Brexit is making me rich (and I hate it)
Brexit, bloody Brexit. If you’re in the UK, there’s no escaping the talk of Brexit. Not even this little blog is safe. It’s not surprising really, considering in a little over two months, the UK will be leaving the EU, and yet still no one has any idea what leaving the EU will actually entail.
The thing about Brexit is, as much as I wish it wasn’t happening, it’s making me rich! And in all likelihood, it’s just going to keep making me richer. It’s hard to know how to feel about this, as anyone who knows me will attest, I’m an ardent remainer. It pains me to know my daughter won’t grow up having the same opportunities I had - to live, work and easily travel throughout the other 27 member states.
But that’s not the point of this post, the point is all this extra money.
It all started on the 24th June 2016. The UK narrowly voted to leave the EU, and as a result the value of the British Pound tanked. The pound went from being worth $1.49 before the referendum result, to just $1.32 afterwards, the lowest it had been since 1985.
This was bad news for most of the country, but great news for me. The vast majority of my income comes from my website feedback startup, Saber, which has mostly American customers. Because of this, the subscriptions are priced in US Dollars. I also use a US based payment provider to charge credit cards in dollars, and then deposit the equivalent amount in British pounds in my bank account.
For example, a $100 subscription before the referendum would be worth £67.11 to me (100 / 1.49). However, after the referendum, that same $100 subscription is suddenly worth £75.76 (100 / 1.32), an extra £8.65 in my pocket for doing literally nothing.
In the 30 months since the referendum vote I estimate the weak fluctuating pound has gifted me an extra £8,333.
This estimate works on the assumption that without the referendum, that exchange rate would have stayed the same as it was before the vote. In reality there would have been fluctuations, but from 2009 up until the vote the median exchange rate was 1.539 (min 1.362, max 1.716), where as the median since the referendum is 1.319 (min 1.204, max 1.434), so it’s pretty safe to assume the exchange rate would have been a lot less favorable to me if the vote hadn’t happened.
It’s also worth noting that Saber first became profitable after the referendum. In November 2016, Saber posted its first profitable month, making £290. However, I estimate that the post-referendum exchange rate brought in an extra £381 that month, so without that extra “Brexit Dividend” I would have made a loss that month. Thankfully in the next month I made £389 profit, and the exchange rate only brought in an extra £339, so I would have still reached profitability, just one month later.
There’s a lot of talk at the moment about the potential “No Deal” scenario, which seems to get more and more likely by the day. This is pretty fucking terrifying, the government is even talking about stockpiling and rationing medicine, great news when you’ve just had a baby. A no deal is predicted to bring the value of the British pound down even further, some are even saying we could end up with GBP - USD parity. For me, and anyone else who primarily sells to the US, Dollar parity is on the surface a good thing. If the pound dropped to the same value as the dollar tomorrow, I’d get an extra £1,000 in my bank. Every single month.
Now I know it’s not quite that simple, especially as much of what we consume in the UK comes from abroad, and those things would become more expensive if the pound gets weaker, but so far the post-referendum exchange rate has definitely been a net-positive for my family financially.
And this is why I’m so conflicted. Brexit, this thing I hate, that I campaigned and voted against, is helping me support my family.
Having said that, if I could go back in time and vote again, knowing what I know now, I’d still vote remain. And I’d gladly give up all this extra money if the UK could remain part of the EU.