Invest and plan for the future in 2012
Feature
by Nathalie Bonney
Whether you have unhealthy debt levels or want to plan for your retirement, take the time now to rethink your finances and see the positive side effects throughout 2012.
START INVESTING
If you're fed up with paltry returns on savings, investing could be an option. The returns may be greater but this also comes with more risk, so weigh up your attitude to risk before opting where to invest. Ask yourself how you would react if you lost all your money. Are financial commitments or a short timeframe, such as saving for a house deposit, preventing you from investing?
How much of an investment risk-taker are you?
As a rough guide, experts recommend only investing if you're able to tie up your money for at least five years. Putting a small amount of money away each month is a great way of getting into the habit of investing.
You'll also benefit from ‘pound-cost averaging', which means when share prices are low your monthly sum will be able to buy more units of a fund, compared to when prices increase and your money will buy less units. By doing this you will spread the risk of your investment going down.
New investors don't have to start reading up on individual stocks, either. Instead, they should build up a portfolio of collective funds consisting of either investment trusts, which buy a set amount of shares in other companies or unit trusts, which pool together investors' money to buy shares. That way, if one investment is doing particularly badly the whole portfolio will not crumble.
Invest your portfolio initially through a stocks and shares ISA to enjoy the tax advantages. The annual allowance is £10,680 minus any cash ISA allowance you've used.
PLAN FOR YOUR FUTURE
Life expectancy for a British male is now 78.1 years and 82.1 years for a woman, meaning many of us are - justifiably - worried about having insufficient retirement funds. Unfortunately, a lot of us are simply burying our heads in the sand: 37% of ‘economically active' 55-year-olds haven't yet planned their retirement, according to Aviva's Real Retirement report.
If you're not already paying into a pension and your workplace offers one, you are missing out on free money. You don't have to pay tax on pension contributions and most employers also make a contribution that, depending on the terms, could match or even exceed your own monthly payments.
The number of Britons without a will is now 29.5 million, according to unbiased.co.uk, including 35% of the over-55s. Writing a will seems to fall to the bottom of our to-do lists, even though failing to do so could result in a legal headache for those you leave behind.
It's possible to buy a will-writing kit from WHSmith and do it yourself. However, this only works if your family situation is straightforward. For the rest of us, it's best to seek professional help. Unbiased.co.uk can help you find solicitors specialising in will writing. Also check out the Institute of Professional Will Writers (ipw.org.uk).
Finally, don't forget that if your total assets (including investments and savings) are valued at more than £325,000 as an individual, or £650,000 for a couple, you are liable to pay inheritance tax of 40% on anything above this threshold. And, according to the government's draft finance bill, this threshold is frozen until 2015 at the earliest. But it's possible to minimise your bill using some clever gifting tactics. For example, you can gift money each year.
How to cut your inheritance tax bill
However, you will have to live another seven years for the gift to be outside your estate. It's a pretty complicated area and seeking specialist tax advice is recommended.
Having acted as an executor a number of times I can assure readers that it is far more difficult, time consuming and expensive to administer the estate of someone who has died intestate. Any will is better than no will because the beneficiaries can vary the will by mutual agreement within two years of the death.
Don't think that your beneficiaries will agree? Then definitely time for composing a will.
Before investing at anything the best choice is GET FINANCIALLY EDUCATED and you will not regret. WHY? I truly believe that FINANCIAL EDUCATION is the key for all kinds of financial challenges, including Recession like in Europe, from countries that were spending money without having and borrowing more and more money to pay their debts.
The economy does not dictate your financial circumstances.
Anybody can get started reading book from successful people and investors; and not simply buy -with all my respect- financial planners or Bank products, because you want to invest. Most of them tell you how to deposit your money for the long-term. The FIRST and the best way to INVEST and protect yourself at any time is EDUCATING YOURSELF and then LEARNING how to get your own business as 1) Create a Business (i.e.Online Business); 2) Invest in Real Estate; 3) Buy smart stocks from savy investors, and not from Wall Street or similar ones; and 4) Invest in Commodities. HOW can you achieve that? FINANCIAL EDUCATION is the main key. 2013 will be the year for global recession to a Global Depression maybe as of 2015 to last 8 to 10 more years. Hope is OK, but EDUCATING FINANCIALLY and TAKING ACTION can change any reality.
It’s not too late if you are 50, or 60 or 70 years old and decide to EDUCATE YOURSELF and LEARN how and where to put your money for your retirement and you will feel much better. Anybody can get started reading book from successful people, investors or forums; and not simply buy -with all my respect- products from financial planners or any Bank. They will tell you “how to deposit your money for the long-term”. There are much better options than the traditional way of "saving money for the long-term" sales pitch. In my opinion, whoever put his/her money for the long term will loose everything after US Stocks Markets collapses. As I said, 2013 will be the year for global recession to enter into a Global Depression and last eight to ten more years.