It’s always worse than you think!

 

I asked Gemini how we value women’s rugby. Could it justify the bold claim from the pension company Royal London that women’s rugby is “the most attractive investment opportunity in rugby”?

 

Google’s software provided a couple of ways that women’s rugby could be valued. The first was a traditional valuation.

 

The second was something called “Social Return on Investment” (SROI). Apparently, valuing women’s rugby monetarily requires moving beyond traditional “male-model” sports accounting. No really — this is what was actually written on screen in front of me.

What I discovered is the kind of phenomenon that’s only possible when you’ve got a tremendous amount of other people’s money — and no shame about spending it. In Bill Sweeney, the RFU have just the man.

 

You’re probably wondering what the male model of sports accounting is — and surprised that accounting was even gendered. I certainly was. Apparently the “male model” is the outdated idea that a sport’s value is measured by things like sponsorship, ticket sales and broadcast revenue. It turns out what women’s rugby actually needs is a new accounting standard called Social Return on Investment (SROI).

 

To understand the roots of this idea you have to go to the place that invents these “new frameworks”: academia — birthplace of Red Army Faction apologists, eugenics revivals, the no-grades movement and “Latinx”… you name it.

 

In the same way that Fred and Rosemary West “pioneered” non-traditional childcare practices, the RFU, in conjunction with Dr Larissa Davis from my local Manchester Met University, have “pioneered” new accounting and success measures for rugby.

 

Social Return on Investment is trying to establish a new paradigm in valuations. It argues that investment into women’s rugby might not benefit rugby directly but instead create benefits elsewhere (health, confidence, social cohesion) — and then present those benefits as a reason for someone else (usually the taxpayer) to fund rugby.

 

What Davis claims is that for every £1 spent on women playing rugby, the return is £3.20.

Also, for every woman who plays rugby for a year, the social value to the wider economy is over £3,000.

 

This comes from better health, for example — i.e. the NHS might have fewer cardiac cases. However, Davis also points out that for every pound spent on the men’s game the benefit is about £1, and that a man playing rugby is only worth about £1,000 in Social Return on Investment.

 

In other words, Davis is implying that one woman playing rugby generates roughly the same “economic value” as adding an extra taxpayer on about £27,000 a year. Of course, at this point you might want to ask: why not just give women a direct tax credit to play sport? But then who would line the pockets of sports administrators and academics? Anyway, I digress.

 

Run that logic at scale and it becomes absurd: if every woman aged 18–45 played rugby, you’d supposedly “add” about £30bn to the economy — enough (in theory) to fund the entire Home Office, build 30 state-of-the-art hospitals, or… fund 10 aircraft carriers. I particularly like the last idea.

 

The problem that Davis and the RFU have is that people who watch rugby are normal, reasonably intelligent people — so to sell it they needed a softer audience. Enter the UK Government.

 

Say what you like about Sweeney and Davis, but they know their audience. When perpetrating a mistruth, the first thing you have to do is manipulate language — and frankly, nobody has done it better. The reframing of value, and what rugby actually is, into a monstrosity of inclusivity bingo deserves a begrudging respect. The women’s game instantly transformed from a development cost (code for loss-making) into a high-yield “social” investment.

 

Once you’ve established the principle of spending a pound of somebody else’s money to create £3 of imaginary money, the sky is the limit. Now the RFU is seeking to change its relationship with the UK Government — and, by extension, the taxpayer — so it’s no longer just the custodian of sport but the deliverer of social outcomes, and will charge as such.

While lobbying the Government into handing over taxpayer money, the RFU and Davis have come up with some frankly incredible study numbers.

 

They claim, for example: the global grassroots game is worth $8.4bn in “social return”; global healthcare savings total $1.5bn; closing the gender gap in the sport adds $2.8bn in “social benefit”.

 

And this is all because of reasons! Yes — highly educated, highly researched, highly credentialed reasons that could never be disputed because they were contained in an academic paper!

