Author Archives: Richard Smith - Money Trainers

MoneyTrainers – January 2018 Podcast

As always – parental guidance – there maybe some naughty words up ahead.

Show notes – January 2019  Audio is linked below.

For many people – not having any money is the default position. JAM’s – just about managing, those living on the streets, relying on benefits – people moaning in the office, at the pub – never having enough, moaning about the rich – how unfair it is that they have all the money – you know, the ‘never enough to go around because…’ story that is often told.

The oldest books we have access to all talk about the issues around money.  The problem with that is we end up with a whole series of negative thoughts around money and I no the reason we have these negative thoughts is because people don’t understand the science around money. They don’t know how to make it grow and how to multiply it. Those that do understand the money is just a resource, like having food in the cupboard or wood for the fire.

Money only solves the problem that is caused by not having any money. It doesn’t solve any other problems.

Money is an amplifier, if you are in a bad marriage with no money. Having more money will not make your marriage any better. but it sure is likely to increase the strain within the relationship.

Having money inside a good marriage makes everything better. It’s like a massive boost, couple getting on OK money kicking around and do the things and by the things I want to do. Surely a perfect scenario great relationship plenty of cash.

For some reason money is the one thing that nearly everybody you meet struggles with. There are few people for some reason, that really get this money stuff. We have all sorts of words and sayings for it, money doesn’t grow on trees, I’d love to afford it but, there is never enough, money is evil.

One of the reasons I do the things I do, it’s not only because I understand how this whole money thing works but large sections of my community seem to struggle with this whole money issue, of course there are plenty of myths and misunderstandings around money and this is part of the problem. The other part of the problem is the lack of a decent money education. people think that this whole making it growing it allowing it to work for you money thing is just far too the reality is it snow harder than learning to drive the reality is it’s no harder than learning to drive a car or ride a bike or to cook a Sunday roast. But it is more akin to making a cake, see if you get all of the ingredients in the right order and use the right chemistry making a cake is really quite easy. getting things in the right order with the right chemistry around your money is an incredibly successful strategy and it’s possible for everyone to learn.

So what are the fundamentals around money.

Spend less than you earn.
Invest the rest.
Always invest for income.
Spread your investment risk.
Never invest solely for tax reasons.
Check, tweak and adjust.
Provided you follow these few steps you’ll be doing better than average.

It is just something that you can use.

Money doesn’t care it has no emotions it’s not interested in who owns it or who owns it. Yet it is a measure of success. I don’t think it’s a very good one because I’ve met plenty of miserable wealthy people. And surely having a successful life means a happy one. Just a thought not a debate.

There also seems to be a widely held belief that money is difficult to come by, difficult to manage and difficult to invest. This perception is pervasive, it’s all around us just ask members of family or the people you work with ask them tell you how hard it is to get and hold on to how to manage.

But that’s not the truth is it, plenty of people have managed to acquire a big pile of cash and use it to fund extremely happy lives. And provided you follow a few basic principles – what I call the science of money  You can enjoy the warm cosy glow of having enough coming in and enough money to live a life.

Before you go on, the next time you are out shopping try this. Find an item you were going to buy, before you drop it in basket, look around, is there are bog off available, a discount for two, an own-brand option – just being mindful about spending often shows up as a ten or sometimes twenty percent saving – you now have some money spare that you were not expecting to have – put that in a safe place – you can invest that at a later date.

Surprisingly there are a very low number of skills that are required in order to provide for a successful financial future.

Simple things.

Invest for income using low charge funds – charges are important.

Use the likes of Peer to Peer lending for some of your cash – returns from Funding Circle can be as 12%.

Invest in Government bonds and company bonds – these work like a loan, you make to a company or to Government

Always have some cash to invest – never ever be fully invested.

 

Learn how to trade your knowledge – if you are in a full-time job – then part-time.

Be careful with pensions – these are only tax-deferred not tax-free, charges eat up all of  any tax relief (get hold of my pension review letter if you are not sure)

Retail arbitrage – new to this one myself – basically means buying an item for a large retailer and selling it online for a profit. I’ve done a couple of sales recently – it’s an interesting model that I’m still learning.

In summary

Spend less than you earn

Remember that once a pound is spent it never comes back to you somebody else now has access to that pound and if they use it correctly it will work for them forever.

Only ever invest for income.

Always focus on the level of charges.

Always invest on the dips – you don’t have to buy that investment now, wait until it goes down in value.

Always make sure you manage your tax liabilities and use your allowances carefully. Note I said “use” not ignore.

If we start to consider carefully the difference between science and a belief, for example, you’ll quickly start to understand that a belief is simply an opinion that is held by an individual or a group of individuals that is not based on any scientific fact. Examples of this are the immunisation debate, whether or not childhood diseases are caused by immunisation and that the earth is flat.

I’m not saying that the belief in either is wrong but the belief is not supported by the evidence. Anti-vaxxers and flat-earthers are entitled to their opinion, and their belief but that does not make them right. The truth is that the world is in fact round like every other planet in the universe and vaccinations do save lives.

When it comes to money there is also a clear science behind making it and managing it. Without a doubt making money is rules-based and provided you adhere to the rules your money will continue to grow. There is an obvious science of money, provided you apply the rules of money science to your money you will get a result. It doesn’t matter who you are or how much money you have if you stick to the scientific rules of money you will end up with a result based on those rules.

Managing your money is a simple science. It’s based on facts and very specific rules. Quite simply apply the rules to your money and your life and you will end up with the result based on the science.

The reason many people on this planet live in poverty is because they don’t use the rules of the science in order to improve their financial situation. I know, that you will provide me with a whole load of comments and narrative in relation to this statement. Explain to me the reasons why poor people are poor, however, the evidence again seems to prove otherwise. There are plenty of people that have been born into abject poverty but have somehow managed to improve their financial situation.

The science behind improving your financial situation is very straightforward. It revolves around education, action and self-discipline. Provided you stick to the rules you will end up with a science-based result.

Money, like nature, doesn’t care about you or any other individual it has no biases quite simply provided you follow the rules of money you will end up with more than you need. Money will flow towards those people that follow the rules. this is the reason why we have a 1% population on the planet that is 1% of the population controls a large proportion of the overall wealth on the planet. Sure some of these people and companies have exploited their position, however, they has all applied the science of money in order to magnify whatever money they have had.

Money science tells us that we should get her money working for us rather than us working for it. Having your money working in the background whilst you do other things is money science. And a bit like every other form of science, it is ignored by many. If you want you can call these poor people. They ignore the basic principles of money. I spent a large chunk of my working life not understanding the principles, my parents never understood the principles. none of them ever had any money, and neither did I until I started to apply the money science.

if you are a bit of a cynic and you don’t believe me go have a look at your own personal financial situation, there is a good chance that you do not have sufficient money. That you do not have enough. this is all the evidence you need that you don’t have an understanding of the silence around money. You have not bothered to learn what is required and take the appropriate action. This is not complicated period this is science.


science /ˈsʌɪəns/ noun

the intellectual and practical activity encompassing the systematic study of the structure and behaviour of the physical and natural world through observation and experiment.


