In today’s issue:

  • Are shareholder perks worth it?
  • Bags, cruises, cars and hotel stays
  • Your free Shareholder Perks e-book

[Ed. Note: While we all panic about Labour’s upcoming budget, my old friend Jasmine Birtles has found a way to harness gains you may already be entitled to. They’re inflation proof and tax free.]

I was asked to a roundtable event in the City a few weeks ago. The aim was to air views on how we could encourage more people to invest in shares.

It’s a regular occurrence in financial circles. A hand-wringing session about how little people in the UK are saving. But, even worse, how few are investing in any way other than their workplace pension.

“How can we encourage more people to invest in shares and build their wealth?” we all ask. My contribution is usually to explain how little… how very little… the average Brit understands about the stock market. Particularly compared to the average American. Waitresses, taxi-drivers and cleaners in the US invest in the stock market.

Here, it’s assumed that you need to be in the City and already a millionaire to dip your toes in the equity waters. The most “out there” idea most people are willing to consider on top of their savings is Premium Bonds. Shares are just plain scary.

Now, with the shadow of potentially huge increases to capital gains tax (CGT) over us, it’s perhaps not surprising that over 90% of the adult population is still not that keen on investing in the stock market. Even if they make a profit there’s now the fear that they won’t get to keep much of it.

Somehow, our panel got onto shareholder perks and how they’re a great incentive to get people investing. “I have clients who have shares in some companies just for the perks,” said one wealth manager. Who’d have thought?

It sounds mad – really letting the perks tail wag the investment dog – but it’s true. Some investors hold on to certain shares just for the extras they get with them. They really do act as loyalty points, keeping shareholders connected when they might otherwise ditch the stock.

I know one person who has shares in a particular cruise company simply because he gets a bunch of freebies and discounts to use when he’s on his next cruise. The trip costs him thousands, but with these discount vouchers he feels like a prince when he’s on board. The shares have done all right too.

To be fair, some of these perks are really worth having. If you were serious about it, you could check the list of companies that offer extras with ownership of their shares and organise your life around the goodies you can get “for free”.

You could wake up in the morning to a free hotel breakfast, climb into a hugely discounted new car, shop for discounted new clothes and then end your day by reading a heavily discounted book or, perhaps, buying a heavily discounted holiday.

While you’re at it, you could also be making money from the underlying investments at the same time!

Of course, perks really are nothing more than juicy extras you can get, like loyalty points, for investing in certain companies. It has to be direct investments with the companies too, as you don’t get the extras just by investing in funds that include those companies. The perks themselves shouldn’t really sway your investment decisions. The fundamentals need to be there first.

But it’s handy to know that, for example, you could get 35% discount on books by Bloomsbury Publishing if you own their stock, or 20% off food and drink at Mitchells & Butlers pubs if you own theirs.

You could also get 25% off posh handbags from Mulberry (I’m sorely tempted by that one), 50% off rack rates at Peel Hotels and some cool freebies onboard if you travel with Norwegian Cruise Line. And that’s just for starters.

There are also some pretty solid reasons why these shareholder perks are looking increasingly attractive. For a start, unlike dividends or growth, perks are guaranteed returns on your investment for the year that they are announced by the company. Also (and this is a big one) they’re tax-free, which is a serious bonus in these times of Labour government tax raids on investments.

Not only that, but they are inflation-proof as they give you discounts on goods or services that may or may not be going up in value, rather than giving you mere money – money that is now quite quickly being devalued.

In fact, the more I write about them, the more I realise that these “little” perks are rather bigger than even I realised. And so I’ve just written an e-book all about them called Secret Perks for Shareholders. It has a complete list of companies that offer shareholder perks in the UK – you’ll be surprised at some of them!

You can get a copy of this e-book for free on my website, MoneyMagpie.com. Just download the free e-book here.

As you do it you will also be signed up automatically to my free, fortnightly investing newsletter. That will send all the latest investing news and insights into your inbox every other Saturday. Don’t worry, though, you can unsubscribe at any time.

Until next time,

Jasmine Birtles
Founder and Director, Money Magpie