Perhaps you might like to hear about the three most important lessons that our chairman and founder, Alan Steel, learned over the years which underpin our commonsense successful investment process for our clients:
- As a boy brought up in a council house he well remembers a system adopted by his mother where she used jars to split up the net wages coming in to the house every week. She believed that the secret of saving was that you made sure you spent less than you earned. So much for rent/rates, food expenditure, heating, extras, and "rainy day" money put aside into separate jars. Her long term discipline stuck with him. It’s a system that still works today. But not using jars anymore. There are better options these days. Lesson? Set aside an amount every month and save it efficiently for the long haul. That way you’re guaranteed rainy day money.
Investment appears to be so complicated to most folk nowadays we hear. Long term perspective is missing apparently now that Final Salary Pension Schemes are in their death throes. Which together may explain why today the majority reach retirement with far too little in savings. To help you better understand the task ahead, let us introduce you to "THE RULE OF 72". It works like this… take the return on your savings after tax, and divide your answer into 72. The result is how long it will take to double your money.
Example …let’s say your savings are in a Cash ISA. And your return is 1%pa net. It will take 72 years to double your money. Not good eh?
Even worse is the typical gross return since many bank deposit interest rates fell to 0.1% from April 2009. At that rate it would take a staggering 720 years to simply double your money and that is ignoring the reduction in spending power that would also be brought about by tax and inflation.
Compare that with the 20 year performance of a well known UK Equity High Income Unit Trust which, even after the much published stock market falls of September to December 2018, has returned around 8% per annum after costs by February 2019 (source Lipper Stats), doubling their money on average every 9 years.
- And finally he learned that if you wanted different results from most savers, you needed to think and act differently. That involves not listening to the constant pessimism pouring out of TV News broadcasts, avoiding the bulk of "expert" opinion in our newspapers, not listening to negative voices on the radio, and nowadays avoiding the "noise" from the Internet. Sure it’s difficult, but you have to understand that they do not have your personal best interests at heart. Bad news sells for them. That’s their model. So make "Nullius in Verba" (the motto of the Royal Society founded in 1660), your guiding star. Don’t believe what “they” say, check for yourself.
Past performance is not a reliable indicator of future performance.
Having helped deliver real measurable financial independence to a few thousand investors since 1975, this is what else Alan learned (sometimes the hard way).
I hope what follows helps you decide whether we are worth talking to.
If you are typical investors you will have pension pots written in algebra, in investment funds that disappoint, other investments that were sold to you, or bought willy nilly thanks to some recommendations spotted in the odd article. You may have too much lying earning the square root of not a lot in bank accounts which promised "special rates" but didn’t. And you have become cynical of "advisers" as the years have added disappointment and confusion. And I haven’t even mentioned TAX yet. Ouch.
The Financial Conduct Authority (FCA) does not regulate tax advice.
I’ve always found it helpful to start by asking what you’re trying to achieve. Such as do you want to be Financially Independent someday? If so when exactly? And what do you mean by Financial Independent?
To me and most other investors it means having enough private wealth to have the choice when to retire, or part-retire, or not, when you want to. If you follow my drift.
Or be so well-organised financially, that should your health fail you, you can slow down, or stop, because you can afford to!
So what we need to establish is how much you will need to build to afford that independence or freedom. And how to achieve that by incurring as little tax as possible.
We find that few investors think about investment this way… sadly. Which is why, according to survey after survey, the vast majority reach retirement with regrets, and too little net income.
Everybody is different but a good place to start is think of how much you’d want to have, net of taxes, if today was your ideal retirement date. So if you fancy age 60 as your ideal Independence Day, if you were 60 today, what would you want to spend every month? Then all we need to do is inflation proof that "net income" until your 60th, and as a Rule of Thumb, multiply that number by 25 to 30 to establish the sum of money you’ll require.
Now you see the scale of the problem? The quicker you come to terms with this, and the quicker you have your current strategy and products independently checked and MOT’d the better.
You’ve probably seen loads of articles written by commentators claiming that "you can’t beat an Index Tracker because they’re cheap" or you’ve followed all the headlines over the last ten years prophesying disasters and crashes, so you kept too much lying in deposits earning little, and taxed, and being quietly eroded by inflation.
First of all let’s get something right. Once you know your goal, the best way to achieve it is quite simple. Commonsense again. Simply have your savings invested as efficiently as possible with as little exposure to tax and invested, not lying rotting away in deposits ravaged by tax, low interest rates and inflation, so it can grow as quickly as possible in the best places. Remember THE RULE OF 72?
Think about the best football teams. What makes them successful? Well it’s a good start to have the best players, wouldn’t you say? Why would you want to have an average football team? Yet that’s what the pessimistic "experts" recommend when it comes to investing. An index tracking fund for example is the perfect "average" fund. Simply following the market as a whole both up and regrettably down.
Why settle for average when you can choose the best? Even non- football fans will recognise the need to both defend well and attack creatively to come out winners.
And as the legendary Brian Clough once said "if you get the spine of your football team right then the rest would take care of itself". The spine in a football team means the goalkeeper, the centre defence, the central midfield creator, and the striker and that is a very good analogy of how we, at ASAM, select a successful team to manage your money.
The "goalkeepers" and "defenders" are lower risk managers whose priority is to preserve capital. The "centre half" provides the stability and long term experience and the "creative players" are the opportunists and more risk takers searching out higher profits as their goal.
We can choose a different spine and team thanks to detailed research into which fund managers are best in different positions from goalkeeper to attack. We then ensure we have at least 5 available for each position. This allows us to tailor a strategy suitable for all ages, risk profiles, income requirements and where we may be in the economic cycle.
We meet up with these managers on a regular basis as well as keeping our eyes open for tomorrow’s stars.
And we are not bound by FIFA rules either! So you can have as many "goalkeepers" and "defenders" as you want when markets appear volatile. Together we agree the best team to help you achieve your financial goals.
Your investment may fall as well as rise and you may not get back what you put in.
Past performance is not a reliable indicator of future performance.
The correct investment strategy is the key to your long term financial security. If you would like a no-obligation consultation to review all of these crucial issues the please contact us today by completing our form here:
Our office is open between 9 am and 5 pm Monday to Friday, excluding public and local holidays. An answerphone service operates out of office hours.
You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with the appropriate data protection requirements (Data Protection Act 2018). You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone.