LIFE AND MONEY REFLECTIONS Archives - Page 8 of 22

Chances of success

Dominic Thomas
Oct 2023 • 4 min read

Chances of success

What are the chances of winning the lottery? I think I’m correct in saying that the UK was late to ‘the lottery’; not the raffles or ‘the Pools’, but the lottery itself. I suspect this was due to a cultural shift, which in other countries by 1994 had either happened sooner or wasn’t a significant impediment.

Most of us grew up being taught not to gamble; aware of the problems of addiction and the prospect of not simply debt but bare poverty. However our cultural myths and fairytales are full of a rags to riches, poverty to fortune narrative. We seem to believe (in the collective sense) that “it could be you” is an acknowledgment of the possibility that winning is a matter of a coin toss.

Jerry and Marge Go Large is a new film based around the story of a North American couple who play the lottery. However the twist is that Jerry is something of a maths genius and has spotted a flaw in a particular lottery, The WinFall, meaning that he can be assured of a win, indeed the larger his bet, the more he will win.

The story is set twenty years ago, at the turn of the century in 2003. In a world of algorithms and AI, it would seem unlikely that such a flaw would occur today.

Unusually the couple share their knowledge with their community, setting up a business to enable all those that wish to participate to do so. Over a relatively short period they amass winnings of over $27m of which a considerable proportion is reinvested into their local community.

Maybe I’m being pedantic, but I find it strange that someone who understands maths and probability, appears to a fail to understand investing principles. At one point Jerry is meeting with his financial adviser, rather late in the day to discuss his retirement. His adviser suggests he could achieve better returns with more exposure to equities. Jerry counters that he doesn’t want to lose his money and that anything where this is possible is gambling.

I’ve met this sentiment a lot over the last four decades. Holding shares in a few companies that you ‘like’ or have been ‘tipped’ about is, I would concede, very like gambling. There is a chance of permanent loss should those particular shares become worthless because the companies have all become bankrupt. Yet our evidence-based approach, which is not unique, but certainly not common, is to hold all the companies listed on various market indices. Some will become bankrupt, but most will not, most will survive and make profits year after year. For all the companies listed on markets to become worthless means that we are all in our worst nightmare of practical day to day survival, where money is almost certainly useless and most definitely not a priority.

I don’t know if this is what Jerry actually believes or if his financial adviser has failed to educate him about investing, but it is surprising given his knowledge of probability. I suspect that there is some artistic license taken with the script, which doesn’t aid ordinary investors, but yet again leaves them feeling a sense of having missed out on a sure thing that has now drawn to a close.

I enjoyed the film, it’s decent enough, but be assured that at Solomon’s, we focus on improving the chances of success for your financial plan and monitor this regularly. Hopefully you understand enough that we seek lots of marginal gains, cost control, asset allocation, suitable cash reserves, reviews and of course managing investor behaviour. In plain terms, trying to help you from blowing up your own plan because of the latest news or ‘brilliant idea’.

BACK TO ALL BLOGS

Chances of successJemima Thomas2025-02-04T16:00:39+00:00

1 in a million (or rather 1 in 45 million!)

Debbie Harris
Sept 2023 • 2 min read

1 in a million (or rather 1 in 45 million!)

You are more likely to be struck by lightning or attacked by a shark than winning the jackpot on the National Lottery.

Playing the lottery can be a bit of fun, especially if you have a lucky number or a favorite game. Most participants enjoy the thrill of anticipation and the possibility of winning a huge jackpot (let’s face it, most of us have a good idea of what we’d do with our winnings!)

Here at Solomon’s, we are not party poopers and if the Lottery is your ‘dabble’ into the world of improbable dreams – then that’s all good … we’re only talking about £2.00 a week for a ticket after all.

But it IS our job to challenge your financial decisions and I wonder whether you have ever thought about the impact of doing something different with that £2.00 a week … ?

If you were to save it for 50 years and were to achieve a return of 5% per year – you would have more than £23,000 in your account at the end!

Most of our clients understand the power of compounding interest and are fully onboard with the nature of long-term investing, so this example probably comes as no particular surprise – but it just goes to show that ‘a little’ can become ‘a lot’ given time and proper attention (which is a big part of what we do for our clients at Solomon’s).

Of course, the National Lottery does support lots of charitable and community causes, so your £2.00 a week isn’t entirely ‘wasted’!

