Author Archives: aje

Personal finance MOT


In a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.
“Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”
“I am helping to lay up food for the winter,” said the Ant, “and recommend you to do the same.”
“Why bother about winter?” said the Grasshopper; we have got plenty of food at present.” But the Ant went on its way and continued its toil.

When the winter came the Grasshopper had no food and found itself dying of hunger, while it saw the ants distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew: It is best to prepare for the days of necessity.


See Martin Wolf’s re-telling of the Ant and the Grasshopper as a modern fable here.

I endorse Chris Dillow’s four general principles of investing:

  1. Live within your means. The safest way to get rich is to save. How you invest your savings – cash, shares, gold, whatever – is a secondary consideration, unless you are really silly.
  2. Minimize taxes and charges. Most people can save tax-efficiently through ISAs and pensions, and should do so. Also, don’t be tempted by high-charging funds – they are usually not worth it. And if you hold shares directly, don’t trade much
  3. Remember that high prices, on average, mean low expected returns. Don’t jump on bandwagons
  4. Remember G.L.S Shackle’s words: “knowledge of the future is a contradiction in terms.” Don’t pretend you can see what’s coming. And don’t pay others in the belief that they can do so. The essential fact about the financial world is risk (and/or uncertainty). The key question is: what risks are you prepared to take, and which aren’t you? This paper by John Cochrane discusses this well.

Many people will say that they want to take more control over their current spending and future financial security, but often find it difficult to actually achieve this. I’m not wealthy, and am not promising you riches. All I can offer is a process by which you can gain a better understanding of your personal finances.

  1. You probably don’t have time to follow these steps now. So find a date a few weeks or months from now and put it in your diary. Don’t shift it. Treat this seriously. Do it when you have time.
  2. OK, let’s start properly. I want you to picture yourself at 65. Make it as vivid an image as possible – not so much what you look like, more where you are and what you’re doing (for more see Chapter 9 of this book). A large reason why people are careless with their financial situation, and undermine their future happiness, is because we’re conditioned to focus on immediate rewards. But we need to shift perspective and think about what actions your present self needs to take in order to make your future self happy. What resources do you need to deliver to your 65 year old self? Picture your children at 20. What do you want to be able to give them? Don’t adjust your future goals to meet your financial resources. Adjust your present behaviour to hit your targets.
  3. Practice self-control and delayed gratification. If you want to watch a movie, try waiting a few days. Treat it as a reward.
  4. Write up your Household Bills. There’s probably some categories that I’m missing out, and so use it as a basis. Check your direct debits to make sure there’s nothing that you’re regularly spending money on that isn’t being captured here. There will be lots of expenses that aren’t on this list (e.g. food, clothes, etc), but I find that if you try to be too exhaustive it becomes arbitrary. These are all essentials and are a lower bound of monthly outgoings.
  5. Get a good credit card. Make sure you pay it off each month but make sure you’re getting rewards for spending. An easy way is to link it with Airmiles.
  6. Go through your last 6 payslips and use your typical (i.e. not including bonuses) net (i.e. after tax) income. Unless bonuses are a significant part of your regular income treat them as a bonus and save them.
  7. Write up your Wealth.
  8. For advice on what type of pension, life insurance, savings vehicle are appropriate for you consult a professional financial advisor (this is helpful). If you don’t think it’s worth paying a few hundred quid to sort our your financial future you’re an idiot.
  9. It is really important to start saving early. “Someone who starts saving at the age of 21 and then stops at 30 will end up with a bigger pension pot than a saver who starts at 30 and puts money aside for the next 40 years until retiring at 70“. Also look at the calculators here.
  10. Have a look at the interest rates you’re paying. Make sure that you pay off your most expensive loans first (you don’t want the left column to outgrow the right column).


I don’t enjoy being asked to make donations to charity, and not solely because I’m a tight, selfish bastard. It’s because it’s a form of bullying – you are put under social pressure to make a quick decision. My response is to have an articulated approach to charitable donations, which serves as a defense mechanism and means I can avoid treating each request as something that requires my attention. I prefer to have a charity rule, rather than have to judge each request on its case-by-case merits. In a nutshell here it is:

charityPerhaps some points of explanation and elaboration are in order:

