Investing myths

12 May 2020

Financial adviceLet’s face it, investing can be intimidating. There are so many funds to choose from, we often don’t know where to start. And then there are the typical investment traps we fall into. How do we know what is real and what is myth? This uncertainty and procrastination could have detrimental consequences for our savings later in life.

A qualified and reputable financial adviser will help you sort fact from fallacy and steer you on the correct path to wealth building in easy and simple steps.

Myths

Investing is complicated – We don’t have to be Warren Buffet or a stockbroker to be able to navigate the storm that is investing. For most of us, our investment needs are narrowed down to retirement and saving for education or wealth. An experience reputable financial adviser will tailor-make a strategy that is simple and easy for you.

The more funds you have the better – More isn’t always better. We often fall into the trap of having too many funds in our portfolio as we try to be as diversified as possible and spread our risk. All you need are a few good funds that are diversified over various asset classes and economic regions to get your investment foundations going. There are many funds that are already structured in this format to make it easy for you. Your adviser will recommend the right ones for you. 

Funds cost a fortune and only the rich can afford the good ones – Funds that charge the highest fees don’t necessarily give the highest returns. There is no correlation between high fund fees and high returns. There are many well-structured and balanced funds that don’t cost a fortune. Ask your adviser to investigate them for you.

Savings accounts are still best – if you are looking to save money short-term, then a savings account will do the trick. Savings accounts these days offer interest rates lower than inflation, so if you are saving for a few years, you might end up with less money than you had. Always look for a savings vehicle that offers inflation beating interest. There are many online savings apps these days that offer good returns. Catalyst app gives you access to world class diversified dVAM funds at low costs and you can withdraw your money as and when you need it without any penalties.

Regular people can’t get rich from investing – If you started investing a regular amount at a young age, you could be a millionaire when you retire.

A 25-year old investing £300 a month could be a millionaire by the time they reach 60 (depending on the markets) if they live within their means and save regularly.

Example of returns on long-term investing.

Growth rate of 8% for £300 invested monthly  £400 invested monthly
10 years £62,125 £82,833
20 years £221,386 £295,184
30 years £603,600 £804,809
35 years £956,192 £1,274,938
40 years £1,490,564 £1,987,447

*Annual increase of 3% to beat inflation

Investing doesn’t have to be difficult. Your deVere Acuma adviser does all the difficult planning for you according to your individual investing needs, so you can sit back and watch your money grow. [email protected]

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above