This money stuff can be a royal pain the backside if not managed properly. And like anything else in your life, if it’s not managed it soon turns into a bit of a mess. With that in mind I thought I hand out a couple of tips – that make more sense in 2020 than they ever did.  

The good news is, they have been around for years. Aeons in fact. They have been around for so long most of the financial industry has forgotten them.  

So not for the first time.  

Spend less than you earn and invest the rest. Simply keep an eye on your expenses, monitor and review. Spend mindfully – think about what you are about to do. Apply the sound mind test – do I really need [insert item] today, can it wait? If there is any doubt, make a note in your journal (you do have one, right?) And see if that [item] is still needed in a week or so’s time. 

You can only ever reduce your spending down to an x figure. Whatever your x is will depend on your lifestyle and your spending patterns. But you can improve your income exponentially to whatever amount you want it to be. Your leverage, your best option is to reduce spending or at least review spending but focus on improving income in whatever way you can. 

When considering how you should put your money to work, always opt for something you understand, and if you don’t understand something then Google is always your friend. Also, if you can’t explain it in full to your elderly mother or to a seven-year-old – it’s probably bollocks. Like Bitcoin or derivatives.  

Invest only for income. When you are looking around to make the most of your money, you will see things like – annual interest/monthly interest – always go for monthly. You will see things like income/growth funds – it’s always income.  

You will see charges compared – investment charges are one of the only things you can control. We have no idea about the future investment performance of x or y investment – it is simply an unknown.  Which means there are just two things you can control… 

Charges – normally expressed as an annual fee, annual charge. Total Expense Ratio will give you a guide, that should be accurate.  But remember it makes assumptions about future trading expenses and can be wildly inaccurate. You may also see ‘ocf’ which is the ongoing charge %, you may also have ongoing fees levied by the provider, adviser. All of which eat into your investment.  

Examples of this are TER of 1.8% Adviser fee .5% making a total of 2.3% per annum but normally deducted monthly. Over a ten year period that’s at least 23% of your investment being dragged along a hedge.  

Note especially that if you invest in a pension or an individual savings account you may have additional product fees of .25% (often more) making your annual costs 2.55% of your fund – over ten years more than a quarter of your fund.  Charges are important.  

Timing The Market – Buy on the Dips. So you are in the market for apples. Not sure if you should buy them now or wait. Investing in anything is a decision you make, when you are ready – unless you really want to eat apples now in which case the market, not you decides the price.  Let’s accept you are not in a hurry.  

At the moment apples are £2.40 per kilo and if you buy (invest now) your £100 investment will buy (100/2.40) or 41.66kg when you come to sell these later on at £2.60 per kilo your sale proceeds are £108.33 (and eight percent return) of course less the costs of storing (managing) the apples. 

Still with me.  

Now, the market for apples fluctuates over the year and it’s possible that you can buy them for as low as £1.90 per kilo or as high as £2.95kg. Key is, you and I don’t really know when the price will be right, but we know that often the price of apples dips and with some great storage facilities available you can be sure that buying now when the price is a little lower makes sense. 

Going back to the £2.40kg price and your £100 investment. You have a Google alert set up and you are notified that the “market in apples dropped yesterday” and you login into your online platform and see that today, apples are priced at £2.30kg and you decide to invest £100 you now own 43.47kg of nice juicy apples.  

A few weeks later the price fluctuates up and down.  A solid fall in the price of apples means that you invest a further £100 at 2.10 per kilo (47.61kg). You now own 91.08kg.  

You decide to hold on to the apples in the value rises, later on in the year a Google alert tells you that the apple price is up and they are now at £2.66 per kilo and your investment is worth or £242.27. 

Investing (buying) when markets have fallen is one of the easiest ways to invest and secure a better return on your investment. You never have to invest today, why would you when you know for sure that the market price fluctuates.  

Asset Allocation you and I have no idea which market sector, which share, which area of business is going to do well this year, sure we can read the news and try and make our own decision, to try an ‘call the market’ as it were. Problem is we just don’t know enough – even the experts get it wrong more often than not.  

It is often said that looking for the right share, the right investment is like looking for the needle in a haystack. With that in mind, why not buy the whole haystack?  

In investment terms, the entire haystack is a called a ‘tracker fund’ or an ‘index ETF’ (exchange-traded fund) that effectively buys an entire market or index which includes all of the needles in the haystack.

Sometimes we wait and wait for stuff to happen when instead that is the last thing we are designed to do. If you are waiting around for things to happen, you can be assured they will happen anyway and it’s pure chance if it will be of benefit to you. Fact is most people spend their lives drifting from one financial crisis to another – from one bad relationship to another. Still spending one of the two main resources (money) on stuff – shizzle.