  1. I believe that the best way to help people out of poverty is through economic liberalisation. I find the empirical and theoretical evidence compelling, and devote my life to pursuing it. This sounds glib and self-satisfying but writing a book about the power of markets is my chief contribution. When my children ask my what I’ve done to make poverty history, my response is “public education”.
  2. Of course, I can do more. However I’m very concerned about inefficiencies within the charity sector. Since they exist largely outside the profit and loss framework that I deem to be the cause of the success of markets, it is to be expected that they are subject to bureaucratic inefficiencies. I suspect that the charities I’m most familiar with, are not necessarily the most important. I suspect that the causes that generate most media coverage, are not necessarily the most pressing. So I discount heavily charities that have good branding, good PR, and emotionally draining.
  3. I am not as skeptical of government-to-government foreign aid as most free market economists, because I believe that even with large scale bureaucratic inefficiencies the end result could still be beneficial. If for every £1 that gets sent abroad 50p is lost to bureaucracy, 25p goes to prop up a bad regime, and only 25p goes to intended recipients, that may be better than 0. But there’s important incentive effects that should be considered.
  4. As an alternative to foreign aid, I’m delighted that the practice of giving cash transfers is generating more coverage. The economic logic is simple, and it seems that it’s working. Yes, they may spend it on booze. But as Chris Blattman points out this pessimism and paternalism is pretty unfounded (do read that whole article). Other good articles on cash transfers are this one and this one.
  5. There are also important incentive effects with direct charitable giving. I don’t give money to beggars or homeless people. It’s not because I believe that they’re most likely to be under cover police officers. If there are rents, I expect rent-seeking. I expect beggars to invest resources to acquire primer begging locations. I don’t want to encourage self-mutilation. I assume that any dogs I see are borrowed or rented. I am tempted to give warm clothes or a cup of tea but find the costs involved are too high. I generally place more weight on the needs of starving people in underdeveloped countries than those where I live.
  6. I think it’s important to have direct debits to charities that you believe in. I set a percentage of my income that I feel is appropriate and split that between a few well known charities. One is focused on democracy and basic human rights. One is focused on humanitarian assistance and medical aid. If another charity wants me to contribute to them, they’ll need to convince me either that (i) they are more deserving than a charity I currently support; or (ii) I should increase the percentage of my income I assign to charitable giving. A Tithe requires 10%, but I already donate more than that to the UK government to administer charitable giving on my behalf. So I don’t give 10%. Less than that.
  7. I have an annual budget to use for sponsoring friends that ask for sponsorship. I don’t keep a close record but this generally means that if it’s someone dear to me I will sponsor. This is a nice way to ensure that I have a wider range of giving then if I chose the charity myself
  8. I never donate based on cold calling, be it at home or in the street. This is a rule and the more you encourage me to break it, the more resolute I will be. Don’t bully me
  9. Whenever I bet on beliefs I suggest to donate proceeds to charity.
  10. I regularly make donations of clothes, toys, DVDs etc to my favourite local charity shop.
  11. I try to tip generously, especially when abroad. In many countries the service providers you encounter – taxi drivers, waiting staff, housekeepers – will be on low incomes, and so it’s directed at deserving people. This is a nice way to administer cash transfers.
  12. I don’t wear ribbons and resist social media gimmicks. I find these expressive gestures to be hollow and that genuine charity should be private. Having said that, I’m aware of evidence to suggest that the more public people are about their charitable activity, the more it encourages other people. Hence I’ve written this post. Indeed just after writing it I went into town and would ordinarily buy a Starbucks coffee. Instead, I realised that I’ve fallen below my voluntary “Tithe” and set up a new Direct Debit.

If you’ve never given a cash transfer before, I recommend Here’s what I used to think of charity.

Decision making framework


The following is a great template for requesting decision rights within an organisation:

  1. Describe the authority that is being requested
  2. Provide a background and summary of the value proposition
  3. Outline the objective with the strategic fit
  4. Prepare an economic summary with the base case, as well as other plausible scenarios that could make the project much better or worse
  5. Identify they key value drivers
  6. Describe the key risks and mitigants
  7. List alternatives considered and why they’ve been ruled out
  8. Project the timeline for future steps

See Koch, C., 2015 Good Profit, Crown Business



In May 1997 I applied for the Everton managers job, and received a nice reply from Peter Johnson. Over the next few years I decided to apply to as many Premier League managers jobs as I could, and eventually built a collection of rejection letters. I rediscovered them in November 2015 and here they are:

I still live in hope.

Thesis supervision

This page is intended to provide information for students that are considering asking me to supervise their dissertation.


I think there are three ingredients for success:

(1) Choose an insightful research question in an interesting topic

You can see an overview of my research interests here. In addition the + questions from the Markets for Managers problem set could be a source of inspiration.

I consider the power of economic reasoning to stem from its applicability, and therefore take a broad and eclectic position of what would constitute suitable subject material. For a general management thesis I don’t require students to work on the same research topics that I do. Indeed, there are several topics that I have thoughts and ideas on that I’d be delighted to see students run with:

  • Whistleblowing
  • Adoption of internal prediction markets
  • The failure of entrepreneurship policy
  • Social entrepreneurship
  • Circular economy
  • The use of analytics in European football
  • The European football scouting industry

(2) Utilise the right methodological framework

Although I’ve created an online course on Analytics my methodological interests are in qualitative and comparative methods.