BACK TO ALL BLOGS

1 in a million (or rather 1 in 45 million!) Jemima Thomas2023-12-01T12:12:28+00:00

Lost Gardens of Heligan

Debbie Harris
August 2023 • 5 min read

Lost Gardens of Heligan

I spent last week in a beautiful part of the world called Gorran Haven, Cornwall.

I have been going there each year with my wider family for over 20 years – it’s our home from home (17 of us attended this year!).

Many years ago, we visited The Lost Gardens of Heligan which is (as their website says) an “astonishing story of regeneration”.

In the 1990s these Victorian productive and ornamental gardens were rediscovered in the grounds of an old mansion house under mountains of brambles and ivy and since then have been lovingly restored to something close to their former glory across 200 acres (so far).

On the estate, there are ‘living sculptures’, magnificent woodland walks, bee hives, farm animals, a ‘jungle’, giant rhubarb plants, enormous rhododendrons, productive gardens (herbs, vegetables, fruit), pleasure grounds, natural climbing trails for kids and adults alike and many ‘work’ areas that were used in Victorian times and have been left much as they were – all providing something of a glimpse back in time.

We went again this year and I was most inspired by the growth that had taken place since my last visit – the workforce there have managed to achieve an evolution of sorts without appearing to have interfered too much with nature’s processes. It was as wonderful as I remembered; in fact it was better – largely not too much had been tampered with; but certain things had been tweaked, enhanced, emphasised and it was breathtaking.

On reflection, it reminded me (a little!) of why we tell our clients to trust the investment process – it’s a long-term endeavour; it only needs minor tweaks along the way; and can be managed effectively with mindful and careful ‘interference’. Importantly it takes time and patience (and an expert hand). Your financial plan may not look like a fine ornamental garden; it may not be an inspirational thing of beauty; but it is ultimately your creation and speaks of your life, your wishes, your legacy and ought therefore to be treated with respect and care by people who think it matters – you and us.

BACK TO ALL BLOGS

Lost Gardens of HeliganJemima Thomas2023-12-01T12:12:29+00:00

Perspective is everything

Guest blogger – Ben Hutton
August 2023 • 5 min read

Perspective is everything

Big numbers are hard to put in perspective. We hear millions, billions and trillions thrown around a lot in finance, but it requires a real effort to think about how much that really is.

A useful way of gaining perspective is to turn it into time periods (helpfully calculated by NASA, so you know it’s accurate*).

If you went back in time for one million seconds, it would be Friday, 23^rd June. 12 days.

If you went back in time for one billion seconds, it would be Sunday, 27^th October 1991. Nearly 32 YEARS.

But the really mind blowing one is this…

If you went back in time for one trillion seconds, you’d be 32,000 years in the past. Days of the week would be irrelevant, you’d be more worried about the fact that ice sheets covered most of the UK, and your closest friend was this guy:

So, when we hear that the UK currently has a national debt of around £2.5 trillion**, we can acknowledge that is a LOT of debt.

But we shouldn’t panic too much.

Because when you put what the UK has borrowed up against what the UK is worth, things look a little better.

And that’s what the debt/GDP ratio below does (all the way back to the reign of King James II).

In 1815, after the Napoleonic wars, UK debt was £854 million – 1/3000^th of today’s level. But that represented nearly 250% of GDP!

Today the debt/GDP ratio is 100%. Similar to most other developed nations, and not out of whack vs. history.

Perspective is everything!

BACK TO ALL BLOGS

Perspective is everythingJemima Thomas2023-12-01T12:12:29+00:00

Artificial Intelligence – it’s not a horror movie

Debbie Harris
July 2023 • 5 min read

Artificial Intelligence (AI) – it’s not a horror movie

AI is starting to transform the financial services industry in many ways. Here are some of the latest innovations that are making a difference:

~ Chatbots and virtual assistants

These are software applications that can interact with customers and provide them with information, guidance, and support. They can also handle tasks such as booking appointments, making payments, and verifying identity

~ Fraud detection and prevention

AI can help detect and prevent fraudulent transactions and activities by analysing patterns, behaviours and anomalies. It can also alert customers and authorities in real-time and block suspicious activity

~ Credit scoring and lending

AI can help assess the creditworthiness of borrowers and provide them with personalised and fair loan offers. It can also monitor the repayment performance and adjust the interest rates accordingly

