Getting Together Later in Life Getting together with a new partner later in life can have its difficulties, especially when there are children from a previous relationship involved. While there are many practical issues to resolve, ranging from deciding whose furniture to keep to agreeing on parenting philosophies, often the most complex issues are to do with money. People coming together in a second relationship have so...

Money Conversations Money is a huge part of our lives and yet we are reluctant to talk about it. Of course, it is often the subject of arguments and the cause of anxiety when it is in short supply, but that is not the same as having an objective, forward-looking conversation about money. Our desires are unlimited whereas the supply of money is not, so to get the most enjoyment out of life we need to make the best use of o...

Investment Risk The definition of investment risk is not the probability of losing money, but the probability that the investment outcome will not be what you expect. Risk therefore includes volatility as well as loss. Psychologists have shown that investors put more weight on the pain associated with a loss or drop in value, than they do on the good feelings they get from gains. Whether you use an adviser or manage your ...

Why Women Need to Plan For various reasons, women face a higher level of financial risk during their lifetime than men. There are differences between men and women with regard to lifespan, lifestyles, income and attitudes which can have a negative effect on a woman’s financial position. Women live around four years longer than men on average and, in a heterosexual relationship, tend to partner with men the same age or o...

Currency Risk for Investors Investing offshore helps to spread risk because not all markets around the world move in the same direction at the same time. Diversification between markets offers the opportunity to reduce risk and improve return, however along with this opportunity comes the risk associated with fluctuations in exchange rates. These fluctuations have a direct effect on the value of investments. For example, ...

Redesign Your Life As we go through life we start accumulating all kinds of ‘baggage’ that we carry around with us. Baggage can be psychological such as past experiences, both bad and good, that influence our fears and hopes in the present, or it can be physical such as property and possessions that restrict us to a particular location or way of life. In fact, there are many ties that bind us including financial ties,...

Do You Need a Nudge? Despite the best efforts of economists to portray people as rational beings who make optimal choices, it is clear we have inbuilt predispositions to being the complete opposite. In their best-selling book Nudge (Penguin, 2008), Richard Thaler and Cass Sunstein outline situations in which people are least likely to make good choices. Unfortunately, the free market and open competition allow companies t...

The Big Picture There are three important components to a financial plan: an assessment of your current financial situation, a vision of what you want for the future, and a strategy for how to get from one to the other. The first part is easy, because it is simply a case of putting together a few numbers and doing some analysis. This is an objective exercise which has a clear answer. The hard part is setting the vision fo...

Why Investors Make Bad Decisions Many people complain they have bad luck when it comes to investing in shares. While luck may certainly play a part, more often than not the problem is one of bad decisions about buying and selling. Underlying the bad decisions are psychological factors, the study of which is termed behavioural finance. We allow emotion to interfere with logic when it comes to making choices simply because ...

Your Money Priorities It is human nature to always want more than we have. Without that drive for more, no doubt economic development would come to a standstill and our lives would be much simpler. The combination of insatiable needs with limited resources means we have to make choices. To determine priorities it is first necessary to understand not what you spend but why. The motivation to spend comes from many different...