The last two lines of this simple explanation kind of sum up exactly what I mean. Observation and experiment, the great thing about these two is that all of the observing and experimenting has been done for you. you don’t have to learn and carry out these experiments they’ve all been done by somebody else in the distant past all you need to do is to copy them. Really it’s that straightforward.

All of the effort, all of the study, all of the observing has all been done for you period all you need to do is apply to your own circumstances and make the science work for you. It is now 2019, we have many hundreds of years of knowledge and experience behind us. We know what works.

In the same way we all know that not exercising and eating rubbish food along with smoking cigarettes and drinking alcohol will shorten our life. We know these things, they are facts. If you do any of these you all live a shorter life than those. Facts.

Money is no different, we know exactly how it’s made and how it works. for the same reason you wouldn’t feed your pedigree dog or champion horse on rubbish food, you shouldn’t feed yourself it either. Managing and growing your money is based on the same thinking, once you know what works you just do more of the same. you apply the rules in the same way you would apply the rules of food and healthy living to your pedigree pet.

Most people seem to be in an abusive relationship with their money, I think there is always more to come, I think it will all end up ok. the fact is it will if you plan for it and manage it properly once you understand the rules, the science you know what to do next.

These are the things that money trainers is about. When you are ready, get on my email list and I’ll update you with some further information and also the 2019 training dates. this is where we spend 2 to 3 months working together in order for me to educate you on the basic money facts, The science and you can start to do the same with your own money. Anti-vaxxers and flat-earthers need not apply.

You can find out some more on https://www.moneytrainers.co.uk/about or directly on https://www.moneytrainers.co.uk 

Contact me here >>

Update – Pensions – Deposit Accounts – Pensions Select Commitee

Christmas is close – however, there is an interesting shift in spending patterns with a lot of retailers seeing sales down and discounts starting early – I don’t think anyone should be surprised by that given the political situation – that just seems to be getting messier and messier.  Keep your eyes open for a bargain.

Meanwhile  I am speaking to clients that are giving…
Homemade gifts – pickles/oils and sauces.
Waiting for the sales to start
Gifting second hand/recycled items

All of these make sense for the environment and of course, save money. As we all know, once a pound is spent, that’s it gone, it never comes back and is not able to be used again by us.  If you get in the game of preserving pounds, one at a time your financial life will soon change.

Pension select committee links
Earlier in the year, I submitted my response to a Pension Select Committee. For some reason it rattled big chunks of the advice industry, mainly because I asked for clarity over pension charges. Especially over the disclosure of the true costs.

Remember this – if you have smaller than average pension fund (£30k) and charges of just 2% – lucky you – many pension contracts are far higher, the amount deducted from your pension fund will be £600 per year or £50 per month. Double that to £60k and the costs become close to that of the average UK council tax, treble that to £120k and your charges will be £1800 every year – roughly the lease cost of a new Suzuki Swift .

Go do the maths on your own fund, you’ll be surprised I’m sure.

The link to my response on the subject of pension charges – on the  Government portal is here.
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/pension-costs-and-transparency/written/88360.html – the link is not https – I have no idea why.

Pension review offer
If you’d like a review of your existing pension(s) I have a done for you service.https://www.thefinancezone.co.uk/product/pension-finder-and-review-service/ you can order online, it normally takes around four weeks to complete – most pension providers take three weeks to produce the information  – this review could be worth thousands of pounds and is currently discounted – until the end of December.

If you would like to do the whole thing yourself I have a template letter, usually £5.99 but at no charge to you. If you want it, drop me an email to richard@thefinancezone.co.uk  and I’ll send it back.

Link to previous newsletter covering interest rates 

Interest rates continue to be low, for those that missed my comments in the last email it’s linked below.

https://www.moneytrainers.co.uk?newsletters_method=newsletter&id=2

Rule of Seventy Two
I’m sure some of you will have heard of this before, once you start to get your head around how this works for you, you can immediately look at a potential investment and work out how good or how bad it is likely to be – roughly.

All you need do is take the number 72 and divide it by the potential return of any investment and you will end up with a rough number of years it will take for your investment to double.

Compounding interest is a wonderful thing and it is for that reason that I only ever recommend that any investment you make provides an income. Capital growth is never guaranteed and once income is paid it’s yours forever and can never be taken away. Unlike capital growth which will be removed as soon as the market falls.

This just leaves me to wish you a wonderful Christmas break, watch your money – no one else will.

Richard
www.moneytrainers.co.uk

PS there are a number of industry professionals on this list – I’ll be honest, no problems at all with that – but if you use any content without permission I will come knocking  – my bots are watching.

 

Inter generational wealth

 

It can’t be right that house prices go up in value more than earned income on an annual basis and that is tax free, or that the overall taxation advantages of owning your own property are – well, considerable.

Complete tax free growth during your lifetime and on sale and for most on death.

It can’t be right that those who rent and also pay taxes don’t get the same tax breaks.

But it gets worse for the non property owning taxpayer.

  • Help to buy is a home buyers subsidy there is no equivalent for those renting.
  • No VAT on new property sales is a tax break to builders and buyers and a cost to you the non property owning taxpayer
  • There is no capital gains tax on the growth in value of your home if you own
  • Even on death homeowners still win with an additional £150,000 tax free allowance (Inheritance Tax relief on main residence)
  • Selling off part of a garden is also exempt from income and capital gains tax

It can’t be right that today’s working youngsters – those under forty are forced to make contributions to the pension scheme of others – knowing that they will not benefit from a similar pension. Example of this, the State Pension, today’s National Insurance contributions pay the pensions of those currently retired. Like a PONZI scheme

There is only a limited fund in Government savings if any at all.

Many of the pensioners retiring and retired have enjoyed or will enjoy good final salary pension schemes – these have all but disappeared.

State employees enjoy a taxpayer supported Final Salary pension scheme, the liability of these schemes falls on future tax payers. Government is refusing to fund state pensions with a reserve of money – a proper pension pot. Yet it forces you to make contributions to your own pension pot – by law. You have no control over charges and limited control over the investments. It’s called auto enrolment.

It can’t be right that Student Loans are a £105bn liability that is now placed back on individual students in the form of loans. Those completing their further education before 1998 would have no loans to repay. The whole further education system was funded by taxpayers until then – it meant that the cost of a degree was little if anything.

[http://researchbriefings.files.parliament.uk/documents/SN01079/SN01079.pdf]

That means most of the current Ministers of Parliament would have secured a very low cost further education, along with all the people you meet over forty years of age that have a degree.

How does it feel having to repay some £50k of debt that many of the people you’ll be working with didn’t have that to find?

  • It can’t be right that you’ll have to fund the over forties pensions and additionally fund those working in Government departments well into retirement and cover your own education costs, along with being forced to make pension contributions – whilst not being able to afford your own home.
  • It can’t be right that it will be even harder to own your own home especially as your Student Loan restricts the amount you can borrow and in London – house prices are 14.5x salary across the UK it’s around eight times and in 2009 it was around five times (ish)
  • It can’t be fair for unearned house price profits to be handed down tax free to those few who made a decision to buy a property in the 90’s or before
  • It can’t be fair that under the Right to buy – under this scheme some fifty thousand – taxpayer funded properties were sold to tenants- at up to a seventy percent discount in the last nine years. When those under forty will have little or no access to an instant asset, like the right to buy
  • It can’t be right that those borrowers looking to invest in a property via BTL have a more generous lending criteria than those looking to fund a purchase as a main or only home

So how do we balance that up, how do we try and equalise all of that?