~ Wealth management and robo-advisers

AI can help investors and savers manage their wealth and achieve their financial goals. It can provide them with tailored advice, recommendations, and insights based on their risk profile, preferences, and market conditions

~ Regulatory compliance and reporting

AI can help financial institutions comply with the complex and evolving regulations and standards in the industry. It can automate the processes of data collection, analysis, reporting, and auditing. It can also flag any issues or violations and suggest corrective actions

And there is a lot more to come – the ‘tech of the future’ is most definitely already with us in some areas – we are always looking for new ways to improve what we do for our clients and how we do it here at Solomon’s – AI-driven technology is a big part of our research at the moment. We will only introduce enhancements if we can see a clear benefit to you our clients and we will do our best to introduce things to you in an organic way.

That said – please note that this blog post was generated by an AI tool … it had ‘human hands on it’ too (as I hope you can tell!), but the bulk of it was written by a computer (and it’s pretty good).

AI doesn’t have to be scary – it’s all about how and when we use it … we will continue to be mindful of this as we consider new technology to improve our services to you.

BACK TO ALL BLOGS

Artificial Intelligence – it’s not a horror movieJemima Thomas2025-01-21T16:40:42+00:00

Learning about Finance in Schools

Guest blogger – Jodie Harris
June 2023 • 2 min read

Learning about Finance in Schools

For the past week we’ve had an extra helping hand at Solomon’s headquarters, due to college student Jodie, who has been doing her work experience with us. During her time with us, she has been creating market research for both her college (and us!), by gathering data on what adults (with financial experience) wish they had been taught in schools. Our working assumption is that things like borrowing, interest rates, pensions and budgeting are likely to be the top-of-mind topics, but of course we may be surprised by the responses… Over to Jodie –

I have been assigned a really interesting project to research and evaluate how people feel about ‘learning about finance’ whilst at school.

We have put together a questionnaire to get opinions around this and following the analysis of the data we collect, we intend to report the results on the Solomon’s website and send a copy to local schools and the media, and potentially our MP and the Department of Education.

Please could I ask you to give up two minutes of your time to answer the short questionnaire for me so that this project is meaningful and worthwhile – I would be very grateful for this!

Thanks, Jodie

CLICK FOR EDUCATIONAL SURVEY

BACK TO ALL BLOGS

Learning about Finance in SchoolsJemima Thomas2025-01-23T10:55:11+00:00

Fail to prepare, prepare to fail

Jemima Thomas
June 2023 • 3 min read

Fail to prepare, prepare to fail

There are so many things about moving house that I loathe; but one of the biggest is ‘the admin’ … changing personal banking details, setting up new accounts, changing names on bills, being on hold to a new broadband service, contacting the DVLA and ordering a new driving licence etc.

For the past four years I’ve been living in London and have become accustomed to moving roughly once a year due to landlords hiking rents or wanting to sell their property; or simply moving elsewhere due to problems that have occurred in the property – in the past I have shared various rental homes with bats, rats, and mice … so I think it’s understandable that I have needed to move so often (despite my loathing of the process)!

Last weekend I moved into a basement flat with my partner, and although having years of experience as a renter (with really good checklists in place that have been created due to problems in the past causing huge stress!), it still ended up being less than idyllic when I thought it would be a breeze, having done this so many times before.

I am fully aware that the majority of you will not have to experience such problems; many of you have lived in the same property for many years; but ensuring that your details are kept up to date is still absolutely vital (for you and us).

We want to remind you about the 10-minute challenge series on our website, something we created during lockdown when it became apparent that many of our clients don’t know where certain important documents are stored. We simply want to help you ensure that whatever you are trying to do or find is made that much easier and less stressful, because you have good record-keeping systems in place. We don’t want ‘future you’ to endure the struggle of some relatively basic tasks; being organised about this is key.

I would encourage you to set some time aside to prepare well for whatever life scenarios you can think of that might require decent and advanced planning … fail to prepare, prepare to fail.

BACK TO ALL BLOGS

Fail to prepare, prepare to failJemima Thomas2023-12-01T12:12:31+00:00

The big C

Dominic Thomas
June 2023 • 10 min read

The big C

If you have a television, it’s likely that at some point you will have watched an episode of ‘A Place in the Sun’ or the BBC’s ‘Escape to the Country’. You know the format – a 30-minute programme that would take 10 minutes to watch if it wasn’t for the constant of reminder of what you have just watched. I never really understand why despite each property being unknown, one is specifically described as a mystery house. These are popular shows (to put it mildly). We Brits are obsessed with house ownership and most of us hold onto a fantasy that ‘somewhere else’ is probably a better place to live.

