My experience to date with Financial Planning
I spend much time in my daily life and job researching and talking to people about personal finance and financial planning. I love to ascertain people views on financial planning and what they think are the right choices to make. There is no perfect answer and everybody seems to think differently. It is so interesting to hear what people invest in and why they made that choice. I have written and will continue to write about the main ways of investing your money on the Mrs Mummypenny website. I see the main ways of investing being property, a pension and investments.
Money is a funny thing, we can’t live without it and when you have more money than you need you have more choices. It’s a taboo subject that many people do not like to talk about. Ask anyone their salary and see them recoil like you have asked them the worst question in the world! But I like to dispel that taboo and talk about it. If we maybe talked about it more we could help people out of debt and other money difficulties.
My Money Picture
I am not that happy with our current money situation. In short we have equity, some pension and no other savings or investments. I have written lots about the world of pensions as I have recently sorted out my pension situation. You can read more hear about the decisions I have taken and the level of investment I have in my pension pot.
Most of our invested money is in property. All held within the equity of the house we live in currently. I have been on the property ladder for 17 years now and have moved three times getting bigger and bigger houses and have benefitted from the rising house prices. We have around £300k equity tied up in our house. And are currently looking to release that by selling the house and moving to cheaper to buy area. This will mean some of our equity can be released and moved to a different form of investment.
Our current picture feels too much like all the eggs are in one basket and if there is one big thing I remember from the first learning about investment is to diversify and spread the risk. If property value were to suddenly drop, it has happened before, then we would be in trouble.
Investments & Savings
When it comes to this area of money I have very little. This feels unbalanced and something that needs to be addressed. There have been times in my life where I have had investments. I have held shares in the past and I held a stocks and shares ISA for 14 years. But things change which have meant that investments were cashed in and used to fund life.
My stocks and shares ISA was cashed in three years ago to help fund our house extension. This turned out to be an amazing investment where 80k spend turned into £120k of extra value in our house over a three-month period.
But I want to Invest
I am currently in the process of considering various investment schemes and I think diversification is key. This also means I can afford to take a risk as this money will be tied for the long term. Once the house is sold we have some excess cash left over to invest so this is what I am looking into. I will also be taking advice from a professional advisor.
Firstly, I am considering investing into a low fee and tax efficient stocks and shares ISA. There is a wealth of these products around now that can be opened quickly and with a lower amount of investment.
I am also considering alternative forms of investment. There are various property investment companies popping up who offer great returns, the Resort Crowd is an example of one of these companies. This is an overseas crowdfunding platform, offering fixed annual returns from a tourist hotspot in Cape Verde. This could be a great option for investment.
I am also considering an investment service. A tool which will investigate and interpret the market using its own clever algorithm. This algorithm will inform you of upward trending funds so you invest and exit at the right times. Larger investments are required here.
I am also considering different investment tools such as art and wine. Can money be made from investing in these areas requiring some knowledge and research. We have in the past invested in a unique piece of art that we commissioned to match our dining room. This should go up in value given time and popularity of the artist.
What does your financial planning picture look like? Are you heavily reliant on equity and property or do you have a more even split between Equity, Pensions and Other Investments?
Please be aware that any form of investment can go up and down and you may want to consider advice from a qualified IFA. Just make sure they are recommended by a trusted friend and check their investment levels as some will only work with clients with an investment level of at least £150k. This is a collaborative post.