 

I wonder if the paper was called “The intersectional study of money laundering and knowledge laundering”.

 

Importantly, now that the RFU and Davis had established the broad scaffolding of this scam — then laundered it through the British state’s machinery — it was ready for supercharging by the real experts. Let the rent-seeking really begin.

 

If you thought that Dollar Bill Sweeney loved his money, you would be correct — but only because you’d never met the characters involved with CVC or Silver Lake. I have no idea how they first found out about Social Return on Investment, but I’m absolutely certain that when they did, their pupils turned into dollar signs and their hearts started thumping through their quarter-zips. One can only imagine the howls of laughter as Sebastian struggled to put together an email outlining the idea of Social Return on Investment through the stream of tears running from his eyes. SEND ALL!

 

Private equity don’t just like this idea — they love it.

 

Let’s start with Silver Lake and the All Blacks. During private equity’s purchase of a stake in New Zealand Rugby, they set up what is known as the Legacy Fund: a $60m endowment fund, with the growth on the principal put into local rugby grassroots projects. This is an absolutely genius idea because, although on the face of it the $60m investment seems very generous from Silver Lake, it actually relies on matching funding from other sources — whether that be the game itself or local government.

 

The basic premise is this: Silver Lake, via the Legacy Fund, spends some of the growth annually on rugby projects, which in turn puts pressure on councils, governments and everyone else to match the funding. This is a one-off cost to Silver Lake but provides it with a continual PR machine which, in the long term, will be funded far more by government and local authorities than it will by Silver Lake — whilst Silver Lake continue to get the praise.

 

Let’s give an example. If the Legacy Fund commits $10,000 to a changing room and New Zealand authorities commit an additional $10,000, that’s $20,000 in total. However, what if we add some “social return” to that number? Let’s say the programme is aimed only at women: all of a sudden, we can multiply that number by 3, meaning that Silver Lake’s $10,000 can be presented as an investment of $60,000. Amazing.

 

Maybe we can start manipulating Social Return on Investment further. The Legacy Fund has done all sorts of interesting things, such as funding accessible rugby for the Chinese immigrant community of New Zealand. I wonder what the Social Return on Investment is for that. Cha-ching.

 

Eventually, one day, when the New Zealand public realise that Silver Lake are busy plundering their national sport to meet their hurdle rate, they will be confronted with these wondrous investments — and it won’t be the money which has been physically invested, but the Social Return on Investment that is quoted.

 

I do wonder if we’ll end up with Larissa Davis and her kin realising they’ve created a Frankenstein’s monster, sobbing into their purple hair dye and vegan hummus.

But we actually have a real-world example from New Zealand of using Social Return on Investment to muddy the waters. The 2021 Women’s World Cup in New Zealand was heralded as a huge success. It was called a watershed moment in the sport. It was hailed as a success across the headline metrics — attendance, attention, sponsorship — even if the finances didn’t stack up.

 

The tournament made a record $22m in sponsorship and ticket sales, but unfortunately cost upwards of $30m — some of this was picked up by the New Zealand taxpayer.

 

Because of Covid-related timing and accounting, New Zealand Rugby booked most of the revenue in 2021 — and most of the costs in 2022 — which made the swing look even uglier.

Although the New Zealand taxpayer picked up part of the tab, the union would have been better off without the tournament. That is, until you factor in the Social Return on Investment.

At this point I have to doff my cap to Bill Sweeney and the RFU. Seeing the New Zealand experiment partly succeed, then improving it, they realised something that any good businessman would know: you can’t provide a service then ask for payment in retrospect. No — you need to find a willing consumer, and amazingly, the RFU did just that.

 

Rather than measure the so-called Social Return on Investment after the tournament, the RFU decided to convince the UK Government to front-load the benefit via the Impact ’25 programme. The UK Government, via Sport England, spent £14.4m on the women’s game.

Some of the returns on investment are frankly staggering — and equally laughable. England’s Women’s World Cup created £2bn of Social Return on Investment.