The government would have you believe that all we need to do is roll over and let things continue as they have done for the past 50 years, reality is that’s no longer working for most.

Evidence is all around – less than half of the population now own a property, prices in London are around 14.5 times income. They have never been so high. Importantly in places like Croydon there are hundreds of ovepriced flats available for sale, mothballed waiting for the market to return.

Most of these will be left empty, no one knows for how long.

For many years house prices sat around 4 to 5 times income, and at one time tax relief was allowed on interest payments. And then central government made a policy of selling off council homes under the right to buy and not building enough houses to cope with the population growth that it encouraged.

Population. It’s all very simple to blame it on the immigrants, but that is not the answer. If Government wants to grow a population by several million in a very short period of time it needs to make sure that infrastructure is put in place or we end up with a bubble, and a shortage. Ring any bells.

Good examples of this – shortages of GP’s and school places and a lack of housing. I guess I’ll continue that in another post.

There are several ways we can start to adjust the system. Government could allow any rental payment to be offset against income tax. Yep that’s right tax relief on renting. When you think that homeowners benefit from unlimited tax-free growth in the capital values this would be one way of balancing the whole thing up.

Sure many people would agree that there is unfairness in the system and this unfairness needs to be addressed however no Conservative or Labour government has so far wanted to deal with it. That is a potential problem and a problem that needs to be addressed by the taxation system at some point in the future, the unfairness doesn’t make sense. You are all told – the under thirties, under forties are important on one hand – then shafted by the system that has been created.

The status quo as it is cannot continue. I’m not sure why that conversation is ignored, I think Labour accept it as a hot potato and Conservatives are completely in support of their current policy – I have some of that in writing.

They seem to be happy to introduce taxation on spending and leave capital to be treated very fairly by the tax system, this of course benefits the half that own assets like a home and directly disadvantages those who rent.

If we consider carefully what happens in places like the United States of America where capital gains tax relief on main residences is allowed at a fixed figure. Sure you can benefit from tax-free growth from your property but the amount is limited as an allowance. The problem is as I see it, the UK government, successive UK governments have used the increase in property values as a feel good factor. Basically, Governments can do what they like provided house prices keep going up.

We could look at it from another perspective.

We could start to offer tax relief for those people purchasing, provided they are coming from rented accommodation, that’s even it up. The end sale could be taxed. They do it with pensions – tax relief currently costs £50bn per year.

We could immediately scrap right to buy, we could immediately scrap help to buy.

The answers it seems are unlimited the problem is inaction on behalf of our Government. It doesn’t seem to be that interested in fairness and balancing things up.

Pensions
If we look at those people that are currently drawing on a state pension, or a final salary company pension scheme we will find that they have been very well looked after by successive Governments and successive enhancements to pensions.

The final changes on this should have been the pensions triple lock which was introduced by the Conservative/ Lib-dem Government. This triple lock means that pensioners that are currently drawing on benefits will continue to be looked after for a very long time. This triple-lock actually paid for by current taxpayers. Many of whom will be under 40 and are unlikely to benefit from these enhancements. In fact those of you that are under 40 are likely to to see your pension benefits from the state reduced quite substantially. This is not an acceptable way to spread wealth.

It would seem that relying on any form of state benefit means that you will be substantially worse off than your parents and most certainly your grandparents. Obviously no intergenerational sharing going on there.

We also face a situation where your parents and grandparents had the option of well paid jobs that secured an above minimum wage income and also long-term security. What used to be known as jobs for life. These no longer exist for the under 40’s – these people are also being asked to contribute substantially more via taxation than their grandparents or parents.

Taxation has been increasing in recent years, despite the level of government borrowing which is also going up – we should question where the money is going? Importantly, any proposed Labour government is also saying that it will increase taxation I do hope it thinks very carefully about that.

Answers to that on a postcard please.

It does seem a bit of a mess that Government is increasing it’s borrowing and increasing taxation at the same time, yet doesn’t want to answer awkward questions about where that money is being spent. I can assure you that it’s not going to provide pensions for the under 40s.

Let me give you some answers to this, some answers that so far no political party wants to address. The Conservatives – want the current system to continue. They think it’s working. Labour wants to increase taxation – to spread the wealth, yet make no plans for equalisation of the system to treat all taxpayers more fairly. For example, it could focus on getting the environment right and tax accordingly. Or it could introduce taxation on main residences. both of which will introduce some fairness into the system but will make them unelectable.

There is a need for.

Fairness in the taxation system.

Fairness in relation to pensions.

Fairness in relation to capital allowances particularly those that relate to property.

Capital taxes favour those that have capital and these are also supported by tax-free growth on houses and inheritance tax breaks for those that have  one to pass on at death.  There are no such tax breaks given to the 50% of the population that is currently renting.

Suggestion here would be to limit capital allowances on a main residence. It cannot be right that in most market conditions you make more money from the growth and value of your property than you do from working, but only if you own one.

We also need to balance up the pension system, it does seem incredibly unfair that the liability being caused by today’s pension scheme members are going to be funded by future taxpayers. Successive Governments have so far failed to address all of these things and that needs to change. Sure there are some unpalatable things to consider, but the truth is the truth.

It’s the same as the alcoholic waking up to the fact that they can no longer have a drink, it may be incredibly hard – but it has to be done.

Comments welcome on this one.

Financial Services – What’s Changed Since 1988

 

I started working for the Prudential assurance company at the Holloway Road office, I thought that we were indeed living in very modern times. We didn’t quite have the level of technology you see nowadays, for example the office only had one computer. And that was kept covered most of the time.

There were no self invested personal pensions nor were there any form of peer to peer lending or borrowing – and we certainly didn’t have any of the more creative mortgages that are around today. Sure things were far simpler then, that said the overall thinking was exactly the same. Save some of your hard earned cash in an investment area that made sense and hopefully at some stage in the future you would be substantially better off.

There was no buy-to-let market, personal pensions had only just been introduced and we were right in the middle of a property market crash. Margaret Thatcher was the leader of the Conservative Party and therefore our Prime Minister we also had the satirical TV show Spitting Images every Sunday.

The Prudential was one of a number home service companies that had survived ever since the beginning of the century. Nearly every working class person had access to a trusted advisor that collected 4 weekly cash premiums on the doorstep. These were not loan collections – these were savings.

All of those that wanted it had access to someone that could provide them with financial advice and guidance. Sure the industry will hate me for saying that, however the system worked perfectly. The man from the PRU, or the Liverpool Vic or the Pearl were trusted and respected individuals the were all known locally.

So what happened? The marketplace moved on and most of these insurance companies were replaced by electronic and automated systems. Which meant the man from the PRU was no longer needed.