There are also a few techniques that I am willing to work with students interested in using, regardless of the topic

(3) Demonstrate competent project planning

This is crucial because it determined whether the experience is enjoyable or not. The following are necessary (but not sufficient) characteristics I would look for:

  • Enthusiasm for the research question
  • Genuine desire to have research published
  • Ability to self-motivate
  • Swift communication

Here’s a great template for writing a research article. Also see the list of “How to” on the right hand side of this website.

Baylor University research planner guide.


These are only general guidelines and there’ll always be a gap between my judgement and your understanding of my judgment. But just because the grading is subjective does not make it arbitrary. I will assign an A, B, C or D grade to the following dimensions:

  • Purpose – are the aims and objectives clearly set and have they been met?
  • Originality – is this new? Interesting?
  • Focus – is the work precise?
  • Literature review – is the thesis aware of and able to critically discuss existing literature?
  • Methodology – are the methods chosen appropriate?
  • Analysis – has the entire process been transparent and correctly interpreted?
  • Implications for management – does it have relevance to the professional community?
  • Quality of presentation – is it clear and does it add value to the written work?
  • Quality of written work – are there any errors?
  • Quality of communication with supervisor – were the expectations of the supervisor managed effectively? Was help asked for when necessary? Was it an enjoyable experience for all?

For more details on grade ranges see page 8 of my guide for students, however you should adjust the passing grades such that what I deem to be a C grade for a thesis would get a mark of 55-60; a B is 70-80 and an A is 85+.

My Guide to Travel


I make a solo trip around once a month and have created a set of routines that serve me well. I find travelling to be an important component of being an academic because it provides time and space to concentrate and reflect (i.e. travelling helps me to be a secular hermit). Some of the advice below is a little haphazard, but it’s a work in progress.

(1) Packing

For very short trips I’ll use a hold all but for anything more than 3 nights I’ll take my Rimowa Topas. This has the benefit of holding everything I need (i’ve used it for 2 week beach holidays) but small enough to fit as carry on if necessary. This can be handy if there’s a queue for bag drop but I prefer to check it. I’ve only ever had my suitcase go missing once and so I wouldn’t keep critical documents in it, but they are hassle to carry around with you (especially if you like to spend time at the airport). I very rarely clear customs before the bags are at reclaim so I don’t feel that checked baggage slows me down. And for connecting flights it makes things significantly easier.

If you’re going to a conference don’t forget:

  • Non iron shirts – not because you don’t need to iron them (you do), but because they take less time to iron than normal ones
  • Running shorts (for working in the hotel room, or running)
  • Swimming trunks (just in case)
  • A decent bar of soap
  • A bluetooth speaker
  • Tea bags (I used to hate green tea or fruit infusions but I take a stash of teach bags that don’t require milk)

I carry a charging station whenever I have a bag with me. The main items are a spare battery (handy for on the plane) and charging cables. This is all you need because usually there’ll be a USB socket in the back of the TV. However I love the design of the Mu classic and the phone charges much quicker from a wall socket. I tend to think that an adaptor is not worth the added hassle but perhaps Mu can change my mind. I also include a small torch for blackouts.

A good wash bag should be light and adapt to the contents. There’s no point having a bulky item of luggage that is only half full. I pack the following:

  • Toothbrush (don’t forget a cover).
  • Travel size toothpaste
  • Razor (you don’t need shaving foam/cream)
  • Indigestion tablets
  • Aspirin
  • Deodorant
  • After shave bullet (note I refer to is as an “after shave bullet” rather than a “perfume atomiser”)
  • Contact lenses – switching to daily disposable ones has made a big difference because you don’t need to pack contact lense solution, and can swim in them
  • Chewing gum/mints
  • Hand cream (that’s probably just me)
  • Cuff links

Note that all of these items are easy to duplicate. Therefore have them in your wash bag and keep them there. What is the point in using the same toothbrush, and having to remember to pack and unpack it before and after every trip? Duplicate!

(2) The airport

Yes, I know Tyler Cowen’s advice that if you’ve never missed a plane it means you’ve spent too much of your life at airports. But I do not understand this because time at an airport is highly productive. As Craig Mod says,

You are hacking the airport by arriving early, knowing that all the work you could have done at home — the emails or writing or photo editing — can be done at the airport.

