Oops; I’ve just published Money 4, for reasons mentioned in it, so I guess I’d better publish this one, which I still wanted to polish up a bit:
Ever since I left the bank, long, long ago, I’ve obviously not had access to all the data streams, in-house gen, and other sources of information that exist. It does help to have a sound financial advisor, but that depends on how flush you are.
So, what to do? Well, first of all, be sensible and save. Especially in hard times. Don’t keep all your reserves in one basket, have some in the stock markets, some in other, balancing investments like gilts, some in good, solid assets like gold, silver, some in liquid form – needs to be accessible at a moments notice. There are so many books & magazines and Internet resources that can keep you up-to-date with what’s available, I couldn’t be more help even if I wanted to, I’m now a publisher, not an investment advisor. I can give out ideas in general, and everyone is different, so you have to take thing further yourself.
What I say has to be adapted to your own circumstances. Also, style is a factor; if you’re young, you can afford to take a few risks (always within reason). Come to middle age, less so, and if you’re approaching retirement, then you need to be risk-averse. Then, also plan out your strategy to spread through short-term, medium term and long-term investments. The latter is usually your home sweet home. Hopefully, by retirement age, you want to be rid of the mortgage as well, leaving you in relative peace…
What I can do, is to mention things to watch out for. And help you to sharpen your mind to developments that you can learn from. Like a Native American Indian, or an African Bushman hunting for food, you need to learn to pick up the scent, have a keen eye for clues and tracks, footprints, except that yours will be of the financial kind, and not physical.
For example, I mentioned earlier that back around 2003, personal borrowing passed the trillion pound mark, for the first time in history. That’s time to start watching out for property bubbles, stop buying property at ridiculous prices, etc. Soon after New Labour got into power, Gordon Brown didn’t waste time. He sold off most of our gold reserves at the pitiful prices available at the time; he added a really painful levy on the pension funds, that really hurt. With the result that your investments, pension and otherwise suffered, because eventually, it’s always the customer who pays, be it pension funds, supermarkets or fuel. Yes? Did he make saving more attractive? Of course not. He reckoned we/he had the bubble trap well under control, so spend, spend, spend. No more boom & gloom…
Enough. Those were more clues/tracks to note down. You also have to know a few rules, before you recognise they’re being broken. For example:
Always, repeat always, help people into a save mentality.
Don’t mess with the pension funds. Regulate them so they don’t do stupid things, but don’t bleed them.
Residential property prices have to fit into affordable levels. If the average property is not priced within about 3.5 to 4 times average annual earnings, things are out of kilter. If cheaper, you know you’re getting a good deal. If higher, you’re paying too much and running the risk of negative equity sooner or later. Nowadays, people tend to move every 8 years or so. If you can’t get your price when moving, you probably can’t move. People didn’t want to hear that ten years ago, now everybody understands it.