your personal investment strategy, this episode is essential listening.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
The state of the UK and what it means for your investments is the topic of today's podcast, which is actually something we've never done on the Dentists Who Invest podcast before, and I don't quite know how, because it's been like four years. I have today joining me Mr Andrew Craig, author of how to Own the World and also financial is it fair to say financial commentary expert. Is that fair to say, andrew, because you do talk about that stuff a lot, right?
Andrew:That's very kind. Yeah, I guess, yeah, but I think a finance author is the number one thing, but also a fund manager and, as we were just talking about, before we click, record a YouTuber. We're now growing the YouTube channel quite nicely, which is good.
Dr James:Excellent. Well, listen, let's talk about the state of the UK, the state of the UK's current economy and how that pertains to our investments as well, because I know that that is something that you cover in how to own the world and actually this is something that I meant to ask you, so I'm glad that we've got this platform to be able to have this conversation on. I remember in your books correct me if I'm wrong there was a lot of points that you talked about the uk in your books and you were like the uk just shoots itself in the foot when it comes to the investment side of things. Right, and I can feel I could literally feel some of your. It was, it was a motive, right it was a motive, right you writing that?
Dr James:and I could tell when I was reading the book. Yeah. So I'm just curious, maybe just to set the stage. Why do we feel like that's the case? We can start out not so positive and then we can finish on a high right, yeah well, look it's.
Andrew:The uk is very interesting at the moment because, you know, without quite and let's be clear I don't want to get party political because I and I mean just to get that out of the way, straight out the gate I don't believe that there's any political party that I could in good faith give my vote to. That. I've seen in years, like in fact in most of my adult life, but you know, certainly since the late 90s until today, however long. That is because the basic economic illiteracy of demonstrably of you know, successive chancellors, all the way from Gordon Brown up to the present day, has been terrible and you know that's why a big part of the reason that you so. Uk GDP per capita today is basically roughly where it was 30 years ago. Right, it hasn't moved in 30 years. Right, and a lot of people lay that at the door of Brexit, which is very naive and basically doesn't acknowledge the fact that that's been a 30 year car crash and Brexit only happened, you know, nine years ago, whatever it is now, and in the same time, that we've basically made no progress at all in terms of the average wealth of people in this country. Tons of other countries in the world have done as good as double theirs, right? So Singapore, australia, ireland you know the Republic of Ireland, the other side of the border, from from where you grew up. You know ireland's now nearly twice as wealthy as as as britain on gbp capita. Australia. And obviously, you know america. Everybody knows about denmark. You know all these countries.
Andrew:So it it's um, it has been a source of frustration to me because I think the reason that britain has made such little progress has an enormous amount to do with terrible policy and really bad politicians, and particularly policy as it relates to financial markets and UK capital markets, and I think this is, you know, I wrote a piece a few months ago about how this stuff what really drove me nuts last year. Whoever, whichever political party you none of what I'm talking about right now was an electoral issue. So, basically, britain's really poor and going backwards, or it's flat at best, but realistically, in real time, it's probably going backwards. We had 3,250 companies listed on the London Stock Exchange a generation ago, like 2007-ish, not even a generation ago. Today, that number is less than 1700. And we've lost 90 in the last year or so, in about four or five in the last couple of weeks. Right, they are dropping like flies and I, you know, I think anybody who's really economically literate and understands these things which sadly, without wanting to sound like an ass, there aren't that many people in Britain at the moment moment who do, sadly it's a big part of our problem particularly our political class can can draw a straight line from that reality, from the fact that we've lost half of our stock market listed companies in like 30 years, to the reason why the british economy is in all sorts of trouble. You know, in our high streets are just sort of tumbleweed, you know, boarded up.
Andrew:I I live in what used to be a pretty affluent town in Hampshire, right Close to London, commutable distance out of London, in all the sort of league tables, you know, allegedly one of the nicest places to live in the UK, leafy green suburban. You know Hampshire, and it's like a ghost town, it's tumbleweed, and you know there's like charity shops and barbers and you know we all know vape shops and whatever else and that is replicated up and down the land and it's obviously something that's been in the press and you know. So I think the fact that we've sort of eviscerated the British stock market and there's a huge, the huge part of why that's happened has to do with really bad policy, which I don't want to bore people with, but it's kind of true and that is a huge part of that. British shares are a massive buy, like structurally right. Because stock markets start discounting, they start trying to basically start buying into an equity market quite a few years before the bottom. So even if, like the British economy in real terms, like Main Street Britain is going to be rubbish and just get worse more unemployment, more insolvencies you know I posted a piece yesterday about just how many pubs in the UK are going bankrupt right now because the Chancellor's changes she made in the budget last year.
Andrew:They've made 80% of pubs unprofitable structurally right. It's carnage, it's absolute carnage. Up and down the the budget last year, they've made 80 of pubs unprofitable structurally right. It's gonna, it's carnage, it's absolute carnage. Up and down the country, in in hospitality, you know, in in pubs in gp surgery season dentists, as I'm sure many of your, you know, I'm sure many of your audiences are feeling the pinch in terms of national insurance and all these taxes and everything else.
Andrew:Um, but actually, amazingly enough, uk value equities have now been outperforming the s&p for quite a few months. Um, and, interestingly, um so uh, there's a big investment bank lots of people have heard of. They used to be called merrill lynch until the global financial crisis when it merged with bank of america, so it's now Bank of America Securities, but one of the really big investment banks, like JP Morgan or Goldman Sachs or Morgan Stanley, and they do one of their big flagship things they do every month is the global fund manager survey. So they basically send a questionnaire out to like I don't know a thousand probably leading fund managers all over the world, in New York and Boston and LA and Singapore and Zurich and Geneva and London and whatever in Frankfurt, asking them for their views on capital markets. And then they pull that all together and it's a really good piece of research that's used a lot by the investment banking and fund management industries and it gives you a kind of steer on how people who control trillions of dollars are thinking about various different markets. Right, and here's a crazy fun fact for you.
Andrew:So, basically, for I think I'm right in saying for like 49 of the last 50 months, the london stock market has been the least loved of all developed world stock markets out of all of them for, like you know, five years, every month, right and um in in. It was either february or march. It was still the most unloved stock market in the world by, you know, people who control all the money, and so it was either last it was either april or may. Um, basically the point was it was the. It was the least loved in the world, and the following month it was number one. So in the biggest institutional survey of people who control all the trillions of dollars in big investment funds around the world, britain, the British stock market, has just swung from the most hated to the most loved. Now that might unwind in the next survey. It might be an ephemeral thing.