Ok, the products that sold then were never particularly competitive and certainly wouldn’t be considered in today’s world as being an ideal plan. But for many millions of people these savings meant that they had some cash available at some point in their lives which paid for children’s driving lessons and important birthdays, along with making sure that money was available for funerals and at various intervals holidays and high days. Unlike today’s enforced savings, money was made available at important intervals instead of a of at retirement.

The enforced savings we have available now – auto enrolment pensions, mean that payments are tied up until retirement date and can’t be accessed before age 55. And – certainly not the kind of investment you would make if you were looking to achieve financial independence before then, and certainly not making any sense when you consider it in light of the FIRE movement we have today.

The FIRE movement is a movement whose goal is financial independence and retiring early. The model is particularly popular among millennials, gaining traction through online communities via information shared in blogs, podcasts, and online discussion forums. From Wikepedia https://en.wikipedia.org/wiki/FIRE_movement

My working area for the PRU was concentrated in a tiny part of North London, the bulk of which was a handful of large council estates. I would guess that at least half of the residents had some form of arrangement with an industrial branch company. Which meant that at least half of the people living there had some form of long-term savings. Importantly at least half of the residents had access to a trusted advisor somebody that had financial experience and was able to assist with financial and technical expertise. Sure, there was always an element of sales. There always is.

Home Service
The home service model served the British Public for many years. I guess it just became too expensive to maintain and the contracts that were available started to look a little out of place in the modern world. And things move on, insurance companies needed to evolve just because it had worked for the previous 70 or 80 years didn’t mean it was going to work looking forward.

Advice on the doorstep.
I get the fact that times have changed however making sure that individuals could get access to financial advice in their own homes on a weekly or monthly basis just makes perfect sense.

Even if they had a particularly simple enquiry it could be answered, I had many clients that made notes and stuck them on the mantelpiece or inside the payment books. To make sure by asked the question when I arrived. If you compare that with what’s available now, you can pop over to Money Advice or even the main regulator site and if you are lucky they will be able to answer the question, the reality is any of the government sponsored sites are limited in terms of the explanation and of course are not interactive. Advice, on the doorstep may seem quaint now but for many it was extremely valuable.

Everybody who wanted it had access and in their homes.

Industrial Branch
The policies and plans that were arranged under industrial branch regulations were very simple, simple savings and investment products and simple life assurance products which paid sufficient for working-class customers and their circumstances. Many of these products had been available for decades and met the needs of most. There was never any need for complexity nor is there now. In fact the industry overcomplicates what are very simple matters.

What happens when you die? What happens if you live too long? All of these questions were answered by simple industrial branch policies and the man from the PRU.

When I first came into the financial industry, in 1988.

I  started working for the Prudential assurance company at the Holloway Road office, I thought that we were indeed living in very modern times. We didn’t quite have the level of technology you see nowadays, for example the office only had one computer. And that was kept covered most of the time.

There were no self invested personal pensions nor were there any form of peer to peer lending or borrowing – and we certainly didn’t have any of the more creative mortgages that are around today. Sure things were far simpler then, that said the overall thinking was exactly the same. Save some of your hard earned cash in an investment area that made sense and hopefully at some stage in the future you would be substantially better off.

There was no buy-to-let market, personal pensions had only just been introduced and we were right in the middle of a property market crash. Margaret Thatcher was the leader of the Conservative Party and therefore our Prime Minister we also had the satirical TV show Spitting Images every Sunday.

The Prudential was one of a number home service companies that had survived ever since the beginning of the century. Nearly every working class person had access to a trusted advisor that collected 4 weekly cash premiums on the doorstep. These were not loan collections – these were savings.  

All of those that wanted it had access to someone that could provide them with financial advice and guidance. Sure the industry will hate me for saying that, however the system worked perfectly. The man from the PRU, or the Liverpool Vic or the Pearl were trusted and respected individuals the were all  known locally.

So what happened? The marketplace moved on and most of these insurance companies were replaced by electronic and automated systems. Which meant the man from the PRU was no longer needed.

Ok, the products that sold where never  particularly competitive and certainly wouldn’t be considered in today’s world as being an ideal plan. But for many millions of people these savings meant that they had some cash available at some point in their lives which paid for children’s driving lessons and important birthdays, along with making sure that money was available for funerals and at various intervals holidays and high days. Unlike today’s enforced savings, money was made available at important intervals instead of a of at retirement.

The enforced savings we have available now  – auto enrolment pensions, mean that payments are tied up until retirement date and can’t be accessed before age 55. And –  certainly not the kind of investment you would make if you was looking to achieve financial independence before then, and certainly not making any sense when you consider it in light of the FIRE movement we have today.

The FIRE movement is a movement whose goal is financial independence and retiring early. The model is particularly popular among among millennials, gaining traction through online communities via information shared in blogs, podcasts, and online discussion forums. From Wikepedia https://en.wikipedia.org/wiki/FIRE_movement

My working area for the PRU was concentrated in a tiny part of North London, the bulk of which was a handful of large council estates. I would guess that at least half of the residents had some form of arrangement with an industrial branch company. Which meant that at least half of the people living there had some form of long-term savings. Importantly at least half of the residents had access to a trusted advisor somebody that had financial experience and was able to assist with financial and technical expertise. Sure, there was always an element of sales. There always is.

Home Service

The home service model served the British Public for many years. I guess it just became too expensive to maintain and the contracts that were available started to look a little out of place in the modern world. And things move on,  insurance companies needed to evolve just because it had worked for the previous 70 or 80 years didn’t mean it was going to work looking forward.

Advice on the doorstep.

I get the fact that times have changed however making sure that individuals could get access to financial advice in their own homes on a weekly or monthly basis just makes perfect sense.

Even if they had a particularly simple enquiry it could be answered, I had many clients that made notes and stuck them on the mantelpiece or inside the payment books. To make sure by asked the  question when I arrived. If you compare that with what’s available now, you can pop over to Money Advice or even the main regulator site and if you are lucky they will be able to answer the question, the reality is any of the government sponsored sites are limited in terms of the explanation and of course are not interactive. Advice, on the doorstep may seem quaint now but for many it was extremely valuable.

Everybody who wanted it had access and in their homes.

Industrial Branch

The policies and plans that were arranged under industrial branch regulations were very simple, simple savings and investment products and simple life assurance products which paid sufficient for working class customers and their circumstances. Many of these products had been available for decades and met the needs of most. There was never any need for complexity nor is there now.  In fact the industry overcomplicates what are very simple matters.

What happens when you die? What happens if you live too long? All of these questions were answered by simple industrial branch policies and the man from the PRU.

Regulation

When regulation first arrived in 1988 and the industry was forced to separate into tied and independent advisors, there was a flurry of activity. And the likes of Abbey life and Allied Dunbar continued to promote their high priced and expensive products to support a BMW/Mercedes driving sales force. both of these companies should have been regulated out of existence –  that said they still exist but under a more modern look. Consumer choice is one thing…

Cost of regulation

Despite years and years of regulation we have seen mass mis-selling still continue in fact the level of Consumer Protection now seems to be not much more than it was in 1988. the costs of regulation are met by the product providers, these are funded by the profit from the sale of products, therefore it is the consumer that ultimately pays for its own regulation.