I plan to arrive at least 2 hours before my flight, even if I’m checked in, have my boarding card, and taking carry on luggage. For most people 30 minutes at home is better than 30 minutes at an airport, but once you pass security anxiety drops. Those extra 30 minutes you could have spent at home are fraught because you need to remember to remember your passport; consider traffic; wonder about queues, etc. Once you’ve cleared security you can relax. I don’t use lounges and am perfectly happy to just buy a coffee, find a seat, put on earphones, and read a good book.

(3) The airplane

Try to stick to one airline. The benefits of a loyalty programme are worth being loyal for.

I need an aisle seat. Not just so that I can get to the toilet easily (which incentivises me to drink more water, which is good) but it also means that I can go for a walk to stretch my legs.

Obviously if you are in an aisle seat you should be sympathetic to letting people get out. I will sometimes try to sleep and have no problem at all with being woken. The problem I have is people who are constantly getting things from their bags.

What to wear on a flight:

  • A hoody is cosy and protects your head against unhygienic seats, but if you won’t wear it at your destination it is too cumbersome.
  • A gilet is a clever way to have small items like mints, earphones and a mobile phone close to hand whilst being seated – you can get them for < £20.
  • Avoid a cold/sore throat from the poor quality cabin air by wearing a lightweight neck warmer.

Embrace no wifi and read:

  • I like something light for takeoff and landing – The Economist, The Week, The Spectator, or New Statesman. Not a newspaper. Do not want newsprint on hands. In flight magazine usually worthwhile backup.
  • Then a book. If you like kindle fine but I don’t get it. Who reads so much that they can’t carry hard copies? I often read “big” books. But I won’t get through more than 2 on a trip, so they are not prohibitively cumbersome. Even on a 2 week holiday pre kids I would get through 3 or 4 books, but someone else would have one I wanted to read. Books are portable. Durable. Enchanting.
  • Or, I may be reading some academic articles. I can see the point of an e reader then because a stack of papers is heavy. But I like to take notes, and I enjoy the process of throwing away articles once I’ve read them. So even if your hand luggage is a burden on the outbound journey, it will be much lighter on the return.

(4) Hotels

Try to stick to one hotel chain. The benefits of a loyalty programme are worth being loyal for.

The mark of a good hotel room:

  • Electrical socket on the desk and on the bedside table
  • Black out curtains

In terms of security I bring a door stop with me and check for two way mirrors.11377275_10153538737846840_6984857104217500178_n

(5) Hospitality

I have a reputation for being demanding when I am a visiting lecturer but I am nothing compared to the amazing set of instructions that Richard Stallman sends his hosts. I have simple preferences (e.g. a working shower, mineral water) but put great weight on them being satisfied. One of my preferences is alone time. As Stallman says,

Many people assume that because I am traveling, I am having a vacation–that I have no other work to do, so I can spend the whole day speaking or meeting with people. Some hosts even feel that they ought to try to fill up my time as a matter of good hospitality. Alas, it’s not that way for me.

There are a few cities that I travel to frequently and will often try to spend time with friends. But there is an odd tendency from some cultures to feel obliged to “entertain” you, or to treat your whole schedule as theirs. If I’ve been in a classroom all day I may need the evenings to respond to emails and do other work. Learning that a mysterious person will be at my hotel room at 9pm to take me for dinner is my idea of hell.

When abroad I like to tip. Always leave a tip when you check out of a hotel room. If I’m not sure what an appropriate tip is I use the price of a pint of beer in local currency as a good benchmark.

Game practice

We think that games have an important place in cultivating good strategists, and that now more than ever games can give executives an edge over their competition.
Reeves and Wittenburg, Harvard Business Review

In addition to my online (and offline) course on Game Theory, I also offer students the opportunity to enjoy some “Game Practice”. Get in touch if you would like me to organise sessions of any of the following:

  • Carcassonne
  • Settlers of Catan
  • Dominion
  • Hive
  • Biblios
  • Risk

I also recommend Eleusis, which is a great game to understand inductive reasoning. And Tic-Tac-Toe is just fun!


rene magritte - empire of light_2

This is a complete list of the posts that appear on this website (drafts in bold). 


I don’t define a lifehack as a shortcut or “good idea”, but as when you productively use a tool for a task that it wasn’t intended to perform.

For example:

  • When you are at a picnic or the beach use a shoe as a drink holder
  • Use a latte spoon to dispense and spread mayonnaise from the jar
  • Use an empty complementary shampoo bottle from a hotel as a razor holder in the shower
  • Use a boot bag in the car boot to organise your emergency rain coats
  • Depending on your type of car, Vegemite jars can make excellent change holders for parking (use a Sharpie to write the currency on the lid)

in addition to the above, there are a few lifehacks that I’ve seen elsewhere and believe should be more widely known:

  • Use the USB slot of the TV in a hotel room to charge your phone, and avoid having to pack a cumbersome plug adaptor