Andrew:There was a result of Trump's Liberation Day stuff and tariffs and, oh, hang on, look at the UK. That might actually be, you know, the dollars having a challenge, american equities are having a challenge, american bonds certainly are being challenged, and notwithstanding how bad our economy is in real terms, the other point is British shares are 60% cheaper than American shares across the piece. So big people who control, um, you know, big pots of capital will look at that and go enough is enough. Is Britain cheap enough? So? So that's a weird dynamic. So there's no, no question, the economy is terrible and it's likely to get worse, without question. I mean like it's going to get so much worse before it gets better in terms of unemployment and everything else.
Andrew:Um, and in numbers, number of companies going bust, number of our companies being acquired by overseas investors but that's like the old expression, you know, the time to buy a market is when there's blood in the streets, right, that probably makes britain quite an attractive investment, um, which is kind of crazy, right. And, and particularly smaller companies, because if, if, large britain, if the footsie 100 do really well in the next few years, based on the record of history and the way these things work, smaller companies will probably do very well. So, anyway, yeah, there you go. Sorry, my standard. What is that? Like a six or seven minute answer, sorry, mate that's what we want.
Dr James:We want full-bodied answers and that was that ticked the box, which great. And one thing that caught my ear when you were talking and this was quite one of the things you initially said you referenced policy and how policies. You know, certain policies are what we can point the finger at for the issues that you highlighted just there. Let's take to anybody who's listening we're not talking political here. We're not saying it was this party's fault or this party's fault. We're just speaking from the heart. Well, just to be clear it's both parties' fault.
Andrew:I mean, again, this makes me sound like I'm a Taurian. I'm not really. I'm actually a small government libertarian for what it's worth, and that electoral option is not available to me in this country or indeed most other countries, sadly, but I, indeed most other countries, um, sadly, but I I will say that I saw john major speak at a conference in london last year and he was unbelievably impressive, like he. It was funny because he presented and mark carney was the other presenter, who's now the you know, who was the bank of england governor and is now the prime minister of of um canada, as I'm sure you know.
Dr James:you'll be aware yeah, I did see that that was an odd little. I don't quite know how that happened, but very impressed, very good for in the pocket of the globalist, the davos massive.
Andrew:But. But all I'll say is I thought carney I hope he never sees this uh podcast I thought keep, but carney was deeply unimpressive and I I really did. And I thought john major was just wiped the floor with him and like like he's like 82 or something, and he was just fantastic and all I was going to say is so I then sort of John Major was talking about some of the achievements that they did in the early nineties and really, you know, coming out with all the problems around the exchange, you know the year, the genesis of the Euro and the exchange rate mechanism and Black Monday and all this stuff. A lot really tricky stuff happened on his watch and and actually he was sort of he was quite amusing, um, but his basic point was that he kind of left Tony Blair and Gordon Brown, a UK economy in 97 that was in about the best position it had been in for many, many years, after doing the hard work and taking the hard yards and taking a bunch of hard decisions. And I sort of thought about that and went and looked uh back at kind of that time and I think, to be fair to him. That was a fairly accurate you know he was probably the last British Prime Minister who actually did a pretty good job with the UK economy and with policy.
Andrew:Then Blair and Brown came in. And let's leave aside I think you know, because I posted about recently the. You know, gordon Brown sold our gold at, like, you know, not quite an all time low, but like just just, and I've written about it and it's just one of the most egregious cock ups. It's cost us by now about 40 billion, certainly dollars, possibly even pounds. You know, imagine if Rachel Reeves had 40 billion more quid right now. That would probably be a good thing. So that's, and it just the hubris of that man, of Gordon Brown, just blows my mind. Like you know, the Iron Chancellor I'm such a great Chancellor, you know so many decisions he made were awful and the other big one was. So they changed the tax treatment of dividends and I know this sounds so boring, right, but they made a number of changes to pension funds and how that all worked and it's a complicated line to draw and you have to have a really good understanding of institutional investment and stock markets and capital markets, investment and stock markets and capital markets. But if you do have that understanding, you can draw a fairly straight line between those decisions made in the late 90s to that point I made about Britain being fundamentally structurally poorer than all the other countries have become in that time, which is a fact, right, and to the fact that we've lost half of our stock market companies. To the fact that, you know, wise has just gone to New York or got left London, arm Holdings has left London. You know we've lost like 140 billion quid of British companies off the London stock market since Rachel Reeves came to power, right, and that that's just continuing the tragedy of the last few years.
Andrew:But and one of them they made a load of policy changes and the Tories compounded it over many years. But listen to this. So they changed the tax treatment of dividends, which doesn't sound like much right, sounds like, you know, pension funds can afford it for pension funds. Pension funds should be able to afford that. The estimate is that it basically raised about five billion quid a year of tax into the exchequer. But by now, a conservative estimate of what it has cost the British economy is well north of 500 billion pounds, so half a trillion quid. So these are the trade-offs these politicians make and they don't think about the law of unintended consequences, they don't think about the momentum. So if you do something that basically fundamentally challenges the effective functioning of the London Stock Exchange, the rot sets in and then hedge funds start shorting it, then the companies start leaving it and it's just this cascade of negative consequences which, 30 years later, is why we're in the pickle. We're in economically.
Andrew:And the thing that annoys me most about all of this is that I reckon if you did an exam of the 650 sitting MPs in parliament right now of all this stuff and indeed of how the bond market works and the relationship between the bond market, british government, borrowing, interest rates, inflation, I'd be amazed if 10 of them could pass that exam.
Andrew:Like I'm not. You know I'm sort of not pulling my punches because I'm just so consistently astonished at how bad our policy is. But you know, because we have a political class that just doesn't understand these things and that's why they make these terrible decisions. And if and the key thing I think, without wanting to do be too political is, what does that mean? It negatively impacts millions of people's lives and the quality of the society we live in, and I don't know what the answer to that is, but I'm just, I'm setting out the bad, as you said at the top of the call, like, let's, we'll do the bad news and then we'll. There is good news, there's countervailing good news, but yeah, we, britain, has just done an astonishing job at shooting ourselves in the foot on any number of levels, and particularly with respect to capital markets, in the last 30 years, and that is why we're so economically challenged, you know it's interesting, right, because this is something I wanted to ask.
Dr James:Maybe someone who has your sort of background and knowledge on this topic Correct me if I'm wrong. I mean, this is all I can't say, that I've looked into this, you know, and researched this, yeah, but am I right in saying you've got, obviously you've got Britain, and Britain is what like? If you look at GDP, you know what is it like? Seven to eight in the world, overall, something, yeah. And then you've got France is always below it, right, and the gap between France and Britain, yeah, they kind of swap a lot, they move, move around.
