mr money bags business cartoon (2)Our columnist Mr Money Bags, who has decades of experience in Finance, an MBA, an advanced diploma in Financial Planning and not to mention his super business skills, is here to give you, our lovely readers some valuable tips and advice on money business matters. He is forthright and can sometimes be stern when it comes to your cash, but when it comes to finance he really is the expert. Read on for your business and finance advice…

I guess the referendum should not be linked to business in isolation, but the government has actually made it so; therefore, I thought I will share some things that have come up in the media in the last two days.

At the moment, I am abroad and the hot topic for UK travellers is what’s going to happen next week. I have been keeping an eye on the papers, and I have also been undertaking my own research. I guess I am being a geek, but its part of my job as a Chartered adviser to be able to answer client enquires and not look dumb struck.

One of the first things I want to focus on is that nobody knows what is going to happen. I want to compare the referendum as the UK going into business in a new territory. Let’s think of it this way if you are new to business you are more likely to fail, but if you have an existing business and you change strategy the chances of failure are far less, and even if there is failure the impact is far less.

If you talk to business people, and especially change management consultants, they will tell you that change is constant, and sometimes it is needed. However, in the case of the referendum this will be a big change regardless of the whether we remain or leave. The U.K. is an established country, the fifth largest economy by some reports and as far as I can see we are independent; hence even if we do leave I do not foresee major issues because we are embedded within The EU, and changes will take many years to take us completely out of the EU.

The second thing I want to focus on is scaremongering by the government by throwing umpteen statistics at us the general public.

I am taking a punt on the EU referendum, and by this I mean that I have cashed in all my pension and investment funds. This is because I personally believe no matter if we vote in or out the markets are going to fall for a short time only. I therefore sold my stocks, when the price was at its highest in April and have been sitting on cash funds till the markets dip as low as I think they will go and then buy low.

The reason I did the above is because when you buy low, you get more units for your money, and when the markets grow guess what I have made a return. I am guessing I will return circa 10% or more on my money.

I read that the in campaign is saying £100 billion has left the stock market, well yes it would have done so. This is because investors hedge the market. This means they take a risk on some of the money, and speculate just like I am doing so. This does not mean the money has left the UK, but instead is most likely sat in cash.

Last week in the press there was talk of tax rises, quoting our chancellor “Far from freeing up money to spend on public services as the leave campaign would like you to believe, quitting the EU would mean less money,” Osborne said. “Billions less. It’s a lose-lose situation for British families and we shouldn’t risk it.”

Osbourne said he would have to:

Implement £15bn of tax rises, a 2p rise in the basic rate of income tax to 22%, a 3p rise in the higher rate to 43% plus a 5% rise in the inheritance tax rate to 45p

Increase in alcohol and petrol duties by 5%

Cause Spending cuts worth £15bn, including a 2% reduction for health, defence and education, equivalent to £2.5bn, £1.2bn, £1.15bn a year respectively

Make Larger cuts of 5% from policing, transport and local government budgets.

The above might happen, and it’s a big might. I say this because who knows what will happen, and because I personally do not believe such drastic action would be needed if we left the EU. This is because trade will still continue, we will all still be working, and still paying taxes. My personal view is things will stay as they are in the short term, and yes we might have to make changes but these changes could take upwards of ten years before they are implemented.

When the UK joined the EU it took time to implement changes anyhow, and I guess we took a risk. Also even if we leave, a fair amount of our laws are embedded from EU legislation; therefore, we still will use the same laws.

The other thing I wanted to say was the UK did not join the euro. Was this a good decision or a bad decision? Looking back whatever your thoughts are I think this was a bold move by the UK and one I do not think is regrettable.

Overall, I think Britain for once is finally on the map, and the whole of Europe is looking at us. I would encourage you all to read forums, look at the Internet and look at both arguments to stay in Europe and arguments to leave.

If we do vote to stay are things going to stay the same, or is Europe not going to take us seriously, and the annual farce of Mr Cameron trying to negotiate a better deal, which in my view never happens will this get us better rights etc?

If we leave will this force the EU to collapse, as we are one of the biggest countries within the EU? If the UK does leave, will it lead to other countries following us out?

Whichever way you vote I would encourage you all to take the vote seriously by undertaking your own research.

I leave you all with some words of thought from Margaret Thatcher relating to Europe, “It is frequently said to be unthinkable that Britain should leave the European Union. But the avoidance of thought about this is a poor substitute for judgement,” I guess this comment sums it up. We have to think, and make a sound informed decision about which way we are going to vote.