I met this bloke down the pub. And he said to me…….
DIY Financial tips to avoid from “the man down the pub”
Article written by Financial Adviser Martin Dodd
People take financial advice from the strangest of places. One which I hear time and time again is…. “I was talking to this bloke down the pub and he said …blah blah blah” This is probably not the best place to take advice as if nothing is it is probably out of context.
Another classic, is taking advice from someone who you perceive to be very successful.
Somebody you may know who has been very successful in their field. However, they have often taken extraordinary risks to achieve their success and for every successful person there are many that have not made it.
So what are the dangers to watch out for?
• Financial Tip #1 – You don’t need a pension if own your own house
This is about the most popular reason for not saving, not investing or not raking out a pension. The first problem with this is that we all need a house to live in and even if we can downsize to a smaller property, when we retire, we will need quite a big pot of money to live on.
• Financial Tip #2 – You should invest all your money in gold
Gold has been an incredible investment for some, but is notoriously difficult to predict and many an investor has lost out by trying to time the market. The two problems here are that you don’t want to have all your eggs (gold) in one basket and secondly, no one knows what the short term direction the gold market is, so unless you are in it for a very long time, it is very easy to suffer a loss.
• Financial Tip #3 – Keep all your money in the bank where you can get it
Safe it may be, or is it. We all need to keep cash in the bank for day to day living and emergency expenses, however keeping large amounts in cash savings has two problems. Firstly, the interest you earn on deposit will be losing value in real terms as inflation in general is higher than the interest. Secondly, if you hold more than £85,000 with any financial institution and they default, you will only receive protection up to the £85,000.
• Financial Tip #4 – You should invest in this company I heard about – it’s the new Apple
Top tips from the man down the pub should be treated with a great deal of caution. The chances that your man is actually close enough to those in the know in a company are pretty slim and often these share tips have been talked about long before you get to hear about them down your ‘local’. By the time you hear about it the share price has already gone up or it was never a real tip anyway.
• Financial Tip #5 – Buy land; they’re not making any more of it
Not all land is equal. Some land has considerable value, whilst other land may never be worth more than common garden value. Land if it has development potential can be very valuable, but also very costly to buy as everyone else can probably see the potential. Buy land by all means, but be sure to know what you are doing and how you are going to extract profit from the deal. Many people have quite literally lost everything on development projects.
Always seek professional financial advice before making any investment decisions.