There is a perception that the financial regulators are good at what they do  – the reality is much of the work from the various regulators that has overseen more and more bad stuff going on.

For some reason they seem powerless to stop it. even advisors that were fully regulated and authorised by modern regulators have mis-sold on a massive scale. Along with fraudulent activity.

That’s more than a bit mad it is not acceptable and should never happen in a modern regulated financial services industry.

Old School Stuff

There are  any number of aged principles when it comes to managing money. None of this is taught in schools, none of it forms part of a curriculum in any educational establishment. There is no GCSE in Money Management.  It seems that a financial education can only be learnt once you are outside of the mainstream schools – sure I get that fact that money items are on on some curriculums.

There are a number of principles in relation to money and money management and these will probably be reduced down to 8 or 9 separate points in  a Moneytrainers seminar or workshops.

I work with these financial principles which crossover, or as I prefer – dovetail. By making sure you work with and adhere to these principles you will be able to leverage your money so that it works for you rather than it working for everyone else.  Simple things like comparing Building Society accounts on a regular basis make so much sense yet so few actually do the work.

It’s for these reasons that I work with people to make sure they understand what it is that makes the difference and how to ensure that your money works for you.

What’s Changed

In this modern life, this modern world we live in, access to information is everywhere.  What used to be made privy to just a few is now available to everyone. The changes we have  seen in the last 5 years have been dramatic with information and high quality guidance along with low-cost products on widely available — being your own financial advisor is now so easy and so straightforward.

And in support of the DIY approach we have information coming out of the financial independence movement (see FIRE above)  which is starting to transform the lives of those working with it. Being financially independent at age 35 or 40 he is now possible for everyone, sure you might need to do a little bit of work in order to get there. But it’s certainly achievable.

This financial Independence was not really achievable as a DIY option 20 or 30 years ago but it’s certainly available now and using money as a leverage tool to improve your personal financial situation is a must-do. Even if you don’t attain independence in your 20s and 30s being financially independent in your 40s or early 50s is something to aspire to.

Can you imagine not having to go to work from age 40 to 43, can you imagine having sufficient income from your investments in order to be able to live the life of your dreams and only  work 1 or 2 days per week? Hold on to that thought for a moment.

It really is achievable and many hundreds of thousands of people are already doing it.

If you are ready  get moving on this, get in touch and I’ll explain how you can do it and how easy it is.

 

Pension Transfers | Pension Scams | Pension Advice – New Way

In August of 2018 the Pensions Ombudsman upheld a complaint from a policeman after he had transferred his pension from the police scheme to scammer without the scheme carrying out adequate checks.

http://www.pensions-expert.com/Law-Regulation/Ombudsman-s-police-ruling-highlights-trustee-duty-of-care?ct=true

Now, on the face of it you could say that that was an acceptable approach from the scheme, in that a formal request submitted by the member in order to transfer benefits from one scheme to another should be processed, and that they [the scheme] should accept that request and move the funds.

Considering it further, the trustees of the scheme do have an obligation to the member in order to ensure that the funds and benefits they hold on behalf of that member, are managed correctly. And in accordance with the normal rules and regulations that go with this type of scheme. Is it fair to expect the trustees to be ‘trusted’ to make sure that any transfer made fits with this obligation? As the ombudsman ruled.

My view would be that, they do have some responsibility and a duty of care. The Pension Ombudsman agree.

The Police Pension Scheme (PO-12763)

But we have a problem, we have a problem with bad guys and bad firms attempting to transfer money away from all kinds of pension schemes in order to defraud the members of their pensions. Despite 30 years of regulation we have seen that the bad guys continue to get away with their bad actions. Indeed Government has recently announced bans on cold calling in order to prevent some of these bad transfers, the reality is we still don’t have a proper ban in force and many more individual members of pension schemes will end up losing money.

https://www.gov.uk/government/consultations/ban-on-cold-calling-in-relation-to-pensions/ban-on-cold-calling-in-relation-to-pensions-consultation-on-regulations

There is also the issue of woefully inadequate enforcement in the event of a transfer. When these dodgy transfer businesses are finally caught, it ends up with a major paperchase which it seems few police forces are able to cope with and the attitudes towards white collar crime mean that a lot of these people [bad guys] get away with it. The National Crime Agency reports that it’s working with regulators – yet very little seems to be done – limited action.

http://www.nationalcrimeagency.gov.uk/crime-threats/fraud

Project Bloom also seems to be woefully inadequate in reporting on these matters and clearly not estimating the size of the problem correctly, based on it’s own assumptions.

https://www.parliament.uk/documents/commons-committees/work-and-pensions/Correspondence/Letter-from-Chief-Executive-The-Pensions-Regulator-to-the-Chair-relating-to-Project-Bloom-13-November-2017%20.pdf

In February 2017 the Pensions Regulator even called for a Safe Schemes list.
https://blog.thepensionsregulator.gov.uk/tag/project-bloom/

Fact is this important and no doubt expensive project has been around for a number of years and delivering very little.

I have been approached by several campaigners on this matter in recent months and the evidence is frightening, these firms are transferring pension business and committing crime on an industrial scale. This is not some backstreet firm, it’s organised and professional.

When I submitted my returns to the Pension Select committee a few months ago one of the things I suggested was that we should make the various regulators a bit more responsible for what is actually happening here. Now I know that passing the buck to pension scheme trustees or to the pension regulator may not be the right answer. That said we have a particular problem, we have a problem where lots of individuals are losing big chunks of their hard-earned pension money.

My suggestion is we consider very carefully the obligations that trustees have in order to make sure pension money is protected and that it goes to the right place if moved. We also make sure that any advice provided is, either second guessed by a third party advisor or actuary. Or indeed it is signed off or accepted by the trustee as being a legitimate transfer. So far this year we’ve seen more pension mis-selling and poor advice in relation to pension transfers – despite pressure from the regulator – nothing seems to change.

So, here goes.

The Implementation a very straightforward traffic light system – red yellow green. Would help consumers, this would follow an assessment by a third party adviser/actuary/pension transfer specialist – and would consider the receiving provider along with (potentially) other issues. The benefit of this would be to put in place  further checks on the quality of advice that is being provided but also to make the bad guys consider very carefully and understand that there is a checking process in place and they will have to deal with.

There is not an advisor in the country that should be concerned about having a third party check on their advice and to be under external scrutiny. Importantly, by transparently providing an additional check on their advice to a member of the public should make everyone feel a lot more comfortable.

The truth is, on this matter Government and law enforcement seems powerless to be able to protect individual pension scheme members from the scammers. I would suggest therefore that the industry picks up the baton and puts in place its own systems of checks and balances to ensure the individual members are protected. It has everything to gain and little to lose.

I doubt the industry will because it feels that it has enough to do – but if the pension transfer side of personal finance wants to be credible in the eyes of the public and doesn’t want to face future regulation it should act now.

