Every year we make a promise to ourselves that we won’t make the same financial mistakes we made last year. And every year, we wind up breaking our own promises, falling further into debt and going backward. But even if we’re not winning the war, we can still win a few battles here and there.
Recently, a bunch of people at the top of the business and investment world were asked what one thing people should do with their money this year, even if they’re useless with money. Here’s what they had to say.
Buy Investments You Can Forget About
Terry Smith is the founder of the company, Fundsmith, a firm that manages people’s investment. His advice – which shouldn’t come as any surprise – is to choose an investment that you can forget about. There are people, he says, who have the time to manage their investments on a weekly or even a daily basis, but they’re the exception to the rule. What’s more, those very people tend to do badly when it comes to making money, since the trading algorithms of large enterprises are a lot faster and more effective than they are in the short term.
His advice is to sit back and relax. As far as he is concerned, company profits are on the rise and the stock market is going up. Buy an indexed fund, he says, that spreads the risk and forget about it. These funds don’t require you to be constantly vigilant, and so you can get back to focusing on earning money.
Track Down Money You’re Owed
According to Simon Bain, finance editor at The Herald, most of us are owed money by somebody. If there’s one thing you should be doing this year, he says it’s tracking it down. Often people are owed thousands of dollars thanks to injuries of negligence. Hupy and Abraham, a law firm out of the US, says that people can claim money back for lots of things, even bad medical care or dog bites. Sometimes they can be owed hundreds of thousands of dollars, especially in medical cases.
Bain also says that many people are owed pension money by their previous employers. Workers often hop from one job to the next, collecting pension benefits but never actually cashing them in when they come to retire, either because they’ve forgotten about them, or because they don’t think it’s worth chasing up. He says that he managed to boost his personal income by nearly $2000 a year, just by pestering his former employers for money.
Start Overpaying Your Mortgage
Mortgage rates have been low for a long time. And while the central bank will want to keep interest rates for as long as it can to help out its cronies in the financial sector, rates won’t stay low forever. When demand in the economy picks up, which it may do now that consumer confidence has increased, interest rates will rise. And if interest rates rise, many people will find themselves struggling to pay their mortgages. Emily Cadman, a reporter for the FT, suggests, therefore, that people start repaying their mortgages now to get their payments down in the future.