Andrew:Yeah, correct, but if I'm not wrong.
Dr James:Right, the gap between France and Britain has increased quite a bit in Britain's favor over the last few years, and maybe that's I could be wrong. We need to actually research this. Is that maybe because France is just not doing that well versus Britain doing exceptionally good? Something along those lines?
Andrew:I'll tell you what, given that we now have these amazing tools, why don't we say live, and in full effect who has higher GDP?
Dr James:We should research this the.
Andrew:UK. I think I'm actually not sure that's right. I think they're they're generally pretty close to each other. So, yeah, okay, april 2024 RMF estimate, uk 3.59 trillion, france 3.13 trillion. And then GDP per capita, though, which is ultimately the more important thing, yeah, I don't think it's quite as good as GDP per capita. Yeah, GDP per capita.
Andrew:I'll be interested in so yeah, okay, uk says um purchasing power parity, so adjusted for cost of living. They're identical. Amazing, where uk is 26th in the world, france is 27th, with like literally 100 bucks a year more than them, but but but that okay, so that's france, but okay, in the the last 30 years, denmark, holland, singapore, australia, america, ireland, south South Korea. I think I'm right in saying as well, um, the middle, all the, all the wealthy middle Eastern countries, so Abu Dhabi, qatar, uh, dubai. You know the list is long, but it's probably like 20 countries have sweden, there's another one have have seen their gdp per capita grow a great deal and britain's basically been stagnant. And actually the really shocking thing is that if you, off the top of my head, I think, if you take the top one percent of wealthiest people out of Britain which, by the way, is happening anyway, like you can take them out of Britain because they're all leaving Britain right now then the rest of the population, on average, has been going backwards. And if you take London out of the UK, outside of London, the economy is basically becoming a third world country. Outside of London, the economy is basically becoming a third world country.
Andrew:And so I think somebody was saying to me and I haven't fact checked this and I need to fact check this, but so Poland definitely has a higher GDP per capita than ex-London UK right now, and I think the Czech Republic does too, but somebody was telling me that Albania does, or that, or that albania's forecast to have a better. Now I'll take that with a pinch of salt, because I can't imagine it's that bad by now, but then again, so poland's basically had an economic miracle in the last decade, right, it's been on a massive tear, growth wise, and so to me it's like well, look around the world at the policies of the countries that are succeeding right and then emulate those policies. Don't look around the world at the policies of the countries that are falling apart and where everyone's getting poorer and emulate those. To me, that's just a no-brainer, and it just blows my mind that we don't seem to do that. So, anyway, this has become crazy stats but those, those are some crazy stats.
Dr James:But no, I do agree. It's like you know, you've got growth, but it's relative growth, right, which is just as important as in percentage, right, like, and if you've got all these countries that are doing extremely well, um, and britain is maybe not doing as well to that level, what can we learn, right?
Andrew:well, yeah, that that's right and actually the worst is yet to come, sadly, and again I I want to make that. I want to make a real point of the difference between main street and wall street is obviously in the american vernacular right. You know the real economy of of companies and jobs on the ground and and people just going about their daily lives, doing whatever they do, and financial markets and what the stock market in particular may or may not be doing. Because and the example I've come back to a lot on this because I think it's quite eye-opening for people is so one of the biggest rookie mistakes of people who really don't understand financial markets and amazing enough you see this from like supposed finance experts a lot on tv and stuff right talking heads is there's very, very little short or medium term relationship between the performance of the economy and the performance of the financial markets. And like a massive rookie mistake is to go oh, there's going to be a recession, therefore I should. You know the stock market's going to crash. Or you know there's been a big geopolitical issue like iran and israel and you know, therefore, the stock market's going to crash like 99 times out of 100. There's just no relationship there. There's a relationship over a very, very, very long run that takes years to play out right. So if there's a recession and equities are expensive, eventually you'll get a crash, but it'll take. It'll be years after the initial data point of the recession, and there's a really good example of that dynamic which tends to blow people's minds.
Andrew:So, ok, march 2020, you turn the TV on, what were you seeing? You're seeing people on ventilators. You're seeing people dying in China and in Italy and in America and in Britain, and you know everybody's out banging pots and clapping the NHS every Thursday evening. And and then right it was. It was almost like living through an actual horror movie, right, as we all remember it. Um, and lockdown something else. So so if in March 2020, when basically we were living through a horror movie, if you'd got out to the street and asked 100 people passers-by would you invest in the stock market today, what do you think their answer would have been?
Dr James:well, they all would have said no, but they should have said yes.
Andrew:Right, because that's I reckon, I reckon, empirically, I'd be amazed if it wasn't at least 95 percent that would have said are you kidding? Like of course you don't. You know we're in a COVID crisis, okay, so in, I got to get them the wrong way around. But it's something like in 2000, the US, the S&P 500 was plus 19%, 18.7% or something. And in 2021, sorry, in 2020, to be clear, not 2000,. In 2020, it was up like 18.7% or something like that. And in 2001, it was up like 26 something percent. Right, so in so so from in the in the 24 months after, during and after the arguably the biggest crisis since, like I don't know, the second world war or vietnam, or whatever you or whatever you decide it, it was the most recent one that was that bad, like x million people around the world being killed. Um, the US stock market had two of its best up years in like a century, right, and so that, and again, I'm telling you that 95% of people would not have benefited from that. And if you said to them in the height of the COVID crash do you think you should invest in stocks? They'd go no way. There's no way. I'm doing that and I, and I reckon that, as at this moment, right now, sitting here in june 2025. If you asked people the same, you know what did the stock market do incredibly well in the two years during and after covid. Still today, a huge percentage of population will say no, it must have crashed because actually relatively few people properly follow financial markets. I mean your audience. Do your audience probably have a decent idea of what the level of the s&p 500 is and what it's done in the last 10, 12, well, 20, 50, 100 years, right, 95 plus of british adults have no idea, like you know, literally actually, I as a as a funny aside, I, um, I was interviewing candidate when I used to work for swiss bank early in my career, in my sort of late 20s.
Andrew:Whatever I was interviewing, you know keen graduates coming in looking for a job, um at um at swiss bank, and one of the first questions my colleague asked um, this young graduate who is at cam Uni doing economics, and they said so, you've said in your application you're really interested in stock market, investment and stock markets. What's the level of the FTSE today? And this individual said 57,000. And we were like it's like anyway. Sorry, that was probably an amusing story for an ex-investment banker, but not for everyone else. It was just, like I just said, a level that the footsie had never been even vaguely near, or not even at that point 10 of that level. So we were like you can't be that interested in investment, but anyway that that. That anecdote is just kind of like and that's a cambridge economics graduate, you know, and the rest of the population I always go back to it like fewer than 5% of British adults have a stocks and shares ISA, and of that tiny minority, that is crazy, seriously it is.
Andrew:What? And you know, I know you're a fan of crypto, but you know more British adults have invested in crypto than have invested in the stocks and shares, isa and again.
Dr James:this is why, Even as a fan of crypto, I think that's actually bad. I think that's a bad thing.
Andrew:But why that's bad? I think it's really important to explain why that's bad, because when people invest in stock market businesses and again, this is really poorly understood and I get this trolling nonsense online all the time so when people invest in stock market listed companies, doing real things in the real economy, they do real things in the real economy. So, like you know, I floated, uh, carluccio's, the restaurant company in a in one of my jobs years ago, right, and we raised how many I can't remember what was it 26 million quid or whatever it was for carluccio's to roll out restaurants in the uk. So now there's a nice car, nice Carluccios in high streets here and there and shopping centers right, that's a real thing. That employs thousands of people, that gives somebody a nice option to go for casual dining if they fancy a plate of pasta and a glass of red or whatever. Right, real stuff in the real economy.
Andrew:And money that goes into an altcoin in particular, like we can argue about Bitcoin. Bitcoin has a sort of digital gold role to it, for sure, and I concede that, but most almost all of the. So what's so? Crypto is 3 trillion and Bitcoin is like 1.8 of that or something. Is that about right?
Dr James:Yeah, it fluctuates Bitcoin dominance. It can be 20% of the market, 70%, but anyway around that.
Andrew:Right, so let's just say like the crypto is worth three trillion of bitcoins, worth one and a half whatever the accurate numbers are like that, yeah that tells me the other one and a half trillion dollars.
Andrew:Almost all of that has been deployed in a non-productive way. It won't open a factory, it won't open a restaurant train, it won't buy any 737s for an airliner, you know it won't do any real world stuff and, if I'm honest, that really pisses me off. But as somebody used to work at the coalface of companies that do real stuff and employ people and pay taxes, right and so, and just quick, to sort of come back on that to my point about trolls, very few people understand, so lots of people come out and go. That's nonsense, because if you invest in shares like, you're just buying shares of somebody else who already owns the shares, the company doesn't get the money. And that is correct as far as it goes, because that's what's called the secondary market. Like most transactions in stocks and shares are secondary transactions. If you buy Apple stock today, you're buying that Apple stock out of the market from somebody else who owns apple stock. You're not giving apple like, if you buy a million quids worth of apple, your apple doesn't get a million quid, right, that's right.
Andrew:Except that the the existence of that secondary market is what enables companies to to have a primary market, which is when they either float on a stock exchange in an IPO and raise hundreds of millions of dollars to do whatever, or if there are lots of buyers of your stock in the secondary market, your share price will be higher, which means if you then need to sell a load of new shares and raise money, you do it with much less dilution. Or if you want to acquire another company and use your shares to acquire that company, you have a competitive advantage if your share price is higher. So a strong secondary market for shares which, by the way, london just simply does not have anymore, sadly, because of governments means that. So imagine now you're a British company and, on average, british shares traded at about a 60% discount to American shares at the moment. Right, and that means if you're a British management team and you want to buy like, say, you're an oil company and you want to acquire a small oil company in Africa or Asia or whatever, and so does an American oil company, and so does an American oil company the American oil company has to take 60% less of a punch in the face in terms of the dilution of their equity to use their shares to buy the company.
Andrew:So who do you think is going to succeed in buying that company the British company or the American company? British companies, like something like 350 billion quids worth of British companies, have now left the London Stock Exchange and gone to another stock exchange, like mainly America, but some have gone to Australia, and every time that happens, that takes huge amounts of wealth and intellectual property and employment away from the UK, which is something that's really really poorly understood. So, yeah, sorry, I'm slightly on my soapbox today, but it's I just think it's really important that more than 0.01 percent of the population understands this stuff, because, whilst nobody understands it, the government can get away with pretending there's no problem and talking about us being a tech superpower, which is just gibberish you know that stat about how few adults actually have stocks and shares.
Dr James:Isa blows my mind because on Denison Invest and I have to say right, and you know I'm definitely, I hope I don't, you know, come across like I'm saying I'm solely responsible for this. But I remember at the start when we made Denison Invest, you know I would talk to Dennis and they'd be like I don't, I've never heard of an ISA. You know what I mean, whereas it seems to me nowadays the dentists that I talked to on there.
Dr James:Most of them actually have, like isis, make maybe 50, 60 percent. Do you know what I mean? Yeah, um, so I guess the reason I'm telling that story is not to say, hey, look at me, or that's great, or whatever. It's more to say that I got the impression that a lot more people in the general population would have them as well. But obviously that's completely skewed, like it's just nuts.
Andrew:Well, I mean there's so much to say about the first thing to say is 19 million british adults are like as, as defined, definitionally financially challenged. So 19 million british adults, basically, are close to poverty, have no savings, you know. So none of them are going to get a nicer right or well. Unless they can get it, you know, chart a course back, but that's chicken and egg. You know. Why are so many people financially challenged? Because we're not creating any jobs. We're not, we can't. Nobody can raise money. Nobody can raise the hundreds of millions or tens of millions required to do something like open a restaurant group or a chain of cinemas or whatever. Our high streets are dying, so there are no jobs. There's much higher unemployment. Um, we've also got an aging population which factors into it. But the other thing I would say, so that that's great, and I think you should give yourself credit, because you know one of the things that will sort this country out is if 20 million more people sort out an isa, you know, and at least their their financial affairs. Right, but as is, because the other thing to say that's even more eye-watering is so fewer than 5% of British adults have an ISA, stocks and shares ISA. And let me come back to the difference in. Well, actually, let's do it now. So part of the reason.
Andrew:So I remember early on, when I published my book and started posting about stuff like this, somebody said to me oh, isas are rubbish, why would I ever invest in an ISA? I can only get 2% in an ISA, right, or whatever. And it's like they didn't know the difference between a cash ISA and a stocks and shares ISA, and so that's such a massive failure of our society. And, by the way, there's X hundred billion quid in cash ISAs, which, of course, guarantee that you're going to lose wealth because the return in the cash ISA is lower than real inflation, and so like how we can have a situation where you know, a disproportionate amount of people who do have ISAs have a cash ISA, which is a terrible product like. You should only ever use something like that for very short-term purposes, um, and and for longer term stuff, you must have stocks and shares or you'll just never become wealthy, right, right, but?
Andrew:But check this out the tiny minority of British adults that have a stocks and shares ISA. There's some extraordinary stat, no-transcript, right, so they have an ISA, but all they've done is own Tesla and Apple or Meta and like Microsoft or whatever Like. So most of that capital is now in big tech stocks, which is, or they're, in an S&P 500, which is much better, but it's still, you know, cash and crypto and in a holistic kind of top down. I understand all of them and I understand how to use them in the right mix. Based on my age and stage, I reckon it might not even be a hundred thousand people like seriously, and that is just that's why people are getting such bad outcomes financially. Right, let's just, and we're. You know our tax base is being eroded and the economy's screwed. So, yeah, that's why I get I know you do too but that's why I get quite passionate about this stuff and I love doing these podcasts no hell.
Dr James:Yeah, man, like it's when people can see the part like the emotive side is important too. Right, because people are like, right, there's something here like this guy cares, it can make a difference, he cares on our behalf. Therefore, we should up our game too. Can I just say one thing on what you were saying a second ago about the stocks and shares, isa. Uh, as in there's, it's one thing to have the isa right and then there's another thing entirely to know what actually goes in it right.
Dr James:Like, sometimes, very rarely this happens because naturally, when you're on dentistry invest, we talk about this stuff. You know what I mean and you get to speak to lots of dentists and I think that they they're quite happy to share this stuff with me because it kind of comes with the territory. They're kind of expecting to talk about that whenever they speak to me, whereas maybe it doesn't come up so much in normal conversation. But you know, it's interesting, right? Um, when we talk to the dentist or when I talk to dentists about the stocks and shares, I said, uh, some of them not that many, thankfully, but some of them are like, yeah, I got a stocks and shares. I said I just put the money in and it sits there right like they don't get that. You're actually supposed to invest in it, to do something with it.
Dr James:And then the ones, some that do and, by the way, I say this with compassion and I say this with love, right, because I'm saying this to let people know what's out there and how everybody else is doing, relatively speaking, the people that do, that's a very small portion to thankfully, maybe like 5% of people that have come across. The other 95% yeah, they have some form of portfolio. But if of people that have come across, the other 95, yeah, they have, they have some form of portfolio. But if I'm putting my financial planner hat on, even though I am a dentist and I'm not a financial planner, not an ifa, just making that super clear, but obviously from running our finance firm vader, let's just say you pick up a few things, yeah, and when I see their portfolios I would say virtually 90 of the time there's something to optimize there as in they've got like individual stocks that are just randomly there, that they've just stock picked, or maybe they've got way too much bonds relative to their goals and objectives.
Dr James:At their age, exactly At their age and there's always things to optimize. Do you know what I mean? And I would say it's probably 10% of the time that I speak to someone and they tell me about their ISA and I'm like yeah, you've actually got it figured out, Like you've got a good portfolio there.
Andrew:Basically, and appropriate for your age and your earnings and your risk inclinations and your dependence and all that Cause that's right. I mean, like in financial advice per se, you have to be incredibly careful about like one size fits all you know panacea, answers right. Incredibly careful about like one size fits all person. You know panacea, answers right. But if there is one you know idea on those lines that sort of works for everyone. Is that what I've talked about a lot? If I may oh, actually yeah, if I may just brandish so my first book you know how to own the world. I know most of your. They go. It's over my shoulder there, um, and then this one live on less invest.
Dr James:The rest is the is like, if you like, but how to own the world's, the. And then this one we just published Completely fine, shout out how To Own the World. I'm a big fan of how To Own the.
Andrew:World. Live On, less Invest. The Rest is like, if you like, but how To Own the World's the theory and that's the practice. For a British person, because it's aimed at the Brits, and that's the new version we just published in February, by the way.
Andrew:Oh, nice, Annoyingly the audio book is being held up in Amazon's process for weeks. So we published the print version in February and the ebook in February and the audio book's still not available, but hopefully it's dropping any day. But anyway, the reason I mentioned that is because one of the big themes in that book that wasn't in how to Own the World is this idea of a hundred minus your age, which is about as close as a sort of you know, shooting from the hip rule of thumb. That kind of works for everyone, because all that is is like and, by the way, it's not my idea and john bogle from vanguard, I think, was one of the first people to popularize that idea but it's basically just that if you think about investments that are aggressive, higher return, higher risk investments, like the stock market or certainly crypto, and then investments that are lower risk, defensive, but lower return, like cash or bonds and I was to say, like gold, you see gold's a weird one because I think it's defensive but it's outperforming the S and P for 25 years and my lane my next YouTube video is going to be about that. Yeah, it's up a thousand. So gold priced in pounds has gone from 220 pounds an ounce to 2,400 pounds an ounce in since, since, uh, you know, the beginning of the millennium, right? An ounce since the beginning of the millennium, right? That sounds bad? Yeah, correct. And so, actually, my next video series on YouTube I'm doing on gold. We just did five videos about property and these ones about gold.
Andrew:But the point I was going to make is, if you use the 100 minus your age, all it tells you is a basic rule of thumb 100 minus your age is subtract.
Andrew:Subtract your age from 100, gives you roughly how much you should be investing in aggressive, high-risk, high-return stuff. So if you're 30, you should be 70% in the stock market and 30% in cash, bonds, gold, and if you're 70, it should be the opposite of right round. And the reason for that I think I've said this to your audience before, but just to go into it again is because if you're 30 and you have a 50 stock market crash and you're completely in the stock market, you might have turned 10 grand into five grand and you've got the whole of the rest of your, because you've probably only got about 10 grand, you know. But if you're 60 and you've been a dentist for your whole career and you've got a million quid and you're 100% in the stock market. In the same scenario, 50% crash has turned your million quid into 500 grand, just when you're on the brink of retirement and it's like it's crazy how few people understand these nuances, but they're actually not very difficult.
Andrew:You know that 100 minus your age is simple. Then, well, you know. All you then need to understand is the difference between a defensive asset and aggressive asset, so that you can get that mix right and then just just invest every month, you know, for as long as you can, and you will get a fantastic outcome, like a life-changing outcome, and you know, the tragedy is that, as we're saying like I, probably 99 of british adults don't understand this stuff. That's just not so bad you know what?
Dr James:thank you for that? Uh, full-body dissection of what the Brits us Brits could be doing better. Right, how about some positive news now? What have we got to look forward to? There must be something good out there.
Andrew:So there you go. So I have this sort of you know for the beginner 100 minus your age, you're 25. So you're gonna be 75 in a big global equity index, right, um? And the answer to that is either s&p 500 or msci world or footsie, all world right. And basically, if you're a massive believer in american exceptionalism, america dominating, by all means have the s&p 500, but you get massive concentration risk in the mag 7 stocks and um I I just think that for the next 30 years a lot of value could come out of brazil or india or china or whatever. So I'd rather have the fo to your world.
Andrew:That's just my view, right yeah, and actually I think, I think on a 30-year view, the percentage, the difference in the percentage returns, those two things will be negligible because over time everything trends to just kind of global equity growth this, this whole sorry to jump in, you know this whole logic, the whole, the whole reddit logic.
Dr James:Uh, reddit the forum that we should all just stick all our money in the s&p. I don't think that's.
Andrew:That's just not true, man, like it's not on the time frames that we're talking about for retirement I mean, look, I think if you invest every month, uh, for 30 years, you can stick all your money into pretty much anything and you'll probably be okay as long as you have that weather on 100 minus your age. You have to be careful about about saying that. But because I had this the other day. I was presenting an event in London and somebody in the audience went because I was talking about the merits of global stock market investment and the fact that US equities have delivered more than 10% annualized for more than a century. And I was saying and the reason for that is there's no whiz bang, there's nothing more complicated than the human development, right, it's like there was no airline industry 100 years ago, or hardly any like now. There's a massive, you know multi-trillion dollar airline industry. You know drugs, uh, construction, retail, tourism, you know entertainment, gaming, like think of all the things that have happened in the last 100 years smartphones, well, you know internet, like that didn't exist 100 years ago. That, front and center, is why us equities have gone up 10 a year for 100 years. I mean, not in a straight line, but on average, right, and they were like, well, yeah, but um, it depends on where you start and draw the line from. Because what about the um, the great, you know, the great depression, and the famously I think I'm right saying the, the dow jones index of us stocks, which had a massive crash in 1929, right in the in the stock market crash, 29 didn't get back to the 1929 level until 1957 I think it was. It was either late, the late 50s or the early 60s, so it's like a whole generation.
Andrew:If you bought, if you just invested in 1929, the month before the crash, you were out of pocket and underwater for like 30 years, right. And so people who don't understand investment say, well, you know, stock market investment can be really risky. It's like no, because that's not what we're advocating people do. What we're advocating people do is they invest every month for 30 years, like from the minute that you know, from 30 to 60 or 35 to 65, or preferably from 20 to 65, because if you do it for 45 years you will be loaded. Right, if you do this big and of course somebody who bought does that after the 1929 crash, when the market plummeted, you bought it at a much, you bought it at a level that was much lower than the 1957 level, right, and you did that every month for the 30 years and you got dividends.
Andrew:And so that's the key thing to understand is the merits of just buying every month, getting the mix roughly right. Because, to your point, that Reddit point, if you just buy the S&P, well, first you're exposed to American exceptionalism and I think America's teeth are on the brink of having a massive financial bond crisis right Because of its debt situation. That's all part of this tariff stuff, so that could be really problematic for US equities structurally. And then you'd be bloody glad you've got Chinese or Brazilian or Indian or European equities, if that happens, right To hedge it out. Um but, um but the but. The other thing is that you need to have that mix of assets, because the point I was going to make is that reddit thing is sometimes called the market purist approach, the market purist which warren buffett advocates.
Andrew:It right so there's a guy called ed van thorpe, who's another brilliant billionaire, billionaire who invented options trading, basically in the 60s. He's another one who's like just buy the market, buy the market, buy the US market. Those guys are worth billions of dollars. And so the market purist approach is a really good approach for anybody who's very wealthy, because imagine if you are only worth 10 million quid they're billionaires. Imagine if you're worth 10 million quid. You know they're billionaires.
Andrew:Imagine if you're worth 10 million quid and you're 100% in the market and in a terrible, terrible two year you know, global financial crash, 07, 08, 09 or 99, 2000.com crash the market falls 50%. You've gone from 10 million to 5 million. Can you still eat food? Can you still buy clothes? Can you still pay for petrol? Can you still clothes? Can you still pay for petrol? Can you still travel? Can you still go on holiday? Yes, right. So any very wealthy person can afford to be a pure market purist and just buy the market.
Andrew:But anybody who, even somebody who's quite wealthy, like I just talked about somebody. You know a 60 year old dentist. He's got a million quid or 2 million quid in their pension if it's 100% in the S&P and the S&P has a 50% correction now they've got a million quid or half a million quid. That's a very different problem to somebody with 100 million quid who's now got 50 million quid. Right Like, in terms of the life outcome. So it's all really important.
Andrew:That's why you know you should never take financial advice from anyone who doesn't know a lot about your very personal circumstances, inclinations, attitudes to risk, because it's different. You know I always hate these, like you said, although I contributed to one for money week the other week, what would you do with 50 000 pounds? And I was like well, the first thing to say is that you know, if, if, if I had 50 000 pounds and I was a 30 year old multi multimillionaire who just sold his tech business, my answer would be completely different to if I was a 60 year old living in extreme poverty on a council estate in Glasgow. Right Like, what those two people should do with 50 grand is like night and day different. So you should never listen to anybody who just says on social media this is what you should do with 50 grand, because it's so important to consider personal circumstances. Anyway, I'm conscious, I'm just like rambling away about loads of different stuff.
Dr James:That was my fault. I pulled us away that time, Cause I I jumped in on the. S&p thing. We were, we were all about we were, we were in the process of talking about the positives.
Andrew:The positives, right, okay, so the positives. So there's this amazing stat which is that, back in the real economy, right, what I was talking about earlier, like people opening restaurants or doing whatever they're doing and in the old days in London, in Britain, we used to do that by raising money on the stock market. And in the very old days we used to do that by raising money in the Leeds stock market and the Bradford stock market and the Manchester stock market and the Glasgow stock market. And in the very old days we used to do that by raising money in the Leeds stock market and the Bradford stock market and the Manchester stock market and the Glasgow stock market before it centralised in London. And if you actually look at how magnificent that was as a technology, the technology of the stock market for, you know, the Bradford Chamber of Commerce or you know, for people building steel mills in Yorkshire or whatever, that's how it all worked right, and that's why Britain became very wealthy and great. Right, the fundamental technology of stock markets was absolutely instrumental for all of that, which is why it's such a shame we've dismantled it. But, as I said earlier, notwithstanding all of that bad news. So AIM, the alternative investment market, the London microcaps London small caps have had a terrible, terrible time for five years but they've just started bouncing really heavily in the last few weeks.
Andrew:This is my point earlier. It doesn't take much capital If people suddenly wake up and go, my God, like traders like to say, the cure for low prices is low prices Right. Or in the in the long run the stock market's a weighing machine. In the short run it's a voting machine, so ie, the fundamentals will out. So British shares are really cheap and some of them are really good and pay dividends and are actually growing. They are even if the British economy is so difficult and tricky. Some businesses are still doing really well right, because they're just that good, like I mean, look at something like Games Workshop. You know it makes little Dungeons and Dragons-led figures and Warhammer and all that. They're about to do a massive deal with somebody like Disney and make Warhammer into a movie with like Henry Cavill and you know, get on them Like a brilliant little niche company and get on them like a brilliant little niche company.