Ban Commissions
An end on commission income based on fund value for pension transfers (yeah I know the industry calls them fees – however fees are traditionally paid direct, by the customer, not from the value of the investment), a simple allowance for advice paid directly from the scheme. Puts advisers on a par with other professionals and means some of the bad guys won’t be able to function.

The legislation is already in place, just needs extending and promoting.

Also means that members can get access to high-quality advice without having to find the costs of advice upfront.

There are many ways to deal with these issues and we know that under the current system, for some reason change will not be coming soon enough – which means there needs to be an alternative. At the moment, the industry ain’t looking that good and the bad guys are still getting away with it – so something needs to change.

Alison Average – average income, average taxes – not a lot left.

Alison Average – Just an Ordinary British Girl

Let me introduce Alison, she was wondering where all of her money went on a monthly basis, we helped her by showing how her lifetime would look if she did nothing. Her lifetime spend and taxation is below.

Alison Average was twenty years of age on the 18th January 2016. Her working life will be 48 years. Assuming she continues working she can expect to get £115 per week from the State Pension Scheme, starting on the 18th January 2064.

Alison works in an average job for average pay of £26,500. This means that over a lifetime she will earn £1,272,000. It’s likely to be substantially more than that, inflation and job progression etc will help to boost her lifetime earnings. She should be pleased with that, a lifetime millionaire – only it’s paid in instalments.

Ordinary people like Alison don’t get to keep all of their income. Some of it will be taxed and other bits forced into pensions; she also has living costs to find, she is the same as you and I.

After Income Tax and National Insurance Alison gets around £1758 per month, however her gross pay is £2208.33 per month, which means £449 is deducted before she gets it. Over her working life she gives to the government via taxes £258,624.

She did not opt do a degree or she would have had to fund the costs of that, and could have had £50,000 in debt to repay.

Alison does not have the means to buy a house on her own she could not afford one. But she has found a flat which is ideal, but she has to travel into London – it’s not possible to find a flat within walking distance of her work. She will have a season ticket cost of £1600 per year, or £76,800 over her working life.

She decides to buy the flat at £145,000 with a mortgage via one of the major high street lenders, she borrows 95% (£130,000). Her mum helped out with the deposit.

Monthly cost assuming interest rates remain the same is £685 which means she will pay back around £205,000 over the life of the mortgage, and pay around £1,000 per annum in Council Tax over her remaining working life, if Alison lives to average age (81.5) she can expect this to total over £61,500.

As she is buying her own home, she will also have to find Stamp Duty. Assuming she only moves three times during her lifetime than she’ll have to find another £7500 or so (assuming she buys at current prices). Of course if she is lucky enough, saves and invests wisely then she could end up investing in property (one strategy that works) under the new rules for stamp duty she could be substantially more.

Her mum got her a car for her birthday, and she spends around £20 every week on fuel, visiting family and her boyfriend. Based on an average of £80 month (£960 per year), she has to pay Fuel Duty at 57.95p per litre, and of course VAT. Fuel Duty is £556.32 per year and VAT making up another £192 every year. Over Alison’s working life that makes around £36,000 in additional taxation.

Alison also drinks the odd glass of wine with her friends; she’s not sure but thinks it’s around the government guidelines which is two 750cl bottles per week, meaning the total Wine Duty cost is about £5.50 per week or £13,728 over her working life.

She does have some other expenses, and Alison spends around £300 per month on food and clothing. Most of which has VAT added. She’s not sure of her itemised spending but she thinks most of it has VAT added, so around £60 per month goes to the Treasury. £34,560 over her working life.

A few years ago she went on a very nice holiday and she put the cost of this on her credit card which leaves her with just half of the UK average debt of £4500. This is likely to be paid off over the next ten years or so if she doesn’t spend any more on it (based on average repayment times). The current interest rate on her card is 18.9% and if she makes the minimum payment she should clear the balance completely in around 31 years, and pay £6350 in interest.

There are some incidental taxes, and these should be considered. Her home and car insurance has insurance premium tax (IPT) added at 9.5%. Alison pays £900 for her car insurance and £400 for home contents, making £123.50 per year or £5928 over her working life.

Another incidental is the effect of VAT on home energy, as Alison is conservative user she only spends £104 per month on both, however the vat is £5.20 per month or £2995 over her working life, increasing to £3837 over her lifetime.

Consider another of Alison’s additional payments – her pension. It’s likely she will be poorer to the tune of about £100 per month by making a pension contribution, however based on the level of charges (assumed 2%) she could expect to lose around 20% of her fund every ten years.

Noting that if her pension fund ends up as nothing because of poor investment returns there is no recourse on the state or the company – she would have some comeback for just about every other consumer purchase, but very little for pension non performance.

Despite various searches around the Government portals like Money Advice Service and the Financial Conduct Authority, the Pension Advisory service it’s not possible to clearly clarify the impact of charges, those sites that should offer calculators don’t. If she opts for Pension Freedom her overall charges will increase substantially.

There are a number of things Alison Average can do to help with the amount of tax she pays, and by arranging her finances differently she could be saving many tens of thousands of pounds over her lifetime.

If Alison saves at least some of her money for her use rather than for everyone else to use – spent money is enjoyed by others and not by you; she could…

Take longer holidays, perhaps a month off every year in the middle of winter.
· Take mini breaks of a couple of months every couple of years, like a mini retirement.
· Not worry about the pressures of work.

Even if she manages to build up as little as two years salary, invested this will make a massive difference to her pre zimmer and post zimmer life.

Don’t forget, if you want some angles on this – get on my email list. It’s got a shit load of stuff you should know.

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Meanwhile, you’d better note that your personal information ain’t ever shared or loaned.

Is this just real life or is it just fantasy…

In this article,  a big apology for stealing Freddie’s lines from Bohemian Rhapsody and some comment which I originally provided for my private group of Ninja – Money Makers. It’s a short story about life and the shizzle we all live through.

Meanwhile – Itunes has signed off the Moneytrainers Podcast – no mean feat given that podcasts are now an ‘in’ medium.

Here it is.

Sorry Fred.

So here we are, another Friday night has arrived and you’re pleased the week is finally behind you. Tomorrow is Saturday – a day off . You are feeling really pleased about that. The job is driving you absolutely mad and the weekend is far too short. On Friday you’ll have a few beers too many.

And on Saturday, you’ll wake up slightly hungover, to the point of you having a lay in for a few hours. On Sunday you spend the whole day mithering and dreading what’s going to happen on Monday when you return back to the office, only to find that nothing has changed, and you have an entire week ahead of you.

Next week is going to be very much like the last week and the week before that and the week before that. Let me ask you how many weeks has it actually been like that? Perhaps there’s even a better question to ask and that’s how many weeks are you going to let it continue, how many weeks months or years are you prepared to wait for it to change?

One of the hardest lessons I’ve learned is that actually it never changes, well not for the better. It just continues, and feels like it’s working against you. I always thought that working hard learning some new skills keeping my nose clean, doing the right thing will always serve me well. Well that’s what I was told by my parents and my grandparents, it seemed to work for them.