 

This time, the RFU have taken it to a new level, attributing made-up values to a whole host of itemised line items. Values have been attributed to all sorts: female rugby players, female leadership capital, role model value — the stupidity never ends.

 

Of course, if you say these figures for long enough, you start to believe them. However, it will end in disastrous consequences. The final consolidated figures for the cost of the Women’s World Cup in England have not yet been released, but there is a strong rumour of a huge financial loss from the tournament itself — even if the made-up numbers look very healthy.

We also need to ask questions about how future money will be spent if the authorities are taking Social Return on Investment seriously. Why would any governing body or government ever spend on the men’s game when our SROI is so low?

 

Also, Social Return on Investment in and of itself has plenty of holes in it. How do we know that the women joining rugby teams are not actually coming from netball teams? How do we know that injuries caused by rugby don’t offset the benefits claimed? How do we know that men are not leaving the game because they are disheartened with the changes in their environment and their club — or the invasion of single-sex spaces?

 

Ultimately, these are someone else’s personal priorities dressed up as hard economics, when nothing could be further from the truth. We’ve already seen England’s second tier, the Championship, devastated by funding cuts which suspiciously looked similar to the amounts the women’s game received in funding.

 

And what happens if the political winds change for the UK Government and there’s no longer a consumer for so-called social outcomes? This is going to leave the RFU with an awful lot to answer for.

 

And lastly: once CVC and the other Premiership operators realise SROI is the perfect shield against scrutiny, what tricks do we think they’ll pull next?

 

 

 

 

 

Reverse benchmarking is the process of looking at your competition — not to see what they do well, but to see what they do poorly. Most financial advisers do not take children’s investments seriously. They often treat them as a “free” add-on, or a small task not worth their time.

 

For example, some Fisher Investment will happily take Grandad’s £1 million portfolio, but if you want to provide for grandchildren, forget it — because they focus only on “big ticket” adult portfolios. This is partly due to the IFA industry being creatively lazy. Ask an IFA to solve a problem and the two most common answers are usually: “What does compliance say?” or “What is everyone else doing?”

 

 

A child’s financial plan should be divided into three distinct “pots” based on time horizons. This is no different to how adult money should be managed, although there is some additional nuance.

 

In very basic terms, this should be structured like so:

 

Purpose: Immediate expenses and extracurriculars (e.g., flute lessons, horse riding).

Benefit: Alleviates daily household budget pressure.

 

Limit: Up to £9,000 per tax year.

Access: Locked until age 18, at which point it belongs entirely to the child.

 

Limit: £2,880 per year (which tops up to £3,600 with tax relief).

Access: Locked until the child’s late 50s.

 

A sensible way to fund children’s investments is to start with a clear order of priorities. Most families find it helpful to split things into two buckets:

 

 

Money that’s genuinely for later — like university, a first home deposit, etc.

For parents, regular monthly contributions are usually the most straightforward approach. Even relatively small amounts can add up, and it’s often easier to increase a monthly amount over time. Review whenever a big cost drops away, like childcare.

 

It’s very common for grandparents to want to help, and frequently the wider family have strategies for helping grandchildren — but the different generations never get around to talking about it.

 

 

Regular gifts from surplus income can be treated as “normal expenditure out of income” and can be immediately outside the estate for IHT (good records matter).

 

Lump-sum gifts can use allowances (e.g., £3,000 annual exemption, with the ability to carry forward one unused year; plus £250 small gifts). Beyond allowances, larger gifts may fall under the seven-year rule.

 

In simple terms: out of income gifts can be unlimited; out of capital gifts rely on allowances and/or the seven-year rule.

 

This often comes down to cash accounts versus Junior ISAs (JISAs).

A cash account (in a parent’s name, or a designated savings account) gives flexibility, because you can use it whenever needed.

 

A JISA has a key advantage: growth inside it is tax free, which makes it an attractive long-term home for money you genuinely don’t need to touch until the child is older. The trade-off is access — money in a JISA is locked away until 18, and at that point it becomes the child’s money to control. So, a common-sense approach is to cover “cash now” needs first, then feed the “long-term” pot second.

