Monthly Archives: January 2020

Educating The Next Generation Of Clients

Perhaps it is because my children are coming to the end of their primary school education, but I’ve become increasing aware of my responsibility as a parent to provide them with responsible attitudes towards money to help them through life. While they are beginning to understand the concept that things cost money, they are gradually realising that there isn’t a bottomless pit of cash buried in the back garden to pay for everything! Getting them to understand that saving the weekly pocket money to buy something that they really want is much better than blowing it all on a comic and sweets each week, is an important first step in encouraging them to adopt a lifelong saving mentality.

The Personal Finance Society is the professional body for the financial planning profession in the UK and they have recognised the importance of educating tomorrows savers, with the launch of the My Personal Finance Skills – a pro bono initiative to deliver financial education workshops to secondary schools and colleges across the UK. These workshops include topics such as helping students understand the value of everyday expenses, staying safe from financial scams and understanding the concepts of income tax and National Insurance once they leave school.

I volunteered to be an Education Champion, and despite a little bit of trepidation (there’s a reason why I decided to become a financial adviser rather than a teacher!) I took the plunge to deliver a workshop at a local secondary school just before Christmas. I have to say that it was a really enjoyable experience and was fascinating to see how fourteen and fifteen year old’s think about money – more than one were shocked about the cost of things such as household expenses and rent, especially when they were also informed about the difference between net and gross salary!!

This generation of children are fully immersed in social media and there is no doubt that they are heavily influenced by the lavish lifestyles portrayed by some celebrities. One of the objectives of the workshop was to make the participants aware of the income needed to maintain such as lifestyle, and the dangers of using easy borrowing in an attempt to live the “Instagram lifestyle”.

A number of clients have expressed their concerns over the years about the ability of their children to manage large amounts of inherited wealth, and last year we sought to set up a next generation workshop to provide financial education for young adults. While we didn’t have the level of response that we had hoped for, I’m sure that this will be a topic that we will revisit in the future.

Because We Needed Something To Worry About

As I sat down to my Christmas Dinner this year, I recall being quite surprised at how settled things seemed to be. Not just in my own little home on Christmas day, but across the country.

The decisive Conservative victory in the election gives us a more certain path for the future and regardless of your views on Brexit or politics in general, I have always argued that uncertainty is almost always worse than the outcome, even if you disagree with the outcome.

As we went into the Christmas holidays, it seemed nearly certain that we would officially leave the EU on 31st January 2020. Of course, this is merely the beginning, and the end of January will signal the beginning of (supposedly) 11 months of trade talks which are designed to culminate in a trade deal by the end of the year.

So, despite the slight uncertainty hanging over the future trade relationship between the UK and the EU, all seemed to be sorted. We had a stable government, Brexit was going to happen and even the US and China seemed to be getting to the bottom of their trade dispute.

It was as if the world knew we didn’t have anything to worry about…

Of course, what followed is the US strike on Iran and the subsequent retaliation, giving us a whole new geo-political issue to ponder over.

Now, my feelings about this issue are just the same as with any issue (from an investment standpoint anyway) – keep calm and carry on will always be the motto.

What this just goes to show though is that there will never, ever be a ‘good time’ to invest. All those people who were waiting until Brexit and the election sorted themselves out will still be waiting to see how the US / Iran situation pans out, all the while missing out on what has been one of the best periods in market history.

The old adage that time in the market is more important than timing the market could not be more important, especially given that this uncertain world seems to be the ‘new normal’ as I wrote about a few weeks ago.