The truth. Just look around – just look at your life, just look at how you spend your money, the things you do. Just think about it for a few minutes, consider carefully exactly what is going on and try and observe in a mindful way how your life really is, what’s actually changing. What’s actually going on. If you are anything like many people out there including your friends and work colleagues you’ll find that nothing really changes week in week out and you end up doing the same things time after time. Visiting the same pubs, with the same people, to the same restaurants the same local park.

We are creatures of habit, we like doing the same things at roughly the same time. That is the human way. the problem is our brain makes us do that on autopilot, we rarely stop to think about all of our actions and end up just going through the motions mindlessly not really noticing.

Of course if that’s the life you want then that’s fine. Problem is, change is coming whether you like it or not and if this is not change that you want then it will of course be negative. It will have a negative impact on your life because it is not what you wanted. That is what happens when change comes.

And the important thing for you to note is this, you can either accept the changes that are put on you by everyone else – not having your own plan. Or you can take control of the changes and make them for yourself.

I have to remind you you are not a tree you can move and change and adapt. You really don’t have to accept what is put in front of you, you can say no, you can reject it you can make your own plan. Lots of you can in there which of course does not mean you will it just means you have the option.

It was the great Richard Wilkins that reminded me one of the most important things to remember about life is this. Given the background we now have with levels of depression far higher than ever and anxiety causing more and more stresses on the human mind and body we need to be aware of number of different things.

This idea from Richard Wilkins is something that just makes sense.
He explained…

Life really is like a beach, the tide comes in the tide goes out and that is life. Sometimes we’re on a high, and the tide is in life is good, things are plentiful and at other time’s the tide is out and things have changed. These things don’t last forever, because the tide is out it doesn’t mean you shouldn’t be content. Whether the tide is in or the tide is out this is life, you have to live it and accept it for what it is and make the changes and adapt accordingly.

The the tide coming in or out who is not targeting you personally it just is it’s the tide. Bad things in life don’t happen to you, they happen to all of us. That doesn’t mean you should feel unhappy or depressed about that you just need to accept it and acknowledge the fact that this is the way life is and be content and happy. And look for the positive stuff.

Because life on the beach, is still life on the beach. No matter if the tide is out or the tide is in, no matter whether the sun is shining or it’s raining. You can’t have every day of positive blessings and sunshine, everything is a cycle and if you try and upset that cycle it ends up as a mess which is why accepting the tide in or the tide out is such an important tool to have in your armoury.

Contentment, just being, living at this moment in time means you are incredibly lucky. Tide in or tide out just live it for what it is.

Let me ask if you’re in your 20s or 30s now and you’ve just read the above? If you even remotely feel anything like the first couple of paragraphs – you’ve got a fairly serious problem. If you don’t solve that you are going to face the next 40 or more years dealing with that same shit. There is also the grave danger that if you do nothing about it, you’ll end up hating yourself, which means drinking more than you should, numbing your senses in some other way either way you’ll not be living the life that you deserve.

Sure it’ll be inter-spaced by the purchase of a house you can’t afford, with the spare bedroom and garage that you’ll never use. The new relationship perhaps even marriage and children. You may even have a few expensive toys and a couple of weeks off in the summer along with a couple of city breaks if you’re lucky.

There’s a good chance you’re going to end up drinking too much and you’re going to be 40 something, and you going to be overweight, you’re going to be up to your neck in debt with credit cards and short term borrowing and you gonna have a pile of shit they call the pension.

I’ve had both of my in laws in nursing homes. When you visit, all you see is sad regret on their faces.

Fact is it comes all too quickly, but here is another side to the story, what happens traditionally is the financial services industry and your employer will convince you that you need to be paying as much money as you can into your pension, yet you know you’re going to be close to death before you can get anything from it. So let me ask you the question

Do you really want to trade the best bit of your life for the poxy Monday to Friday grind in return for a pension you can’t get until three quarters of your life is over?

If that’s what you want that’s fine I can’t help you all I can say is the best of British.

But you know what there are alternatives. There are options, it’s 2018 for fuck sake it’s not 1955. You don’t have to put up with the shit, you don’t have to put up with the grind you can actually start to make things work for you rather than you having to trade your life for a promise for something that may never deliver and if it does you’re likely to be half dead. You will certainly be very close to death.

I’m on a mission to make sure that my kids don’t live a life like this. I’m on a mission to make sure that everyone I meet knows that there is an alternative and then at least then you’ll have a choice. If you know that something else is out there and you still decide to carry on as you are that’s up to you. But don’t let ignorance of the alternatives, of the options hold you where you are.

The internet has not delivered fully for us yet, sure we have a few handy apps and we have one or two social media platforms – but the truth is the internet is something that is so fantastic. And had it been available in the past our parents would have led vastly different lives. Indeed the lives we lead now could be so fantastic if we decided to use the internet and the social platforms for our own goals. Instead of watching pictures of cats and puppies.

This whole thing- financial independence can’t be done using old school thinking and old school methods – these are history the world has changed dramatically you might not feel it yet, but I can assure you it really has.

As I keep saying, for some strange reason the investment professionals the financial services industry is not keen to talk about most of these subjects because they want things to stay the same. The reality is the world has changed and changed dramatically in recent years.

The key from your point of view is this. Do you want to sit back and be fucked over by the rest of the world, by the pensions industry, by your employer or do you want to take your life by the scruff of the neck, vigorously shake It learn some new stuff and end up financially independent and free of the man who has his foot on your neck. See the world is changing whether you like it or not, whether you want to be a part of it or not it is changing.

Back to this man who has his foot on your neck, you know the guy, the one that does your personal review once every 3 months, reminding you – you must try harder, you must be better, with you always saying – fuck you under your breath. The man has always been there, the man will always be there, and the key from your point of view is how long do you want to continue with his foot on your neck?

I’ll be honest with you I’m just working through the final answers to all of this, but I am trying to grow a team of money Ninjas that are looking to use everything they can to leverage a lifestyle to leverage their money to leverage what they know and to live very different lives. It is based on the thinking that here is no point in waiting until you are half dead before you start to enjoy it

Financial freedom, personal freedom is to be enjoyed now not later.

So come over and join me join me on this journey let me show you some tools that you can use, things you can do to make your life, your finances far better than they have ever been before.

More importantly let me show you how you can get these things working for you.

As I’ve said before, you do have a choice with these things, you can either sit back and hope that things will get better, hope that things will pan out, hope that you inherit some money win the lottery.

Good luck but the chances are it won’t happen and I know for sure that with the stuff I’m doing you’ll have a far better chance of success , if not you’re at least learn some stuff and know how to begin the process of leveraging what you have and what you know but for your benefit not for the benefit of others.

If that sounds a little selfish, on one hand it is meant to be, on the other having time freedom, having some leverage means you will at least have a good deal more time to solve some of the other problems this planet is facing, like the political and environmental issues we are going to have to deal with.

If you are not on the list, you can do get on it below.

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Money and 1998 – Advice Has Changed A Lot

When I first came into the financial industry, in 1988.

I started working for the Prudential assurance company at the Holloway Road office, I thought that we were indeed living in very modern times. We didn’t quite have the level of technology you see nowadays, for example the office only had one computer. And that was kept covered most of the time.