 

For example, you might decide to keep enough in a cash account to cover expected costs for the next year (school trips, clubs, and the usual extras). Once that annual cash buffer is covered, any overflow can go into the JISA to take advantage of the tax-free wrapper.

Should you be able to fund both, then look at the Junior Pension.

 

 

So you’ve decided that you want a cash account and a JISA — but where do you invest them, and how? A JISA, much like a pension or normal ISA, is not an investment. It’s a tax wrapper: the container you hold investments in. It mainly determines how returns are taxed and how the money is accessed — it doesn’t tell you what you’re investing in.

 

An asset class is what you actually invest in — the underlying “thing” your money is buying. The main ones you’ll hear about are:

 

Cash (savings, money market): typically used for short-term needs and liquidity.

 

Bonds (government or company lending): you’re lending money in return for interest-like payments.

 

Equities/Shares (owning parts of companies): usually aimed at longer-term growth.

 

For the cash pot, cash is a strategy in its own right — to cover known or likely costs in the next few years. The point isn’t to squeeze every bit of return; it’s about having the money available exactly when you need it. For the longer-term pot, one diversified fund is fine. The appeal is simplicity and low cost.

 

 

A big downside of a Junior ISA is that at 18, the child gains full control. The situation might be akin to buying a Formula 1 car before doing your first driving lesson. Having the money is great — but what do you do with it all on your 18th birthday?

 

George Best once said of his football earnings that he spent most of his money on women and beer and wasted the rest. This is very funny unless the George Best in the story is actually one of your children, and the money they’re spending has nothing to do with football — but is instead the product of careful multi-generational family saving and stewardship. In this case, it’s vastly less funny.

 

Oddly, it’s exactly this situation that might open the door to a gift even more valuable than the money itself: financial education.

 

 

In short: now!

 

In schools, financial education is not a priority because it isn’t treated as a core. It’s scattered across Citizenship/PSHE (and sometimes maths), so delivery varies wildly. With exam pressure and limited timetable space, anything not directly examined gets neglected — and teachers haven’t had the training for real-world topics like tax, pensions, investing, etc. Also, money can feel “sensitive” in classrooms, so it’s often watered down or skipped.

 

The best approach is to weave money through real life rather than treating it as a standalone subject. It sits naturally inside maths (percentages, interest, discounts), PSHE (choices, risk, consumer rights), and citizenship (tax, public services, responsibility).

 

Projects work well: running a simple mini “business” day, setting a budget for a class event, or giving pupils a scenario like renting a flat and working out the monthly costs. A really effective exercise for older pupils is a “first payslip and first flat” scenario: they get a gross salary, work out deductions, budget monthly bills, and then decide what to do with what’s left (spend, save, build an emergency fund).

 

This can be taught in a way that’s age-appropriate without making it dry. For younger children (5–8), it’s mainly about recognising coins and notes — and there are plenty of good children’s books that help. For ages 9–11, you can introduce saving goals, comparison shopping, and the idea that “value” isn’t always the cheapest option. By secondary school, it should become properly practical: budgeting, subscriptions, bank accounts, interest, debt, and the reality that adverts and influencers are designed to trigger spending.

 

 

Between ages 16 and 18, start treating the child like a partner in the investment. Shift the gift from being purely monetary to being educational. At this age, children can begin to manage their portfolios but not access them. It’s the perfect window for them to develop the skills and knowledge for proper financial planning.

 

Involve them in the process. Teach them about stocks, shares, and compounding. If they understand the “why” behind the money, they are much more likely to use it for sensible goals — such as an apprenticeship or a house deposit — rather than short-term impulses.

The best result for children is to agree objectives jointly. If they need £5,000 to go travelling, well, this is no bad thing. If they invest the remaining £30,000 for the next several years until they’re ready to do something constructive with the money, even better.

