New Year, New Career?
4th January 2023
Much more than just a gym, we have something for everyone and looking forward to 2023
5th January 2023
Happy New Year! I hope this article finds you and your family well. It has been a chaotic couple of years with Covid and the Ukraine war, so let’s hope 2023 brings some peace, stability, and normality back our lives. I imagine the Ukraine situation is unfortunately going to rumble on for a while yet. This tragedy is the root cause of the global cost of living hikes we are all having to deal with. Historic long-term inflation is around the 2.5% per annum mark. Right now, we are around 11%. This is temporary and is beginning to slow, but it will take a while before it comes back into what can be deemed ‘normal’ territory.
With all the chaos we have experienced over the last few years, I feel it is important to reiterate some timeless truths:
• The economy can’t be forecast.
• The market can’t be timed.
• Therefore, the correct time to invest for the long run is whenever you have the money.
• By the same logic, the correct time to sell investments is whenever you need the money.
• Everything else is commentary and speculation.
I can’t advise you on economic and/or market timing. No shame on me for that: neither can anyone else, as the last nearly three years of chaos conclusively demonstrate. I am much more interested in creating lifetime retirement/legacy plans with and for my clients, then spending the rest of my relationships with clients making sure that their plans come to fruition and generate an income that cannot be outlived.
Where Can I Reduce Costs?
As most people are more closely examining where their money goes every month and any areas where they can make savings, I would like to recommend Martin Lewis’ website for this type of information. https://www.moneysavingexpert.com/ Mr. Lewis does often sail quite closely to the wind when giving financial advice because he is not regulated or qualified to do so, however, there is no denying that his website is a great source for up-to-date money-saving ideas, tips, and deals. I strongly recommend you add it to your website favourites and dive in every now and again. I get no reward for recommending his site, I just think that it is one of the best ones out there to get quick up to date information for consumers to assist in making things a little easier.
In this digital age we live in, many of us have become victims of the ‘Auto Renew ‘ syndrome. It can be extremely costly. Cancel automatic subscriptions. Chances are, you’re paying for multiple subscriptions like Netflix, Amazon Prime, Spotify, gym memberships, and annual mobile phone subscriptions. These costly renewals often go unnoticed. It’s time to cancel any subscriptions you don’t use regularly. The annoying ones are the ones we no longer use and have forgotten about. Check your Google auto-renew page to see who is still happily taking your regular subscriptions. And make sure that you turn off auto-renew when you make a purchase. If you cancel it and decide you can’t go without it, subscribe again—but only if it fits into your new and improved budget.
And for those subscriptions you do want to keep around, think about sharing memberships with some family or friends. A lot of streaming services, like Netflix let you watch your favourite shows from two or more screens (with an upgraded account). That way, everyone wins—and saves!
Accessing Pensions During Tough Times
We all know that a pension is designed to generate an income for us in retirement, but you can you access them early if you feel you need to. Whether you have personal pensions kicking around or whether you have an old or existing defined benefit/final salary schemes, you can access them from age 55.
It certainly will not be the best thing to do for most, but if needs must? If you have any personal pensions, you can access up to 25% of the value of them tax-free from age 55. If you have an old or existing defined benefit/final salary scheme, you have the possibility of transferring it to a private pension to access benefits flexibly. This could be used to pay off debt early and allow someone to go part-time by using their pension to
subsidise income.
Unfortunately, the transfer option is not available to you if you are in or were a member of the Civil Service, NHS, Armed Forces, Emergency Services or Teachers’ final salary pension schemes because these are unfunded public sector schemes.
Transferring a final salary pension scheme should never be taken lightly as these schemes provide guaranteed and rising incomes in retirement. The professional advice process in looking into the financial viability of transferring is lengthy and thorough and you should only ever seek advice from suitably qualified independent financial advisers who can evidence that they have the appropriate qualifications and experience to advise you in this area.
Never speak to any cold caller who says they can get your pension out quickly and cheaply. It will be a scam and you could lose your entire retirement savings. Always carry out thorough due diligence on any company you are thinking of using. Manning and Company have been established for over 30 years and have the credentials to advise in this area.
On the subject of retirement planning, I have learned a great deal during my 30-odd years as an adviser. So much of retirement planning focuses on the money side.
Too much in fact. If you’re less than 5 years away from retirement. Start thinking about investing in your social assets such as old friendships, hobbies, and interests. Start investing in them. You will reap the benefits.
DON’T PANIC MR. MAINWARING!
In over 30 years as an adviser, the single biggest mistake I see long-term investors make is confusing volatility with the permanent loss of capital. These are 2 very different things. Losing money by pulling your money out when you don’t need it just because the markets are temporarily down is a purely human achievement. Markets will always be temporarily down at times during your investment timeframe. Quick tip, they always come back stronger and reach new highs. It is the way markets have always behaved and as an investor you must learn how to behave yourself to wealth.
The 4 most dangerous words an investor can utter are “this time is different”. It never is, it just feels this way at times. Knowledge is not enough to alter human behaviour, it takes discipline. 70% of my job as an investment specialist and a Behavioural Investment Coach is spent managing my client’s behaviour around money. It is making sure that none of my clients make The Big Mistake, panicking. Doing the wrong things at the wrong time for the wrong reasons.
If you want to find out more on how to be a smarter investor and how much money you need to retire comfortably and stay comfortably retired, please contact me on 01752 837950 or visit my client education and behavioural investor website which brings all the above to life: www.saverbehaviour.co.uk
Mike is the author of Your Money and Your Life available on Amazon: www.amazon.co.uk
He specialises in investing, inheritance tax planning, and retirement planning. Mike is also a member of the Parliamentary Review and has written a piece for them which was sent out to over 500,000 businesses in the UK.)
