Investment Insights
Investments do rise and do fall in value and we strongly advise that professional advice is taken before investing your money
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… 21/6/2023 What is the best investment?I set this question to a group of pupils at Langley College and received a variety of answers.
The answer is easy when you think about it. In life’s journey it is not easy to accumulate wealth. Some get lucky but for most, it’s a constant grind and a lifetime of accumulation to achieve a bucket of assets to live your best life. Now if I were to say that your best investment was actually to invest in yourself, I typically get a confused look from my audience, but I go on to explain that the students should aim at getting the best grades that they are capable of, as this enables them to get the best job that they qualify for. Each level of achievement should lead to a better salary and that leads to a higher standard of living and then gives you the ability to save for the future, as opposed to a minimum wage role which would be more of a hand to mouth existence. So if you can study hard, achieve the best grades that you can achieve and aim high this should help you get a role that pays higher than the average. Taking this ‘premium’ income and investing diligently each month will slowly but surely build a better life and financial security. As we progress through life we learn a lot of lessons and one of those is to help others on their journey.
I was recently asked to present a masterclass on investments for Langley College. Like most people I am always busy and it can be easy to believe we are just too busy to stop and help, however, Magdalina Redzik from the college convinced me that I could help some young people on their business course see what their developing knowledge could be used for in the outside world. My initial answer was if I can’t get my 17 year old son to listen to me why would her students! I am no public speaker by any means, but I can say I was warmly welcomed, my presentation was well received and lots of good questions were raised by my audience including taxes, best investment ideas, investment returns, through to bitcoin. I hope to have sparked something for those students and hopefully inspired them in some way. My message to the young is to get a mentor with the knowledge that you wish to acquire, which will fast forward your career. This is priceless and if you can’t get a mentor then ask as many questions that can be tolerated by people who are in the career of your choice and hopefully will inspire you to success! 3/3/2023 'What Price Freedom'In most cases, being self-employed gives you the freedom to make your own choices in terms of who you work for and when, along with the rate for your labour, which is understandably a very powerful attraction to the self-motivated and hard-working entrepreneurial population.
So… Why is it that, according to the Office of National Statistics (ONS), only 20% of self-employed individuals were contributing to a pension between 2018 and 2020? Are you going to work forever with perfect health, and still enjoy your dream retirement? With higher rates of tax on the horizon (and the horizon is closer than you think) pension contributions should be a priority! Why, you may ask? Well, the numbers speak for themselves... Let's look at an example, if you are self-employed with total taxable profits of £150k in 2023/24 making a pension contribution of £50k, you would receive tax relief at 45% on £24,860 and 60% on £25,140 (40% tax relief plus a further 20% by reinstating your personal allowance). You could be saving tax of £26,271 and then you would have a pot of £50k as opposed to only £23,729 in the bank… Building up long term wealth is about making wins on a regular basis. Is the above you? If so, we need to speak... 3/3/23 11/1/2023 Heraclitus…‘’A mans character is his fate…’’
If you understand yourself and what your strengths and weaknesses are, then you can take actions to minimise your failings and enhance your success. Are you resided to your fate? Take time to understand yourself and what is important to you, this could be the best investment you make for 2023. 15/11/2022 KISS...I'll let you into a secret.
Successful financial planning does not need to be complicated and really it comes down to three simple steps... Step one - Optimise your earnings ability Step two - spend less than you earn Step three - invest and allow ‘time’ to compound your investment returns So, there you have it, keep it simple and take action today! 9/11/2022 A hole in your bucket?Does it feel like that every time you return from the well (work) by the time you get home that your bucket has a hole in it!
If you have this feeling you are not alone. At some stage you will want to live off your savings, pensions and investments and if you have a hole in your financial bucket it’s going to be hard to achieve. So, this is where we can help you succeed. Download our free ebook. https://www.smawm.co.uk/liveyourbestlife.html In simple plain English it covers the 6 vital steps to a successful financial roadmap. We hope you enjoy it and if you find it helpful don't forget to share with those you love. |
AuthorSteven is a Fellow of the Personal Finance Society, whom is passionate about investing and getting the most from your money. Archives
February 2024
Categories
All
|
Home |
About US |
Personal Services |
Corporate Service |
Contact Us |
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 |
21/6/2023
0 Comments