Savings – Work Hard Then Throw it all Away?
We have seen many clients work very hard only to lose some or all of their savings. And they’re not stupid people, quite the contrary.
Keeping your wealth can be a challenge. You need to think about how to do this. Also, think about why the mistakes have been made. Greed? Bad advice? Putting all their eggs in one basket? Collapse of the share market?
You’ll be lucky to avoid making some mistakes. Let them be relatively small.
Here are a few examples of how you could have made mistakes:
- Ross Financial Management promising exceptional results.
- South Canterbury Finance Company was a safe finance company wasn’t it?
- Lending to the wrong finance companies, often on the advice of a professional.
- Many tax avoidance schemes such as pine trees, kiwifruit, alpacas and films have not worked out so well.
- Bubbles bursting, such as the share market in 1987.
- Over-exposure to debt when the market recedes, usually while investing in real estate or the share market.
- ANZ Bank promoting ING to its customers. Do you remember what happened?
So what should you do? It’s not our job to provide financial advice and the law requires us not to do so. Besides, we don’t have the specialist knowledge required.
However, consider these points:
- The higher the return on your investment, the greater the risk. Don’t be greedy.
- Keep alert. Doing what everyone else does is, at times, wrong. Recently, gold was an example of this. It was going up for ever, wasn’t it! The 1987 share market collapse was another.
- Recognise your mistakes and maybe you should sell out before they get worse. Have you the courage to do this?
- It’s often a good strategy to get rid of your losers rather than cash in your winners. If your winners continue to win, you’re better to stay with them. You may have heard it said “No one ever went broke taking a profit”. It sounds wise advice but maybe it’s those who hang on to their good investments who really make the profits.
- Spread your risks. If you’re tempted into a scheme which looks too good to be true, it probably is. If you really are tempted, don’t go in big time. Only invest money you can afford to lose.
If you would like a review of your finances call Nick on 0800 ASK NICK, or e-mail firstname.lastname@example.org.
The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.