There are a few things that have been on my mind recently. Not necessarily directly linked to financial matters but that’s not stopping me.
China and North Korea. I simply can’t be bothered to look up the North Korean leader’s name, I know you know who he is, and that he likes cheese.
It’s one thing China being pleased that the North Korean fella takes the time to irritate the US on a regular basis.
Quite another when China ends up with the US Navy parked off their shore.
So when exactly are the Chinese going to depose / assassinate him?
Risk and volatility. Wow, don’t we get ourselves tied up in knots on this one?
In my opinion just about everyone in financial services has been wrong, remains wrong and shows no signs of being right anytime soon when it comes to understanding or explaining risk and volatility.
How about that for a 33 (culled from 48) word sentence? Mr Handgood would be so proud!
Real risk is running out of money, or having your income not keep up with inflation. That leaves you skint and/or steadily having to reduce your standard of living.
RISK is NOT what the FTSE100, or any other index, share, asset class does DAILY, MONTHLY or ANNUALLY.
What they do is go up and down. That’s volatility, not risk, and long may it live and thrive.
Quite simply we need volatility to produce the sort of returns that will beat inflation consistently over the years.
Producing those returns de-risks your financial plan.
And the antidote to volatility is, and always will be, a good dollop of cash so you can get on and do the things you expected to do, whilst volatility does the heavy lifting.
Property. Change is at foot in the property market.
It won’t happen all of a sudden, it will take years to play out, as it always does with property.
From 1989 it was seven years before we found the bottom and then we had eleven years of growth up until 2007.
Much of the country hasn’t recovered since then. London is the oddity and here transactions above the £1m mark are taking a serious beating. Unless, of course, you’re the sort of person who simply has to get shot of the cash before your Government confiscates it from you…
This seizure will trickle down as surely as the boom trickled from zone one to nine and beyond.
And then there’s the massive under-tax-harvested investment property portfolios just waiting to be tapped into.
Aided and abetted by the magnificent tax breaks on offer thousands have become “property moguls” over the last few years.
And now comes the reckoning.
There may be thousands of moguls but they are well spread around the country and won’t lose any MP their seat…
Stamp Duty is up, tax relief down, capital gains tax is 10% more than for other assets.
And the Government is skint. And the other side hates the so-called fat cats. Did I hear something about rent control this last week?
Robots. There’s a lot of talk about robots taking over all our jobs.
But isn’t that the same narrative that’s been going on for 200 odd years?
“This time it’s different”?! Ha!! Poppycock.
What can and should be turned over to the machines has and always will be.
That’s why tractors plough fields, traffic lights are automated and no-one under 40 knows what how a ribbon is important anymore.
It’s also why mobile ‘phones exist, air traffic controllers don’t rely on binoculars (imagine). We could be here all day.
Apparently TCFP’s very future is in doubt, but I just can’t see it.
The more we lean on technology the better. The less mudane, low value, things we do, the more we can spend on the valuable stuff.
And that means thinking, pondering, talking about our clients, their lives and their financial futures.
AKA: The things that really matter to them.
Our real value, the real difference we make, is in the insights and new thinking our clients can have as a result of us getting together.
And that’s uniquely human.
No robot can ever replace that.
future proofing your finances
020 7993 4898
advice@townclosefp.co.uk