I learned recently that one of the presenters of ‘A Place in the Sun’, Jonnie Irwin, who turns 50 this autumn, was diagnosed with terminal lung cancer in 2020. He has talked publicly about his illness and recently appeared on a podcast for insurance company AIG. Sadly, he does not have critical illness cover and is now on a mission to encourage people to get some. He believes it would help if advisers could ‘humanise’ the insurance, sharing stories about how it works and what their experience has been.

I think he has a point, and certainly in his professional life, he is adept at helping people imagine a better future for themselves. However, imagining a bleak future is obviously uncomfortable, something most of us try not to do preferring to leave this to dystopian books, films, TV shows and music. We simply prefer to ignore or deny uncomfortable truths, thinking “it will never happen to me”.

I’m 54. I don’t know if it’s unusual, but I have already lost many friends my own age to cancer. I’m guessing you know at least one person that has too. I have critical illness cover; I provide it for the team here as a standard benefit. It’s not cheap and frankly, I hope it’s a waste of money, because if it isn’t, then there has been a major, unwanted life event.

Over the last three decades, I have had to deal with various claims against cover that I arranged for clients. Not all of them died, some have recovered very well and whilst not forgetting the experience, it isn’t top of mind.

Given my background and when I started in financial services, selling products was what I was trained to do. Rightly or wrongly, I have been somewhat reluctant to use sales ideas that make people feel uncomfortable within my own business. I often haven’t shared the details of fairly harrowing stories of things that might prompt you taking out more cover (or some). I hate being manipulated and I struggle with the tension of using a true story that is designed to encourage you to get more insurance (even if we do remove commission). For that, I apologise. I have a drawer full of stories and with permission, I will share a few, not with the intention of getting a sale (we don’t even arrange protection policies these days – we refer you to a specialist broker); but to ensure you give this proper consideration.

I hope that Jonnie and his family find the miracle they seek.

If you would like to talk about financial protection, please get in touch. If you already know what you want and need, then head over to our professional connections page and give Cura a call or email.

BACK TO ALL BLOGS

The big CJemima Thomas2025-01-23T10:51:54+00:00

Who said ”watching paint dry is as dull as financial planning”?

Debbie Harris
May 2023 • 5 min read

Who said ”financial planning is as dull as watching paint dry”?

I’m sure lots of people have actually said/thought that … and in many ways, financial planning done well is indeed a lot like the painting process.

I spent most of last weekend with a paint brush in one hand and a roller in the other and I had a lot of time to bemoan my utter loathing of anything ‘DIY’ whilst I cracked on and did what was necessary.

It occurred to me after I stepped back and examined the end result of my frustrating (and frankly downright painful at my age) labours, that financial planning is A LOT like painting a room …

You first have to admit the need to make a change; then you have to make some decisions about what you want to do and when you want to do it; then it’s time for organising your equipment (I have discovered that a telescopic pole to extend one’s roller is a MUST); and then it’s the big one … pick a day and just ‘start’ – the preparation is the slog … I was taught well by my father though – sugar soap the walls, fill any blemishes, do the cutting in – and most importantly (like a mantra!) “let the roller do the work”.

There are obstacles in the way, literally and metaphorically – the family dog kept wanting to ‘help’ and I slightly under-estimated my paint quantity requirements (spotting this before it became a problem; meant I only had to make a small adjustment to my plan and simply ended up using a slightly different shade on one wall).

The bulk of the time you are painting ceilings and walls, it is dull, unglamorous, tedious, painstaking and seems to go on forever. But … that moment when you know you are loading the roller for the last time … pure joy! Until you look back at what you’ve done and it looks patchy because it’s wet – which is totally normal but gut wrenchingly soul-destroying.

So you shuffle off to spend what feels like another lifetime cleaning paint out of the brushes, rollers, trays etc; you remove stray paint from your hair, your glasses and your elbow and you get cleaned up.

You avoid looking at the room for a good hour or two (read what it says on the paint tin) – and then you tentatively go back in and check … and lo and behold – it’s glorious. It’s a thing of beauty – you send pictures of it to your friends and tell them how wonderful it looks (they say the right things in response of course – but how excited can you get about a ceiling and four walls?!).

