Our senior staff writer, Magnus looks back and reflects on the financial advice that he took and the advice he ignored...
Our senior staff writer, Magnus Wheatley, worked in the City of London for 30 years in a variety of roles for major finance houses. As the age for retirement looms, Magnus looks back and reflects on the financial advice that he took and the advice he ignored...
- When I worked in Foreign Exchange, my boss at the time told me to put whatever money I could on a monthly basis into my pension. I was earning £7500 a year at the time (it was 1990), interest rates were 12%, I was living in London and all I could afford was £50 a month. The compounding effect was enormous. Best advice ever and I have saved ever since.
- Know how much you owe and aggressively address your debts first. Paying off small amounts regularly on credit card debt is a brilliant way to eke into the nominal. Knowing all of your debts is power. Get on top of it. I wish we had a tool like Prift at the companies I worked for.
- Don’t gamble. I remember a Masters Golf Tournament in the early 1990’s where the odds were incredible for Bernhard Langer to not miss the cut. He hadn’t missed in something like 12 years and I put £100 on – all the spare money I had – and he missed the cut. I never gambled again.
- Always keep some money aside in an instant access account for rainy days. They do come and when they do, you need cash quickly. I never believed that ‘cash is king’ but it’s very handy in a crisis.
- Don’t invest in things you don’t understand and don’t follow the crowd into highly risky or speculative ventures or latest trends. I learnt that lesson in the hardest possible way.
- Watch your financial trends like a hawk. Monitoring your monthly expenditure and saving rates and seeing them displayed on a graph, like on the Prift platform, is an addictive way to change your spending behaviour but more than that it lets you understand where you are overspending. Again, knowledge is power but targeted action is even more powerful.
- Avoid status credit cards. The days of being impressed by a fancy gold, silver, platinum, black card are, thankfully, long gone. Use a credit card that is cheap to run and monitor the rates voraciously. Don’t be afraid to switch.
- Use every available financial perk that your company offers. Talk to your HR Manager and ask their advice on what benefits are appropriate for you. Don’t be afraid to ask for advice – 99% of people in companies are more than happy to help you when you are starting out or if you have a problem.
- The best phrase in finance is: “If it sounds too good to be true, it probably is.” And that’s a good one to follow. There are always scammers and people more intelligent than you, out there. Be super cautious about any get-rich-quick schemes or non-government approved tax-shelter schemes.
- Micro-manage your finances when you are on a lower income. Do you really need to buy that coffee and croissant from the local café? Does every lunch have to cost the earth? Watch your sundry spending and use platforms like Prift to buy everyday items at a significant discount and use the money saved to invest into your tax wrapper.
- Don’t worry too much. The path to retirement is long and if you are working hard, enjoying your job then the rewards will come. When they do, enjoy them. It’s a great ride. And in these times, don’t worry about redundancy – one door closes and another opens. Don’t confuse your job with who you are as a person and prepare for the future.
Getting financially fit is really all about common sense but tools like Prift can really help in combining all your finances into one place, understanding the costs, looking at the projections into the future (particularly on pensions with the state pension calculation displayed) and understanding your overall spending and saving trends.
A powerful platform like Prift allows employees to really make plans for the future – and remember, time flies so don’t put off today what will aid you in the future.
Magnus Wheatley – March 2024
