Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
An account already exists for this email address, please log in.
Why bankers can’t afford boats any more
Bankers might still be getting bonuses, but it’s not like the old days. They and their industry are being eclipsed by a whole new breed of entrepreneur.
I had chat with a boat broker friend in Cornwall this week. We were cruising round the harbour playing a fun game whereby he pointed at boats and I got to guess how much he had sold them for. I wasn't bad at it.
The interesting thing was not necessarily the price of the boats, but who had bought them. He was irritatingly discreet about his clients, but he did say that City people don't buy many boats the City is "not where the money is".
These days, he says, good bankers might still be getting good bonuses, but overall not many are making the serious lump sums needed to buy, moor and maintain a £1m boat. You need proper entrepreneurs for that.
Start your trial of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Read this week's magazine and you might be tempted to think that's a trend likely to continue. On the funds page, we look at two things that make the point nicely. Hector Reid looks at the "cut throat price war" in the index tracker sector you can now buy Blackrock's UK Equity Tracker for a mere 0.07%. That's the kind of price competition that has to hit margins in the end (I refer you to the supermarkets).
Then on the next page along, Matthew Lynn looks at what he sees as the "biggest threat to the City" crowdfunding. In the US, he says, it "won't be long before more money is raised for new companies from crowdfunding sites than from traditional venture capital sources". Wow. Crowdfunding is taking over the original point of the City to efficiently allocate capital. Lynn's column is jammed full of insight a must read.
If you then want to know how to get a piece of this trend towards alternative finance, you can turn to David C Stevenson's thoughts also in this week's magazine. He looks at the funds working in peer-to-peer lending that we can all invest in. P2P is different to crowdfunding (it is debt, not equity) but given that Lynn reckons there will be "very little" left of the City in a few years, MoneyWeek readers wanting to invest might want to take a look at them too.
They may well be lending the money to the next generation of boat buyers.
Explore More
Sign up for MoneyWeek's newsletters
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