 

 

Once the child turns 18, you can encourage them to move a portion of their JISA (up to £4,000) into a Lifetime ISA. This triggers an immediate 25% government bonus (£1,000).

This effectively “locks” the money back up for a first home purchase or retirement, providing a safety net against impulsive spending.

 

 

Use your (and the grandparents’) ongoing contributions as “soft power”. If the child makes wise decisions, the contributions continue; if they don’t, the funding stops.

 

But most importantly, it locks away the money, providing you with a sense of safety that the child is not going to spend it all on fast cars — or even faster partners.

 

 

Given the current housing affordability crisis, many parents want to help their children buy a home later in life. If this is the case, not contributing to children’s ISAs after your own are full can be a bit of a fool’s errand, as you’re only going to be keeping up the pressure later.

Alternatively, it may be that the best way to fund your children’s future is using your own ISA allowance. You get the tax benefits as well as flexibility, and you can put away up to £20,000 — which is more than the £9,000 allowed by Junior ISAs.

 

This might be particularly valuable if you value things such as family holidays or want to spend the money before children get to 18. Conversely, using your own ISA allowance would allow you to fund things like private school fees, which a Junior ISA would not allow due to its age restrictions.

 

It’s not to say that one way is better than the other — only that there are other ways to think about it.

 

If you wish to access a table of the pros and cons (including tax treatment and access) of the various places parents can put children’s money — including using their own ISAs — 

 

 

 

 

 

 

 

For those of you who listen to the podcast, you’ll know Phil and I often end up down some esoteric rabbit holes, especially over a beer, including the sales techniques of Bernie Madoff.

 

Madoff would reject almost everyone who asked to invest with his wealth advisory business. No matter how rich, famous, or influential you were, the answer was always a flat no. Then, six months later, he’d call you back and say, “Some capacity has just opened up, and I can get you in.” It created false scarcity and exclusivity, and it made the world’s elite desperate to give him their money.

 

What Bernie Madoff did was abhorrent. He deliberately deceived people into handing over their money, he undermined confidence in the financial system, and he did it for decades.

For those of you who believe in natural justice, Madoff died in 2021. He was incarcerated and broke, and he lived through the deaths of both of his sons ,one by suicide, the other from cancer. Very rarely has one man experienced the extremes of risk and reward quite like Bernie Madoff.

 

The Madoff Ponzi scheme story has been told many times. What’s less widely known is that Madoff ran two distinct businesses, on different floors of the famous Lipstick Building in Manhattan. One of them was completely legitimate.

 

Madoff was a fraudster, but he was also a brilliant mind with an eye for opportunity. As always, multiple things can be true at once.

 

It started in 1960 when, with $5,000 of capital plus a $50,000 loan from his father in law, he founded a penny stock trading company. If you’re unsure what penny stock trading is, watch the opening of The Wolf of Wall Street.

 

Like so much of Madoff’s success, it was circumstance as well as talent ,and he happened to be the man who could exploit the gap. The gap was simple: the big Wall Street players weren’t interested in small trades.

 

That created the space for his first company, Bernard L. Madoff Investment Securities (BLMIS), to become a giant. It was a huge market, making firm that traded billions in equities every day. This side of the business was the real deal ,so successful that Madoff eventually served as Chairman of NASDAQ and amassed enormous wealth.

 

BLMIS was run by Madoff’s brother, Peter, and his two sons, Mark and Andrew. And it was his sons, incidentally, who turned him over to the FBI after he finally confessed that the “other” business was nothing but an enormous fraud.

 

Madoff made hundreds of millions of dollars. It was a huge success, and it was built on technology. Whatever else he was, there’s no denying he was a disruptor and an innovator in trading. He was also a savvy political operator, pitching himself as the little guy taking on the New York Stock Exchange, making trades cheaper, quicker, and more accessible for ordinary people. And, as it happens, that part was true.