Andrew:But I just think that if Britain rediscovers its kind of investing zeitgeist and if older, wealthier people realize how well smaller companies can perform. So that's what I was going to say. So from 1955 to 2021, uk microcaps the smallest companies in the stock market delivered 16.4% growth annualized. 16.4%. That is enough to turn ISA investors into millionaires over like 10, 12 years, right, if you max your ISA.
Andrew:And we've lost sight of that. The government was about to say they've lost sight of it, but they probably never understood it in the first place because they know so little about capital markets and stock market investment. But you know, we've basically forced pension funds in the UK for 30 years to invest in overseas shares. We've exported one and a half trillion quid of our capital your capital, my capital, your dad's capital, everybody who's watching us capital. That's all gone to American companies to make tesla egregiously overvalued, right, um and uh, into bonds, like because that's supposed to be lower risk. But what that's done is destroyed our economy and, um, really challenged our ability for smaller companies to raise money, um, but, but.
Andrew:But you know, pendulums always swing back and I think there's half a chance that the market starts discounting UK domestic stocks. You know, I mean Rolls Royce has done unbelievably well, british banks have done unbelievably well in recent months and that might be the first swallow of summer. And then if the smaller companies catch a bid and people you know, if big US investors or Middle East investors jump on this bandwagon and see Britain, you might see British stocks doing really well for the next. So put it this way Everybody says to me why would you ever invest in British stocks? They're crap. I'm only going to ever invest in the S&P 500 because they're so much better quality. I'm only going to ever invest in the S&P 500 because they're so much better quality.
Andrew:Okay, you're looking at the rearview mirror and for the last 15 years that's been right, but that's precisely why it's probably not going to be right from the vantage point in 15 years from now. So yeah, and like global investors and hopefully smart domestic investors, will start buying into this theme some years before the economy itself actually recovers, which certainly won't happen under this Labour government. I don't think so that's going to be four years away from now. So by the time the economy itself recovers, the stock market will probably already be up 100%, because that's what happens every time. That's what happened in the 1970s will probably already be up 100%, because that's what happens every time. That's what happened in the 1970s.
Dr James:Well, it's a fundamental thesis of everything that we talk about. When it comes to investing, it's discount and premium, isn't it? You know it always returns to the mean, doesn't it? Or at least that's the idea. Andrew, I've got a fun question. I've got to ask you this. It just popped into my head if andrew craig was pm and andrew craig could come in and change some policies and make some shit happen, yeah, and it didn't even have to go through the commons, it was. It was executive, what would it be? What, what?
Andrew:does the?
Andrew:order um, so I think the the easiest way to answer that question is to look out at the rest of the world and at the countries that are wealthiest and highest growth and have the lowest crime rates and the best standard of livings. And then, right, and you know, the obvious ones are Switzerland, singapore, australia, particularly Right, and increasingly Argentina. So that gives you a clue, because Argentina has just had an economic miracle in the last two years or so, since mille got voted in. Who's this crazy right-wing libertarian slash and burn economist right, but, um, you know, I think I think we should. So there are loads of policies. The first thing I'd do is I'd sack 550 mps and have 100 mps instead. So, like there are 645 us congressmen for a population of 350 million, there are 650 MPs in Britain for a population of 65 million. Like, we have this ridiculously top heavy parliament full of really mediocre and competent people and with apologies to any MPs watching this because I know they're not all are, but a hell of a lot of them are demonstrably based on the evidence of what we I mean. Did you see that interview with that government minister yesterday about? Of what we I mean? Did you see that interview with that government minister yesterday about, who literally didn't know, didn't understand any of the points from her own statement. It's just like what In the private sector that person would be sacked like immediately. Anyway. But I would slash corporation tax to the lowest in the world Because, you know, look at Ireland.
Andrew:The Irish are three times as wealthy as we are, gdp per capita largely because of that policy and, as I wrote, I wrote in a piece that I submitted to the telegraph was published in the telegraph a few weeks ago. Um, so we, the uk, took corporation tax from 29 to 9 or 28 to 19 over five or six years, like 10, 12, 15 years ago, whatever it was. So the rate of tax went from 28% to 19%. What did the tax take? What happened to tax? How much tax Did the government take? Less tax at 19% or more tax at 19%?
Dr James:I'm sensing that what you're getting at is counterintuitive, so I'm gonna say it's good. It took more tax because it put the rates down right, it took 30 billion more quid right and similarly, when labor had the highest um was it was.
Andrew:I should know this, but it was like the. The highest rate of tax on like evil rich people was 50 percent and when it was cut to 45 percent, the tax take exploded. Right, and it's the same. Norway put a wealth tax on. They lost all their millionaires and billionaires and they lost out on hundreds of millions of dollars of tax revenue. And it's just like everybody knows.
Andrew:Anybody at vaguely economic literature, as a student of economic history, knows this stuff right, um, so so I would have much lower corporate tax rates that would engender. I would completely um sort out the uh, the uk financial um, capital markets, the stock market, because we, you know that is where entrepreneurs raise money to do stuff, and if you can't, if they can't do that, they leave, because it's like you probably know, 11 000, it's somewhere between 11,000 and 14,000 millionaires left Britain last year. Right, and they're the very wealthy people. They're not millionaires, because I mean, there's this nonsense. You hear where people go. Oh, there are 3 million millionaires in the UK. No, there aren't. There are 3 million properties valued at more than a million quid, a hell of a lot of which is covered by mortgage debt that's owed to the banks. It's not real wealth, right? And also, if everybody tried to sell those houses tomorrow, that money would evaporate immediately. I'm talking about real millionaires who've actually built businesses and made tens or hundreds of millions. Well, we've lost between 11,000 and 14,000 of them last year, right.
Andrew:And what I was going to say is, like a lot of people think that's because they're greedy asses. Actually, an awful lot of them. They're not that worried about their personal tax situation. Some of them are, but more of them, in my considered opinion, based on personal experience, the people I know are just so fed up with not being able to raise any money in London to do stuff Like you've got a biotech company that wants to try and cure cancer. You cannot raise money in London. You have to go to Boston, right? You know you're building a software company. Why is just left last week, armholding's left, you know? However, long ago, it's as much to do with that that people are leaving us to do with, you know, selfish personal tax concerns, right, and that's really poorly understood. So I'd ensure that we mitigate all of that.
