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I feel sick that I am not going to the Caribbean and Patagonia…

By Barry Davys
This article is published on: 3rd May 2024

How would you feel knowing that your hard-earned savings could be earning 9.6% pa for the next 30 years but that you have opted for an alternative paying just 2% pa instead? Ok, this is quite provocative as they are two different types of savings.

According to the Schroder 30-year forecast, these could be the average annual returns on the Indian stock market and deposit accounts respectively.

So now you may be rationalising your decision to use a deposit account by saying something like “Oh well, I don’t like the stock markets and I don’t know much about India”. This is fair enough.

Your best friend has just said “We are off to the Caribbean for a few weeks and we have always wanted to go to Patagonia so we may nip across there for a bit after the Caribbean” …. “Blimey, how can you afford that?” is what you might say, or at least think.

How interesting it would be to hear “We put some of our money in shares in Indian companies and they have paid for the trip” Your average return of 2% pa may now seem pretty sickening.

Would you invest for 30 years? Maybe, maybe not. Will you be around for 30 years, depending on your current age?

And here’s a funny thing

  • At age 50 your average life expectancy is 82 for men and 87 for women
  • At age 60 your average life expectancy is 83 for men and 87 for women

There’s more

  • At age 70 your average life expectancy is 85 for men and 89 for women
  • At age 80 your average life expectancy is 89 for men and 91 for women
  • At age 90 your average life expectancy is 94 for men and 95 for women

The older we get the more our life expectancy increases. All of this means that you could well be around for 30 years or more if you are under the age of 60. You do not however have to have a 30-year investment time horizon. The minimum period we would suggest is five years but after that there is flexibility with timing.

It is not always easy to choose your savings but here is how we help with guidance:

  • Leave money aside for an emergency fund (yes, in that deposit account)
  • Complete a reliable risk assessment exercise to determine your attitude towards risk
  • Show you different combinations of investments around your personal risk profile and discuss the options with you
  • Never put all your money in one type of investment eg not all in a deposit account
  • Review your attitude to risk regularly because it changes as your circumstances change
  • Adjust your investments when required to ensure you are taking the appropriate level of risk for your circumstances

Which of the following applies to your situation?

  • Have too much money in bank accounts?
  • Have recently received an inheritance?
  • Are selling a business or have share options about to vest?
  • Have losses on your current portfolio?
  • Do not review your risk profile and investments at least annually?

If the answer is yes to any of these questions, please feel free to arrange a call with me using my online system to book a time that is convenient for you.

It is an opportunity to get a better outcome from your savings, provide for your family, and help give yourself a sustainable income in retirement.

Undoubtedly, you will be more relaxed too knowing that you have the right risk profile for your savings and that it is updated annually.

Article by Barry Davys

If you would like to have an initial meeting and you live in Barcelona or the Costa Brava it can be either a complimentary face to face Zoom call or an in person meeting. To book a Zoom call please choose a time which is convenient for you here. If you prefer a time to visit Barry in his office in central Barcelona contact Barry on or whatsapp +34 645 257 525.

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