Balance July 2018 - 18

SMALL CHANGE

the manual

RESULTS
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THE BIG SPENDER

THE MINIMALIST

THE SQUIRREL

As fast as you get it, you
spend it. You probably
have nothing saved, and
that's something you
can't see changing. You're
in company: one in four
Britons have no savings, but
there's plenty you can do to
alter your situation.

You don't place much
importance on money,
because it makes you
another cog in a financial
system that keeps everyone
indentured for life. You're
not far off: a paper at the
University of Buffalo found
staking your self worth
on the pursuit of money
has negative psychological
consequences.

You're a ruthless saver
and have set up all sorts
of investment strategies
that are risk averse, yet
constant in their yield.
The future is something
that worries you, so you're
playing the long game by
having just about every
eventuality covered with
multiple insurance policies.

Try...

"The key issue is access,"
explains Adam Pratt, lead
financial consultant
at Easily Started
(easilystarted.com). "If
you have open access to
your savings, you'll wipe
them out in small chunks.
Look for an account that
aids your discipline of
saving an affordable
amount of your pay. Don't
ignore the new Lifetime
ISA either, which has a
tax-free wrapper and gets
topped up by up to 25%
per year to contribute
towards buying your first
house or your pension."

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Try

Try

"Money is engineered to
seem complex, and some
of the language around it is
impenetrable," explains
Adam. "At its heart, it's a
universal quantifier allowing
you to convert efforts into
anything you choose. If you
are not fussed about cash
now, just make sure you
have the basics covered for
your future self. If there is
any to spare, look at
investing in things you are
interested in, from ethical
businesses to crowd
funding. That way, your
money works for you."

THE RISKY BUSINESS

You're in love with the sheer exhilaration
a high-risk, high-reward investment
can
yield
and there's a certain thrill
THE
AMASSER
of the chase that keeps you
motivated
to be
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'post
economic.'
creative with your funds.
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ensures
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earning
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Sometimes you win, sometimes
you lose,and
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sees
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lifeoften
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the balance coming slightly
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It's all

18

A paper at Hiroshima
University found having a
good understanding of
money reduces worries
about old age. "Your
investment strategy may
seem risk averse, but
you still need to be
smart," explains Adam.
"If you are dealing in
cash investments, the
Financial Services
Compensation Scheme
only guarantees £50,000
per institution (£85,000
for ISAs), so place your
savings wisely. There are
also treasury and other
bonds as alternatives."

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THE AMASSER
You are officially 'posteconomic.' That's the term
where you no longer have to
work as you are so wealthy,
everyday economics have
no bearing on your finances
or life satisfaction. It's all
about maintaining your
wonderfully high standard
of living at this stage, so
there's no need to get risky.

Try

Even if you feel insulated
from the world's
problems, you do not own
your own planet and are
affected by how everyone
else acts. "You can clearly
afford excellent advice,
but may not feel like
you're getting it," says
Adam. "I will add my
penny's worth: beware
the self-professed
expert, because they have
nothing to learn. Instead,
look to specialists in tax
and managing portfolio
risk; be receptive to
advice, but heed only
your own mind. Any tax
advice you are given now
may be retrospectively
invalidated by HMRC, and
you should always take full
responsibility for your
investment choices."

Try

Quick fixes and 'sure things' don't always pay off the way you
imagine they will, especially if you listen to people making
guarantees. A paper at Bocconi University in Milan found if
you want to make money with stocks, you shouldn't listen to
fortune-tellers. During the last 35 years, investing in the 10%
of US stocks analysts were most optimistic about yielded on
average 3% a year. Investing in the 10% of stocks analysts
were most pessimistic about would have yielded a
staggering annual increase of 15%...

BA LA N CE July 2018

PHOTOGRAPHY: GETTY IMAGES

The


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Table of Contents for the Digital Edition of Balance July 2018

Balance July 2018 - 1
Balance July 2018 - 2
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