Investment Insights
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A reported article in election year has emerged from the 'International Longevity Centre', who even knew of such a department - and I bet they are very well paid! The suggestion is that state pension age needs to rise, which in fairness is not really new 'news' as it is a topic that has been going on for quite some time. I am actually of the view that extensions to the state pension age should not happen but that is a discussion for another day! Now, without wishing to be an alarmist, the reality is that most people are inadequately prepared and will probably arrive at retirement with the financial bucket empty! In this day and age we find ourselves living in an Instagram picture perfect world and saving for all life’s stages is not considered by most, but for the few who do want to listen, I would say ignore what you think you may get from the state system and take control today! If you have time on your side, map out your perfect life, marriage, kids, state school vs private school, holidays, healthcare etc etc..., what does your best life look like for you and then cash flow your scenarios. If you are older than these life stages feel free to join the journey at your age, then challenge your assumptions and expectations and put your life plan down on paper and place a copy on your fridge door… Taking control is the only answer to a secure life, everything else is just luck or bad luck if not planned. 5/2/2024 Inside my brain...I watched 'Inside Bill Gates's Brain' on Netflix a little while ago, and before I had watched this series, I did not really understand him, yes, I knew he was smart, the inventor of ‘windows etc’, and I had heard about the Gates Foundation and philanthropy pledges by his rich friends, but that was about it.
Now let me tell you that once I watched this programme my limited view of him changed. As you may know, I encourage living your best life and for most of us being financially independent is the target, so that you can do what you want not what you need to do to survive. Here is a man who has all the money in the world and obviously doesn't need to work another day of his life, yet he is continually looking to develop his knowledge and is trying to solve BIG problems that face this world using his wealth. He does not travel first class ‘as it’s not good value’, he has more or less rid the world of polio and is taking on big projects to change the world for the better, such as recycling used uranium which sits in stockpiles and poses a great risk to the planet. Why does he do all this when he could choose to simply sit on a beach all day? It could be the sense of purpose or the desire to leave his mark, but whatever it is it continues to drive him each day. So ask yourself, when you are gone will people remember you, or do you even care, what will your legacy look like? Family and passing wealth to the next generation is an important discussion, that's best not left too late... 10/1/2024 Charlie Munger... who you say?He was part of the famous duo, no not Batman and Robin, he was the lesser known business partner of Warren Buffett, and he recently passed away aged 99, still firing on all four cylinders. Between them they built an empire which made them both extremely wealthy and although he originally trained as a lawyer, he and Warren had a vision and they set out to build a business based on mathematics and the compounding effect of money making money. Although what they have done together has been a masterclass in investment it is very hard to do especially if you are starting from zero. One of their secrets was to buy businesses that they understood, where they could see growth potential, and not to overpay, sounds easy, but it is not! The lesson we can all take here though is to save and invest and compound! How will you build your wealth? 7/12/2023 Breaking News!You can’t live your best life now and also expect the same in retirement...
Or can you? For most people there may need to be some compromises made but the trick is to get the right balance between living for today and also saving for tomorrow. Some people have spent heavily during their life and have saved very little, some have saved well but have not lived their best life. Take a note, sit back, reflect and consider what you want to do when you are not working full time, make that list, put a cost against each thing and then add up all your assets to cash flow your next life… We help people, perhaps just like you, understand the opportunities to live their best life and enjoy a successful retirement… 20/11/2023 Living...I recently watched this interesting film with Bill Nighy and it got me thinking. The film is set in the early 50’s and in post-war Britain, it had a grey and gloomy feel compared to today as money was limited and joy was certainly not in abundance. The story observes the realisation of a humourless civil servant who having been diagnosed with terminal cancer has only six months to live. Having already lost his wife and with no real relationship with his son, he realises that he has not lived a fulfilled life, so he goes about helping a women’s campaign group set up a children’s playground as they have been struggling to get past the government bureaucracy, we all know that feeling! Having Meaning, for me the lesson to be reminded of is to not leave it too late, show your family you love them and help others as you travel through time, it’s not all about money as the character in the film had a wallet full but it was not that which he was remembered for or what ultimately gave him happiness. Watch the film, even if it’s only about reminding yourself to live… There never seems to be a good time to save for retirement but if you wait for the 'right time' you probably never will...
When you are in your 20’s, retirement is just a concept way off in the distant future and you just want to party. When you are in your 30’s and 40’s you are just trying to bring up your family and getting by is the priority. When you get to your 50’s it might suddenly dawn on you...OMG, how am I going to save enough? Get to your 60’s and well… You don’t want to have to settle for a life that you have to have because you did not plan, what you want is to live your best life! Remember even if you have planned what retirement will look like it’s not a done deal, you need to keep it under review as life will send you curve balls! Take action and live a life with no regrets! 21/6/2023 Risky?Recently presenting to my student audience and being able to get them to start to understand what taking no risk or too much risk, be it in life or investments may mean.
Risk means different things to different people. For instance, someone may consider risk as a permanent loss of capital, but someone else may consider even a temporary loss too much. This is where understanding what you buy and owning what you buy is important, I would say that if you don’t understand what you own then you are maybe taking too much risk and vulnerable to surprises. If you use an adviser challenge them to explain what you are invested in and what are the risks, you do not want to know the generic answer, but what is it actually invested in - property, cash, fixed interest or shares, and then drill down, for instance, is the money invested with a high street bank or a is it a money lender who preys on the vulnerable? You can then consider how this may help or harm your wealth and how it sits with you morally. By better understanding what you own this should lead to a better understanding and ‘comfort’ in your invested capital. With the students, I demonstrated using a simple product how increasing amounts of higher risk assets in a portfolio does potentially lead to greater returns, and the longer that this capital can be invested the greater these can be, however, buying a higher risk product that is linked to a dubious asset won’t necessarily get a greater return, more likely a lesser return, or even permanent loss of capital. So, I would say, "Buy what you understand, understand what you buy!" This is the same as going for a job, if the employer goes bankrupt and your employment is cut short, what is the financial impact on your future plans… |
AuthorSteven is a Fellow of the Personal Finance Society, whom is passionate about investing and getting the most from your money. Archives
February 2024
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Steven Mufti & Associates Ltd is authorised and regulated by the Financial Conduct Authority.
Financial Services Register Number 607613. Registered in England & Wales, Company number 8664240. Registered Office address: 27 Armitage Court, Ascot, Berkshire, SL5 9TA. Telephone: 01344 623811 Email: advice@smawm.co.uk The guidance and or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted to customers in the UK. The FCA does not regulate taxation advice. The value of your investments may fall as well as rise. Financial Conduct Authority register: https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000NMlk7AAD |
7/2/2024
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