10 Ways to Grow Your Money. Help and tips on how to make your money grow.
Transcript of Ashley Roberts-Clark (Director)
“Hello there, this is a quick one. A two minute video: 10 ways to grow your money.
These are my 10 golden rules on how to grow your money, how to look after your money etc. So
Stop hidden trail commissions on your pensions and investments. Many of you won't realise but the way lots of financial advisers work and banks and insurance companies, is they take a hidden trail or hidden fee commission on a regular basis from your investments. Now this can be anything from a 0.25% per annum to 0.5% to 1% per annum. And that money is paying them a fee to look after your money. So where possible, explore exactly what those are and look at getting them stopped because that 0.5%, 1% a year, each year will get your money to grow quicker then.
Rule 2. Is tax allowances. Make sure you use all of your yearly tax allowances. [so] I’ve got over 20 of them so if you want to call me or contact me on, I've got a list of them. But, I have not got time to run through it all today. Make sure you use your capital gains tax allowance, make sure use your pension allowance, make sure you use your ISA allowances. Make sure you use all your tax efficient allowances because the money is better there in your pocket than in the Treasury's pocket where you will have paid too much tax. So, rule number 2 make sure you use all of your allowances.
Rule 3. Simple rule number 3 is active fund management. [So] what do I mean by that? We have all heard it before: “buy low sell high, buy low sell high, sell, sell, sell, buy, buy, buy. This is what professional investors do, so this is what you’ve got to do with your investments. When you see headlines like: “stock market has hit an all-time high today” - that's the time to get out, that’s the time to lock in profits. Don't sit there and be greedy and think ‘gosh it might grow some more’, it probably won't. Or even if it does a little bit, it’ll still come back down. Likewise, when you see: “stock market has crashed today, world markets crash, China crashes, America crashes” - that’s the time to get in, that’s the time to invest your money. So, be much more active with you switching your investments in to stock market funds, out of stock-market funds, into property funds, into bond funds etc. So, be much more active in how you do that.
Rule 4. Never, ever allow commissions to be paid on any of your pensions, investments, life insurance policies, sickness insurance policies, travel insurance or anything. Pay a fee, pay a fee because those commissions come out of your pensions or investments. I know the rules have changes you may not be aware but the rules have changed wherever supposedly the word 'commission' can’t used any more, but many, many investment, insurance companies, banks, financial advisers still take a percentage of your investment or your pensions. So just be aware of that. Always pay a fee for those services.
Rule 5. Rule number five is only ever look for the lowest charged pensions or investment policies. I know that might sound ‘daft’ and you might think 'I always look for the best value and I always look for cheaper'. You will be staggered at the differences in investment charges on your pensions or investments between company A and company B. Always compare and if you don’t compare, get your financial adviser to compare and that probably leads me onto financial advisers. What sort of financial adviser should you use?
Rule 6. My guidance here is: only ever talk to higher qualified advisers who are chartered financial planners or certified financial planners. These guys and girls that have got basically equivalent of solicitor or chartered accountant qualifications in financial planning. Those guys and girls are likely to be much more professional and therefore, give you straighter advice and probably give you a straighter, sort of more transparent fee agreement rather than taking high fees and hidden trail commissions from your policies.
Rule 7. [Drip feed] Going back to markets again. What should you do in these volatile market times? Rule number 7, I think I am on and if I have lost count of the numbers don't worry. Rule number seven: when it's a falling market, so when markets are going down, when markets are going down, look at drip feeding your money into those investments so look at regular premium savings plans. [So] if you save regularly into your pension or you drip feed money into investments, look at falling investment markets for where, you’re paying regularly where there is a drip feed. And then equally, in terms of rule number eight
Rule 8. Are for lump sum investments. Always look for markets that are rising and , I know, again that sounds ‘daft’ but what we’re trying to do here is: buy at the bottom of the market, so if the market has crashed, that’s the time to invest lump sums into that particular area because it will grow so your lump sum grows. So rule 7, for markets that are falling invest regular premiums beacuse you buy lots and lots of cheap units as the markets are falling, in rising markets [rule 8] you need to invest at the start. Invest and then it will grow.
Rule 9. Compare. Always compare and do look at consolidation. So, when you’ve got lots and lots of pensions that you might have taken out over the years with different employers and different companies and pensions that you paid into yourself a few years ago. Those charges may be high, in old [policies] a few years ago, compared what you can get today. Always, always compare charges on old policies to newer type policies and even look at or get your adviser to look at: ‘Right, should I consolidate my pensions or consolidate my investments?' Because lots of investment companies and pension companies actually give you a discount on the charges if you consolidate and have a slightly bigger pension fund or slightly bigger investment. So, it may make you or save you many hundreds if not thousands of pounds over the coming years so that was rule 9. compare and consolidate.
Rule 10. Management Law. The final one which I have alluded to before is management law the first law of management: ‘something that is not managed or reviewed regularly will deteriorate’. It’s the same if you manage staff. If you're not managing staff or monitoring your staff, if you're not monitoring the performance. If you're not checking the work that they doing or if you're not checking your car or if you are not checking your electricity or your gas boiler or whatever it might be, sooner or later it breaks. So, if you never, ever speak to me or never watch this video again, never forget the first law of management which is: ‘things that are not managed deteriorate and things that are measured and monitored improve’ So use those laws of management, which is monitor and manage and your investments will fly.
Thanks very much for watching.”