And you pat yourself on the back (rightly so – but gently because that aches too) – the preparation, the planning, the hard graft, the mental effort, the tedium, the waiting – all absolutely worth it.

BACK TO ALL BLOGS

Who said ”watching paint dry is as dull as financial planning”?Jemima Thomas2023-12-01T12:12:32+00:00

What is a financial planner?

Dominic Thomas
May 2023 • 10 min read

What is a financial planner?

The nature of a complex world is such that terms are used somewhat glibly to describe something. There are lots of roles, titles and descriptions that have altered or perhaps been extended or broadened over the years. Language is constantly changing.

There was a time when there were only two types of financial adviser, a Tied Agent or an Independent Financial Adviser (IFA). This role involved the selling and implementation of financial products. The distinction that IFAs made was that they were working on behalf of their client, selecting the best from the entire marketplace, whereas the Tied Agent sold whatever their company made available. Such simple, binary distinctions are long gone.

Today we have mortgage brokers, insurance brokers, credit brokers, financial advisers, IFAs, financial planners, wealth managers, financial coaches, lifestyle financial planners, restricted advisere and financial guidance and I am sure a lot more besides.

As with most sectors, financial services has evolved and professionalised. Definitions are sometimes left very vague, I might argue that this tends to benefit those that wish to obfuscate. One example being that of the term “restricted”. It isn’t beyond the imagination of most of us to appreciate that a restricted solution means, not able (or commercially unwilling) to consider the most appropriate solution from the entire market place. So it will serve those that are restricted to hide such a term deep in their literature, contrary to regulatory requirements.

Being independent doesn’t mean being a sole operator, it can, but in terms of financial services it means having access to the whole of the market of financial products and solutions. This places the adviser in the best place to select a suitable option for you. However it is still basically arranging stuff, which is fair enough, but not real planning.

Financial planning is helping you to clarify what you want your future to be and considering your current position, how to best achieve your goals, or recognise that they are not realistic. Products are very much last consideration. By way of illustration, suppose you have an ache, the medics don’t jump straight to heart surgery. Your issue may be small or life threatening, but there are obvious pertinent questions and analysis to be performed before deciding what needs to be done, by whom and with what “tools”.

A financial planner will create the opportunity for you to discuss your ambitions, your struggles with money and the reality of your present situation, without judgment, in may respects the adviser should be a “blank canvas” a term that Freud brought into consciousness. Once assessment has reached a sufficient point we can begin to build a plan, a model of your future income sources to support your lifestyle and spending choices. Nothing is “set in stone” everything can change, importantly a model is simply a version of the future (a simplistic one). It will be wrong, but the main point is to help clarify your goals, have a plan and review, review, review keeping you on track.

I might argue a better term for financial planning is planned spending, because is reality that is what a “lifestyle” really is. Your choices about what and how you spend.

Complexity arrives in the form of a changing landscape of investment markets, economic realities, geo-politics, taxation and law. This doesn’t dictate how you alter things, but how we shape the dance between them and your changing personal situation. None of us are the people we were at 18, but there are echoes. A planner, a proper one, will help you navigate your motives, desires and the realities of your choices, not simply arrange your pension or “manage the money” which to my mind misses the purpose behind it all.

The fact is that at the heart of this there are problems that are universal. Firstly, few if any of us wish to reduce our lifestyle, however you define it. Most people are not good at holding onto the money that they earn, inherit or win. Most of us are not good at discerning the cost of a lifestyle either now or in the future. It’s far easier for us to account for how we would spend an imaginary lottery win than how much it will cost us to live as we are for two, three or four decades once we are retired, or frankly what we spend each month now. We are all tempted by the illusion of get rich quick solutions, starting your own business, writing a best- selling book, setting up a social media account where the ‘likes’ are followed by pounds, or of course the next big one, cryptocurrency or whatever you fancy.

The truth is much harsher. It’s a long, slow process, full of setbacks as well as successes. As for advice from friends and family … well I don’t know them, actually scratch that, I do know some of them, you refer them to us … but suffice to say that qualified, regulated, impartial, non-judging, prudent, long-term, evidence-based, evidential advice is likely to be of greater value with no vested interest in whether you holiday in Bournemouth or the Bahamas; Charlton or Cuba.

BACK TO ALL BLOGS

What is a financial planner?Jemima Thomas2023-12-01T12:12:33+00:00

Previous 789 Next