These are things you need to focus on if you really want your life to change.

Action – what are the ten percent of things you do that bring the most reward. Think, financial, emotional and spiritual. Go do them and them only.

Meditation/Mindfulness – don’t have time for five minutes of this. Go do an hour.

Gratitude – what you have is what you have – be grateful, express gratitude for this day, your clothes, where you are, you ain’t dead – which means things must be better than they can be.

Focus – bit like Brexit we have a whole load of politicians that can tell you what they don’t want but none that can tell us what they don’t want. The quicker your work out what you want the quicker things will change. What you don’t want  – won’t give you what you want.

Spending your time and money on stuff will not have the impact you think it will. It’s all about  making the inside right, then the outside will follow.

When you’re ready for more, get on the email list – you will thank me for it.

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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.

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.

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Since 1930, when it was kind of first possible for an ordinary person to get access to the information needed in order to invest successfully, there has been lots of attempts by many to make it work for them, or at least get their money working for them.

Sure, some start and give up, thinking it’s all far to difficult and others get lost in their own minds and stop. Others end up with a modicum of financial independence.

Before 1930, it was only really the wealthy that were able to make money – make money.  Everyone else was struggling to make ends meet or to have more than enough so they didn’t need anymore.  Certainly, a large proportion of the population were stuck in ordinary ‘just over broke’ jobs that didn’t really allow for the investment of spare cash – if there is no spare cash – there is no way of finding any to invest.

It should be no surprise then, that knowing just how to make money work for you is not clearly understood, firstly not everyone needs the skill if you don’t have any money spare there is no need for investment knowledge. Secondly, it’s only since 1930 or so that it’s been an option.

It takes many thousands of years for us humans to adapt to a new way of doing things. Wealth and money management is a relatively new thing to wrap into our DNA. It always used to be about hoarding (or saving) money, depositing it as cash in banks and building societies and leaving it there until it was required, back in the forties and fifties most of what was available  – cash deposits, would have paid a far higher rate of interest than now. An example of this was 1957 (source ONS) when interest rates hit 7% with inflation running at around 4%, giving real rate of return before tax of around 3% – having money in the bank wasn’t as bad as it is now with – effectively negative returns after inflation.

Therefore, even if there was spare cash, learning a new skill – that of money management was not really required.

It’s interesting to note that just before 1930,  there was a stock market crash that started a depression, that in turn is credited with causing the right circumstances for the start of World War Two and the rise of Hitler and his group of freaks.

After the war, there was the introduction of various state systems in the UK. Called the Welfare State – these started to appear in 1942 or so, this included a benefits system that covered both in work and retirement benefits — along with the NHS. For the first time, a State Pension was made available of ‘a penny a week’ at age 65 for men. Given that life expectancy was still only 65 it was a bit of a one-sided bet.

I’m sure it had the effect of making most people consider the ‘what ifs’ in relation to their personal circumstances – it was really only after 1950 that there were widely available company pension arrangements along with a number of personal pension plans on the marketplace. By the late 1960’s there were a good number of these plans around

In this short period of time, many people started to become more money savvy and certainly many high street banks started to provide ‘stockbroker’ services and investment funds started to appear from the likes of the Prudential and other Home Service Insurance providers. All of a sudden people could invest in the stock markets and start to stake a claim on a brighter future, leveraging money – making it work for you rather than you working for it.

There were other changes, notably more women in work, more married couples with two incomes. All of these provided a bit more cash in the system, a bit more spare. This, of course, fuelled the savings markets, with doorstep advice being available and banks being more adventurous with consumer investment products.

This meant that people started to think more and more about their options but still didn’t start to really apply leverage to their investment funds – – sure it’s a changed world today, yet people are still, in the main spending nearly all of the money they earn and saving a lot less than our grandparents did (on average) yet, more and more information exists.

As I write this in 2018 it’s clear that just having the information available does not make it possible for investment decisions to be made nor does it make people want to invest. Given that money invested now, will produce income for years to come. Income that can be used to provide a better lifestyle, a working less lifestyle it’s amazing that more and more people don’t want to learn what’s required or to understand the principles.

A pound saved today – invested for the future could be ten or twenty pounds at some future stage, income from that pound could be a further one or two pounds every year. It’s not particularly complicated but does need to be done.

Financial independence within a lifetime is possible.

You can download the Seven Rules of Money from over at the Financezone.co.uk

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