. . . just now is telling us about an unfortunate householder who lost the whole of his pension "pot"(*) of £200,000 because he had been given "bad financial advice". He is now doing a manual job for the minimum wage. £200K in a pension "pot"(*) suggests he was a 'professional' . . . er . . professionally, in which case presumably, though not definitely, he could READ. (I qualify my "presumably." After all, football players are described as "professional" although I doubt most of them can read above the level of Red Top headlines. My evidence? Most of them can't grunt their own names intelligibly.)
I crave your indulgence while I say it again. IF YOU CAN READ YOU DO NOT NEED A FINANCIAL ADVISER. You don't actually need a pension fund. i.e. a bottomless pit of promises that you pour money into every month in the hope that it will still be there when you die or reach retirement age, assuming that happy day ever arrives now that the pensionable age is growing up faster than you are.
But if you insist on (oops . . maybe your conditions of employment require that you HAVE to pay into a pension fund, well hard luck!) . . . setting up a pension pot (*) under the guidance of a Financial Adviser, make sure that he or she knows:-
1. where the FTSE Indices of shares will be when you reach pensionable age.
2. that no World Wars are due to break out before you retire
3. that your government (UK in my case) will not default on its Bond repayments or interest payments or otherwise go the way of Greece, Iceland, Ireland, Portugal etc before you retire
4. that your FA is not going to invest your cash on your behalf in Enron, Lehman Brothers, GEC-Marconi, Ferranti, BCCI, Polly Peck, British Airways or similar disaster areas.
4. which Managed Funds will do best between now and when you retire
5. with 100% certainty that the funds she or he will dump your money into are going to do at least as well as the one they name in 4.
6. that the answer to 4 won't have changed when the FA gets to next week/customer.
I hope you see the ironies implied in this rant. If you can read, you can fix your pension for yourself - at least when nemesis strikes you won't lie awake blaming someone else because your £200K has vanished.
The basic rules are very simple. One third in Bonds(**). One third in Blue Chip shares. One third in cash. (Most Financial Advisers charge you about £100/hour for telling you that.)
(to be continued)
(*) pension funds are referred to as "pots" because of the alliteration. The BBC obviously employs a Poet-In-Residence. I can think of a more fundamental reason for the term "pot" in the context.
(**) Mine are all UK Gilts. A life-long friend of mine lost £4K IN A FEW DAYS when her Financial Adviser suggested an investment in bonds issued by . . . Lehman Brothers just before the 2008 melt-down.
(*) pension funds are referred to as "pots" because of the alliteration. The BBC obviously employs a Poet-In-Residence. I can think of a more fundamental reason for the term "pot" in the context.
(**) Mine are all UK Gilts. A life-long friend of mine lost £4K IN A FEW DAYS when her Financial Adviser suggested an investment in bonds issued by . . . Lehman Brothers just before the 2008 melt-down.
No comments:
Post a Comment
I don't leave comments on blogs that use Word Verification. Ditto blogs which I know have Comment Moderation applied. Life's too short and I'm too busy makin' money and what the Hell are these people scared of anyway? If you don't like some creep's comment . . TRY DELETING IT! You have that privilege.
And I never read unpunctuated so-called poetry. I don't understand why self-styled poets think it's clever to make their work difficult to read/understand.