Get Your Finances In Order - Shit’s About To Go Down
So it's official, the U.K. economy has entered a double-dip recession. But what does that really mean?
We’re fucked basically.
Maybe not immediately, as the government are handing out loans and support like sweets in the playground. The reality is they’re handing out your money. Maybe not in the form of taking a direct debit each month or withdrawing it directly from the ATM. But money doesn’t grow on trees, as we all know, and you will inevitably end up paying for it at some point in the future.
Get Your Finances In Order - Shit’s About To Go Down
Higher taxes, possible stamp duty increases, inheritance tax, you name it. Unless you're Lewis Hamilton and have based yourself in the tax haven of Monaco; or dodgy old Philip Green staying afloat in his £300 million super yacht, paying his Missus, sorry "business partner" a multi-million pound "tax-FREE dividend". You will likely get rogered in some way, shape or form, in the foreseeable future. And that's if you still have a job?
“Wake the fuck up people, and get your house in order” - Damian King
But what does that mean?
It means, taking an active role in deciding what’s happening with your hard-earned cash. Leaving a nest egg in a savings account getting 0.1% (if you're lucky) is going to get you nowhere. There's as much chance of your money depreciating as inflation soars as there is in it accumulating.
Continuing to pay into a pension is all well and good. But...and it's a big but - how do you know what your pension provider is doing with your hard-earned cash. Pension funds have historically invested in bricks and mortar investments (ie psychical businesses, commercial property, construction etc), of which, the latter is likely to fall on its arse over the next 2-5 years. And, let's not forget how companies are likely to operate in the future - remote working could see the demand for office space will drop significantly in the years ahead.
The majority of high street providers are generally averse to investing in emerging technologies, and I can assure you that they haven't invested in Bitcoin, let alone Ether, Ripple, or Chainlink.
The majority of people have been conditioned to think that you can simply pay X amount into a pension and then when it’s time to retire they automatically get a pot full of cash to enjoy retirement with. I can tell you now that is NOT the case.
"But my pension is with an established and longstanding pension provider", I hear you say. That's all well and good. But you might want to Google Northern Rock, Leman Brothers and Barings bank and see if you're still feeling as assured.
Just ask your parents how their endowment mortgage turned out back in the '80s and '90s? Their trusted high street mortgage broker advised them that an endowment mortgage was the best way to invest in their future. Unfortunately, that turned out not to be the case for millions of people. Many of which were actually left with a shortfall to pay or face the prospect of having to sell the home they had spent the best part of their life paying for.
Who's to say this won't happen with your pension?
I'm not offering financial advice, far from it. I am simply saying, that it pays to know what's happening with your money - after all you’ve worked hard enough for it. There's enough information out there to arm yourself with the basic knowledge of investing and financial management. Leave it to the experts I hear you say?
The experts?
You mean the institutions that single handily caused the market crash in 2008? The IFA's that would turn a blind eye and sign off on self certificated interest-only mortgages that were x15 your salary, because you "pinky promised" to keep up with the monthly repayments?
Just because someone wears a suit to work, has a business card and sits behind a desk doesn't necessarily deem them capable of tying their own shoelaces let alone invest your cash. You only have to look at wide boys like Nick Leeson the rogue trader, to know that not to be true. The man single handily bankrupted the UK's oldest merchant bank through lies, negligence and, basically, being shit at his job. His lies and deceit were never questioned because he was, well a professional who wore a suit, had a business card and sat behind a desk, right?
I'm not saying that you should go out and open a forex trading account and invest all your money yourself - FYI most people lose money on these platforms. Nor am I saying you should invest it in gold, cryptocurrency or a tech start-up. What I am simply saying is that you should at least have some idea of what's happening with your money.
The infamous saying is infamous for a reason - "don't put all your egg's in one basket".
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