Andrew:And and as I said in that telegraph article, like, my last line was something like um, yeah, the irony about labor's policies right now is that they have the biggest negative impact on the poorest in our society, right, and which is precisely who the labor party is supposed to represent. Um, and that's just true, like you know. Like rich people leave rich, or rich people are rich enough, that kind of it's annoying. They have to pay more tax, or you know, when pasta is 100 percent more expensive and eggs are 100 percent more expensive, that's slightly annoying for a rich person, it's seriously bad for a poor person, right, and that's inflation is what these, these policies create. You know, this is all created by and, to be clear, that was created by the tories that you know. Rishi sunak's eat, help out to eat out. 300 billion quid of nonsense on lockdowns, I mean, like that that was. But, but rachel reeves and kirsten were rapidly making it even worse, like at a very, very rapid pace. So, yeah, sorry, there you go.
Andrew:There's loads more I could say, you know, but I just think that Britain has so much. We've got some of the best science in the world, we've got some of the best media in the world, the best movie stars, the best writers, the best fashion designers, the best software programmers. You know I mean. So in in, in healthcare, in pharmaceuticals, britain has the best science in the world, but we lag america in terms of company formula formation of value creation by trillions of dollars, not billions of dollars, trillions of dollars, um, which really annoys me. And similarly like is it sir johnny ives, the guy who designed the iPod and was instrumental in designing the iPad and the iPhone? He was, like the chief product designer at Apple for like 30 years. British guy, like you know, created two very, very important for Apple, being a $3 trillion company. A British guy, and it's the same across, you know, almost every industry sector and all the best people leave because they can't do business in London anymore. Sorry, that was a very long one.
Dr James:Andrew for PM. It started here today on the podcast and the Dentistry Invest podcast. No, but I mean in all seriousness, I mean I don't really see how it can be a bad thing for any, you know, for the country in any way, if it's if they're enabled to, if companies are unable to raise capital a lot easier, I mean how can that be a bad thing for the individual or the state or anybody?
Andrew:well, and also, and also, the evidence is there that generally reducing tax rate increases the amount of tax the government has, like in a big way. Like I'm telling you, 30 billion quid. I can't remember, I think it was basically corporation tax. When corporation tax rate was 28 was like 30 billion pounds a year, and when it was 19 it was 60 billion pounds a year. Right, anybody who doesn't understand that doesn't take advantage of that is really stupid, right, because that's 30 billion more quid for the NHS and for pensions and it's like absolutely insane that we wouldn't do that, right, and you know, that's why now the British government, we're going to have a bond crisis, because if you don't get the money from, if you have the policies we have right now, you don't raise enough money from tax, then you have to raise money by selling gilts, by selling bonds, right, and if the global market doesn't want to buy your bonds, you have interest rates go up, which kills everyone, kills mortgages, makes, you know, everybody's rent and mortgage more expensive, um, makes more companies leave. I mean, it's a death spiral, um, and we're. Our interest rate bill now on UK gilts is something like 100 billion quid a year. We could get rid of that in four or five years if corporation tax was at 12% or 15%. Seriously, look at Ireland, look at Singapore. And, by the way, just whilst we're on this subject, the pushback you often get about this, which I've dealt with in other podcasts and I want to deal with again, is ah, but what about scandinavia? You know what about norway, sweden and um, and denmark and finland, right and. But I used to work for a swedish investment bank, right, um? And I've spent an awful lot of time thinking about and working with thinking about scandinavia and working with scandinavian companies and Scandinavian people. And what people fail to understand is that's a really, really bad example of socialism in inverted commas working and the reason that.
Andrew:There are a number of reasons, that the main one is because Scandinavia has unbelievably high per capita resource endowments. So basically, they have loads of raw materials, loads of timber, loads of uranium, of uranium, zinc, you know all sorts of stuff, and obviously fish was slightly more women we have that too, but so so you're taking a huge amount of very valuable resource. Norway has all that oil. I mean, norway's basically got more oil than we do because of our stupid policies. By the way, we're buying our, our energy back from norway and we've got it. If we were allowed to get out of the sea like Norway is, we could just have it ourselves.
Andrew:But you know, I think the population in Norway is like 7 or 8 million people, so you've basically got the same oil wealth that Britain had over 65 million people carried over 7 million people. All of Norway's electricity is produced by hydroelectric power, so they basically have free electricity for the whole country, which is obviously very different to us. And then so Scandinavia can afford a really really big, expensive welfare state because they've got such a huge resource endowment and plus the fact that Sweden, for example, in the Second World War was neutral. So all of the wealthy Swedes had years where. So at the end of the Second World War, broadly, the infrastructure in Norway and Sweden was not like you know, that did not look like Berlin or London, like right.
Andrew:They still had their trains, they still had their ports, they still had their water, so so actually, and at the turn after the second war, sweden was basically one of the very richest countries in the world in terms of gdp per capita, because of alfred nobel, the nobel prize, the wallenberg family, you know, sweden being one of the earliest countries to industrialize and have amazing, you know, products and engineering and car, volvo and all this stuff.
Andrew:Um, and singapore was about the same level of wealth as a sub-Saharan African country, and so was South Korea, and so was Taiwan. And then if you look at the respective growth rates of low-tax Singapore and high-tax Sweden, in the time since the low-tax countries have absolutely destroyed their growth rates, right, sweden has gone from like $10,000 per capita to $90,000 per capita. Those countries come from four or $500 to the same. So that tells you all you need to know about what the right policies are. So, anyway, I get on my high horse about that, because I'm so fed up of the total failure to understand the special case that is Scandinavia in this debate.
Dr James:Boom, well, well, listen. Thank you for sharing all of that today on the podcast. Andrew, you've got a. You've got your youtube. That's where you're putting out a lot of content these days. What's that called?
Andrew:yeah, so it's plain english finance and andrew craig. Basically, if you go, if you search that on youtube, you should find it. Um, we've just gone. We went. We're about 10 100 subscribers. We went through 10 000 like a few days ago.
Andrew:Um, and, yeah, I'm doing 12 ish minute long topical videos, um, which, by the way, are much they are much less ranty about political stuff, um, and much more like educational, about like, this is how you can do the best with your finances and for what it's worth. Um, there'll definitely be some ranty political stuff up there at some point, but in the meantime, it's it's basically a free course in effective financial literacy for people, and there are now, I think, 41 or 42 videos on there. Going through, you know everything we've talked about and lots more. So, yeah, check that out please, because, um, it's free and people seem to like it and we need to grow it and I mean, look, we need to get several million more british people to understand this stuff, and then britain would be a much better place across the piece. So that's my crusade.