 

Madoff understood that computers could match buyers and sellers faster than the specialists at the New York Stock Exchange. The NYSE still had advantages ,scale, better price discovery, and, crucially, the obligation to trade at all times. But Madoff could undercut them, and he could also offer kickbacks to brokers placing deals on behalf of clients.

 

The big institutional banks and pension funds still preferred the unwieldy, oldschool processes of the NYSE. But for smaller retail clients, BLMIS became a preferred partner. A good way to think of it is as the equivalent of today’s trading apps: making equity ownership more available to the masses, it also happened to be extremely profitable.

 

The volume BLMIS was handling was so large that it could match buys and sells internally, through a process called internalisation. It started with penny stocks, then grew until eventually he could trade all stocks on his own platform. Madoff became a true titan of Wall Street.

 

So while the 17th floor of the Lipstick Building was a Ponzi scheme, the legitimate business on the lower floors was printing money. Even though it was squeezing the NYSE on price, it still kept very healthy margins. And the reason he could do that is genuinely startling.

 

To understand it, you have to look at how the NYSE functioned until the early 2000s. But to really understand it properly, you have to go back further ,all the way to the 1500s.

 

 

If you’re ever lucky enough to visit Madrid, you’ll see a city built on enormous wealth. Spanish explorers set sail in galleons to find riches in undiscovered lands and they found them.

 

By the mid,1500s, Spain had established colonies across the Americas, including Mexico. And by a stroke of luck, their new South American possessions contained some of the richest silver mines in the world.

 

Spain used that silver to mint high quality, consistent coins known as Spanish 8 real coins. They became so widely used that they effectively turned into a global currency, powering trade across the Atlantic and the Pacific, and throughout various colonies, including the British Empire.

 

When America passed its original Coinage Act, the dollar was intended to reflect the value of the Spanish silver coin. One of the most widely cited theories is that the “$” sign evolved from merchants abbreviating pesos as “Ps”, with the letters gradually overlapping.

 

You might be wondering what any of this has to do with Wall Street? Up until the early 2000s, the U.S. stock market didn’t use decimals. It used fractions, historically eighths, before switching to decimals. Why eighths? Because the Spanish 8 real coin literally meant “pieces of eight”. Astonishingly, the New York Stock Exchange, the hub of capitalism in the world’s most dynamic economy ,was still using a pricing system rooted in a currency design from the 1500s, well into the new millennium.

So instead of a stock being priced at $12.50, it might be priced at $12 4/8, and so on. The smallest possible spread, the gap between what you buy a share for and what you sell it for ,was one, eighth of a dollar, or 12.5 cents.

 

As a market maker, Madoff sat in the middle of that gap. Every time he matched a buyer and a seller, he was effectively guaranteed a minimum of 12.5 cents per share. When you’re trading millions of shares a day, that adds up to a staggering amount of legitimate wealth.

 

 

Ironically, Madoff’s legitimate empire was effectively killed by modernisation. As technology improved, the exchanges moved from eighths to sixteenths, cutting his guaranteed profit in half. Then came the final blow: decimalisation. In April 2001, the SEC forced the markets to switch to pennies. Overnight, Madoff went from making 12.5 cents per share to making fractions of a cent.

 

The “real” money dried up almost instantly. It’s no coincidence that pressure on the Ponzi scheme intensified at exactly the same time his legitimate business hit legitimate headwinds.

 

By 2008, the game was up. BLMIS was no longer the force it had been, and investors, in what became the perfect storm of the credit crunch, started demanding withdrawals the Ponzi scheme couldn’t sustain. When it was all said and done, of the $60 billion Madoff claimed to control, only hundreds of millions remained.

 

The broker, dealer side of the Bernie Madoff empire obviously became an untenable proposition once the scale of the fraud was revealed and the company was liquidated. But one extraordinary detail still stands out: for all the salesmanship, networking, political connections, disruptive technology, and computerised trading, one of the most important factors behind Madoff’s wealth was simply that Spanish explorers 500 years ago minted coins that were divided into pieces of eight.