The cornerstone to economic prosperity is this: You can save some capital. Invest that capital. And make something of your life and legacy.

Running a night-trading desk in the global markets, we work with wholesale investors. Often, their story goes like this: Following years of hard work, some failures and false starts, they built a business. Sometimes there was a liquidity event when that business was sold.

Often, they invested in local rental property. There were some golden years. When the value still evident in New Zealand’s property market was being discovered. Then they enjoyed great capital gains. Nowadays, many of the properties seem a lot of work for weak yields.

Looking for more productive investment, they move to the sharemarket. Only to find the local NZX picked bare with a dearth of growth industries. Maybe they go a bit further with some mining shares on the ASX or beyond. These can be volatile.

That is where we come in. Finding the best value companies we can in global developed markets to build a portfolio for growth and income, while managing risk.

 

The biggest threat to wealth?

 

Investment creates prosperity. Consider that some of the most prosperous countries in the world are repositories and conduits for investment: Switzerland. Singapore. Jersey. The United States.

Here in New Zealand, as I outlined in my recent talk with Reality Check Radio, we too could be more of a safe haven for investment.

But our country is under threat.

I realised this most starkly when I attended a recent Free Speech Union event.

 

James Lindsay speaking with attendees at the 2022 AmericaFest.
Source: Gage Skidmore / Wikimedia Commons

I didn’t know much about Dr James Lindsay. So, it took me by surprise when the original event venue suddenly cancelled his talk, apparently because he wasn’t ‘inclusive’. The event had to be moved to another location almost an hour away.

The extra driving time (just after rush hour) proved to be well worth it. Others must have felt the same, as the conference room was packed with a few hundred people reflective of different age groups and ethnicities.

Listening intently, I struggled to understand what might be so controversial with Dr Lindsay that a North Shore venue felt compelled to cancel him.

But I did learn something that resonated intently. Referencing his recent speech to the EU parliament, he explained how Marxism has evolved to attack the West.

As the Auckland audience absorbed his message, there was a visceral sense of how vulnerable New Zealand has been to these attacks.

Lindsay explains that Marxism has failed to attack the economic success of the West.

Instead, it has evolved to target the sensitivities of the West.

 


 

A quick explanation of Marxism

 

Karl Marx believed that all societies progress through a class struggle. History is a series of conflicts between the bourgeoisie (capitalists) and the proletariat (workers). Since capitalism is inherently unstable, he believed the working class would eventually overthrow capitalism and establish a communist society.

To overthrow the oppressors, the workers must seize the means of production. Private property must be abolished. The oppressed must take control of the social space.

Well, according to Dr Lindsay, the Marxists have been unable to assail the capitalist structure of Western countries because it has worked so well.

Instead, they focus on finding oppressed groups in the social space to take control of that space economically and politically.

 

Socialist control in the name of ending oppression

 

Source: Rothmus / X

 

‘Woke is just another form of socialism,’ says Dr Lindsay.

Oppressed groups in Western societies are identified as racial or religious minorities, LGBT people, or politically dispossessed groups.

Oppressors are the traditional dominant culture; in particular white, conservative, Christian, or even Asian ‘white-adjacent’ people.

Once the oppression accusation is levelled, it then becomes possible to capture government and corporate bureaucracies. It only takes a few willing people in power to champion ‘DEI programmes’, ‘anti-bias training’, ‘critical race theory’, ‘gender ideology’ or any number of socialist interventions.

Those who oppose it, by definition, oppose inclusiveness. They must be denied or cancelled. Those who support it harness political and economic power.

Sadly, like most forms of socialism, it eventually destroys wealth.

Companies and the public service fail to hire the best people on merit. Their performance begins to languish.

Groups of entitlement begin to form. A rising political class looks for ways to fund their ever-growing entitlements. One day, it is unfit school lunches. The next, priority access to healthcare or research grants.

Soon, the tax base must be broadened. Those with existing capital must be taxed more heavily with capital gains taxes. Eventually, those with supernormal wealth must be taxed directly via wealth taxes.

In a decade — maybe less — you become Cuba with energy shortages and rolling blackouts. Since 2020, about 10% of the Cuban population has actually left.

 

Source: Michael A. Arouet / X

 

The socialist virus is deadly to wealth. Like all viruses, it continues to evolve to find weakness. Today, that weakness is the woke sensitivities of the West.

 

New Zealand’s wage and housing crisis

 

Over the last 25 years, housing affordability has fallen off a cliff.

When I grew up in the 1980s, my father could afford a comfortable home on his single salary while my mother stayed at home with us.

In 2000, when I bought my first home, it was only four times my individual income.

Today, a typical Auckland home will be nine times the average household income. The mortgage will span decades, often loaded on top of student loan repayments. Couples will both work and compete in the housing arms race. Or rent may take half your income.

For those with little access to the Bank of Mum and Dad and facing anaemic wage growth, it is no wonder that the easy promises of socialist control hold sway. After all, when you see inequity at every turn, woke becomes the moral answer.

So, at schools and on the campuses of universities, left-wing politicians are doing very well. When I listen to them speak, I hear the same old messages of victims and oppressors.

Is there an antidote to their destructive message?

We need to open up housing. And build an economy that attracts high-quality businesses. But we also need a government courageous enough to call out woke socialism and stop it in its tracks with direct interventions. This is what I’m seeing from the second Trump administration.

As they say: ‘Beware of an old man in a hurry.’

 

What can investors do to protect their wealth?

 

In investing, diversification provides protection. You can diversify your wealth into other countries. If the local economy stumbles and the currency weakens, you’ll have assets in stronger currencies.

Everyone in a free country still has sources of power:

 

1) Money

You can choose what you spend on and invest in. Don’t give your money to woke fund managers or woke causes.

 

2) Democracy

Vote wisely. In my opinion, most of the major political parties are compromised by woke people. Seek politicians and parties that understand the threat of Cultural Marxism.

 

3) Participate

You can take on roles of power, whether that is on local boards or committees or within political parties. Further, there is power in numbers. Join organisations and outlets that stand up for free speech and truth. I recommend the Free Speech Union and Reality Check Radio.

 

4) Speak out

When you are silent, other voices prevail. If you disagree with a perspective, say so respectfully and with reasoned explanation. Join Toastmasters to develop your public speaking skills. Build relationships with like-minded people so you have allies. And as Charlie Munger wisely pointed out — get toxic people and toxic activities out of your life.

 

If you’re a Wealth Morning reader, you’re probably a wealth maker. You’ve worked hard to get where you’ve got. And you don’t need me to tell you what is happening in our cherished country.

But hopefully this will give you some more understanding of the threats we face. And how to push back and protect yourself from them.

 

Regards,

Simon Angelo

Editor, Wealth Morning

(This article is the author’s personal opinion and commentary only. It is general in nature and should not be construed as any financial or investment advice. Please contact a licensed Financial Advice Provider to discuss your personal situation. Wealth Morning offers Managed Account Services for Wholesale or Eligible investors as defined in the Financial Markets Conduct Act 2013.)