If you have quarter of an hour to spare, why not listen to my interview with Paul Lewis for the latest episode of The Investing Show?
Paul Lewis is best known as the presenter of Money Box on BBC Radio 4, and has some really interesting things to say on a wide range of issues.
Here are some of his key messages:
The financial industry is not your friend
“Most of the financial service industry is, of course, honest. But it confuses people, and I think sometimes deliberately confuses people because their job is to make money — make money out of your money. And very often they don’t make anything useful like, you know, a bookcase or a television or a car. They make money out of money, and it’s your money they make it out of. So that is their purpose in life. And of course they’ll be friendly. All the time they’re making money. So you can’t think of them as a friend. They’re not your friend. They’re a business. They’re there to make money and you have to be very aware of the things they might do to take money off you.”
Investment fees are very opaque
“There are organizations within the industry that are trying to make things better for consumers. The True and Fair Campaign wants charges, for example, to be completely clear, so when you make an investment, you know how much it’s going to cost you. There are even laws that say they should tell you, but they’re not very clear. When I look at charges on investments, they’re not clear to me. It’s very hard to work out exactly how much will be taken off your money. It’s like there’s lots of little taps at the bottom of your pot where your money is that other people have control over.”
Never act on investment tips in the media
“If you read the financial pages of the newspapers, and if you go online, you’ll find lots of tips about what to invest in. (But) they can’t be trusted because nobody knows what’s going to happen to stocks and shares. People who knew what shares were going to go up this year and what shares were going to go down would be making money; they wouldn’t be writing in a newspaper. Generally, if you want to invest, the safest way in the long term is to buy a fund that just tracks the whole market.”
Social media is a minefield
“Never, ever, ever trust financial advice you get from social media. A lot of it is written by people who don’t know what they’re talking about (or) by criminals who want to steal money off you. There is perhaps one exception to that. There are now regulated financial advisers who have a presence on social media. But make sure that you have checked them out, they’re regulated, and they know what they’re talking about.”
Parents have a key role to play in financial education
“Treat it like sex education. It’s important that children know how the world works as young as you think it’s appropriate to tell them. And you can tell them about money very young. Research by Cambridge University showed that children learn their money habits from their parents when they’re about seven or eight. They see how their parents behave about money. Children have got to know that money isn’t infinite. It’s not a tap you turn on when you want something.”
Thank you to Paul Lewis and to Timeline for sponsoring this video series.
Watch Paul Lewis on The Investing Show here:
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