There were no self invested personal pensions nor were there any form of peer to peer lending or borrowing – and we certainly didn’t have any of the more creative mortgages that are around today. Sure things were far simpler then, that said the overall thinking was exactly the same. Save some of your hard earned cash in an investment area that made sense and hopefully at some stage in the future you would be substantially better off.

There was no buy-to-let market, personal pensions had only just been introduced and we were right in the middle of a property market crash. Margaret Thatcher was the leader of the Conservative Party and therefore our Prime Minister we also had the satirical TV show Spitting Images every Sunday.

The Prudential was one of a number home service companies that had survived ever since the beginning of the century. Nearly every working class person had access to a trusted advisor that collected 4 weekly cash premiums on the doorstep. These were not loan collections – these were savings.

All of those that wanted it had access to someone that could provide them with financial advice and guidance. Sure the industry will hate me for saying that, however the system worked perfectly. The man from the PRU, or the Liverpool Vic or the Pearl were trusted and respected individuals the wereall known locally.

So what happened? The marketplace moved on and most of these insurance companies were replaced by electronic and automated systems. Which meant the man from the PRU was no longer needed.

Ok, the products that was sold where never particularly competitive and certainly wouldn’t be considered in today’s world as being an ideal plan. But for many millions of people these savings meant that they had some cash available at some point in their lives which paid for children’s driving lessons and important birthdays, along with making sure that money was available for funerals and at various intervals holidays and high days. Unlike today’s enforced savings, money was made available at important intervals instead of a of at retirement.

The enforced savings we have available now – auto enrolment pensions, mean that payments are tied up until retirement date and can’t be accessed before age 55. And – certainly not the kind of investment you would make if you was looking to achieve financial independence before then, and certainly not making any sense when you consider it in light of the FIRE movement we have today.

The FIRE movement is a movement whose goal is financial independence and retiring early. The model is particularly popular among among millennial’s, gaining traction through online communities via information shared in blogs, podcasts, and online discussion forums. From Wikepedia https://en.wikipedia.org/wiki/FIRE_movement

My working area for the PRU was concentrated in a tiny part of North London, the bulk of which was a handful of large council estates. I would guess that at least half of the residents had some form of arrangement with an industrial branch company. Which meant that at least half of the people living there had some form of long-term savings. Importantly at least half of the residents had access to a trusted advisor somebody that had financial experience and was able to assist with financial and technical expertise. Sure, there was always an element of sales. There always is.

Home Service
The home service model served the British Public for many years. I guess it just became too expensive to maintain and the contracts that were available started to look a little out of place in the modern world. And things move on, insurance companies needed to evolve just because it had worked for the previous 70 or 80 years didn’t mean it was going to work looking forward.

Advice on the doorstep.
I get the fact that times have changed however making sure that individuals could get access to financial advice in their own homes on a weekly or monthly basis just makes perfect sense.

Even if they had a particularly simple enquiry it could be answered, I had many clients that made notes and stuck them on the mantelpiece or inside the payment books. To make sure by asked the question when I arrived. If you compare that with what’s available now, you can pop over to Money Advice or even the main regulator site and if you are lucky they will be able to answer the question, the reality is any of the government sponsored sites are limited in terms of the explanation and of course are not interactive. Advice, on the doorstep may seem quaint now but for many it was extremely valuable.

Everybody who wanted it had access and in their homes.

Industrial Branch
The policies and plans that were arranged under industrial branch regulations were very simple, simple savings and investment products and simple life assurance products which paid sufficient for working class customers and their circumstances. Many of these products had been available for decades and met the needs of most. There was never any need for complexity nor is there now. In fact the industry overcomplicates what are very simple matters.

What happens when you die? What happens if you live too long? All of these questions were answered by simple industrial branch policies and the man from the PRU.

Regulation
When regulation first arrived in 1988 and the industry was forced to separate into tied and independent advisors, there was a flurry of activity. And the likes of Abbey life and Allied Dunbar continued to promote their high priced and expensive products to support a BMW/Mercedes driving sales force. both of these companies should have been regulated out of existence – that said they still exist but under a more modern look. Consumer choice is one thing…

Cost of regulation
Despite years and years of regulation we have seen mass mis-selling still continue in fact the level of Consumer Protection now seems to be not much more than it was in 1988. the costs of regulation are met by the product providers, these are funded by the profit from the sale of products, therefore it is the consumer that ultimately pays for its own regulation.

There is a perception that the financial regulators are good at what they do – the reality is much of the work from the various regulators that has overseen more and more bad stuff going on.

For some reason they seem powerless to stop it. even advisors that were fully regulated and authorised by modern regulators have mis-sold on a massive scale. Along with fraudulent activity.

That’s more than a bit mad it is not acceptable and should never happen in a modern regulated financial services industry.

Old School Stuff
There are any number of aged principles when it comes to managing money. None of this is taught in schools, none of it forms part of a curriculum in any educational establishment. There is no GCSE in Money Management. It seems that a financial education can only be learnt once you are outside of the mainstream schools – sure I get that fact that money items are on on some curriculum’s.

There are a number of principles in relation to money and money management and these will probably be reduced down to 8 or 9 separate points in a Moneytrainers seminar or workshops.

I work with these financial principles which crossover, or as I prefer – dovetail. By making sure you work with and adhere to these principles you will be able to leverage your money so that it works for you rather than it working for everyone else. Simple things like comparing Building Society accounts on a regular basis make so much sense yet so few actually do the work.

It’s for these reasons that I work with people to make sure they understand what it is that makes the difference and how to ensure that your money works for you.

What’s Changed
In this modern life, this modern world we live in, access to information is everywhere. What used to be made privy to just a few is now available to everyone. The changes we have seen in the last 5 years have been dramatic with information and high quality guidance along with low-cost products on widely available — being your own financial advisor is now so easy and so straightforward.

And in support of the DIY approach we have information coming out of the financial independence movement (see FIRE above) which is starting to transform the lives of those working with it. Being financially independent at age 35 or 40 he is now possible for everyone, sure you might need to do a little bit of work in order to get there. But it’s certainly achievable.

This financial Independence was not really achievable as a DIY option 20 or 30 years ago but it’s certainly available now and using money as a leverage tool to improve your personal financial situation is a must-do. Even if you don’t attain independence in your 20s and 30s being financially independent in your 40s or early 50s is something to aspire to.

Can you imagine not having to go to work from age 40 to 43, can you imagine having sufficient income from your investments in order to be able to live the life of your dreams and only work 1 or 2 days per week? Hold on to that thought for a moment.

It really is achievable and many hundreds of thousands of people are already doing it.

If you are ready get to moving on this, get in touch and I’ll explain how you can do it and how easy it is.

You can get on my email list below, it’s full of interesting and cutting edge financial stuff you can use – not your normal bollocks.

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Podcast October 2018 – Introduction – making money work

Welcome, to the very first podcast in this brand new series. I’ll be talking about money. Making it, preserving it.

 

There is a lot more to come – subscribe and you’ll automatically be notified as new stuff becomes available. Enjoy.