Money Box Live: Invest or Save?

Pohjaan, että pahdalla on suurin järjestelmä. Ei kuljettaja, minne teidän tuotot menevet. Valjo on suomalaisten maidon tuottajen omistamaan ja siksi valjoaimontuotot jävätsuomeen. Olen aimo ruokaa alan ammattilaisten kumpani, kun valitset minut tuot kotimaisia maitotilla lisää. Valjoaimo onnistumisen ainekset. Kyllä kyllä. Hello, in today's podcast, we're asking the question, what do you think of when you think of investing? Lendelast 2019. Oh, you've got one! Do you picture a noisy trading pit full of people yelling "bye" and "sell" or maybe a more modern city of London, full of sleek buildings and sleeker men and women? What do you picture someone sitting on the bus checking their investment platforms app? Do you picture your own pension? The government wants you to think of investing and picture yourself. In fact, it's appointed the Investment Association, alongside 19 financial services firms, to lead an industry initiative to persuade people with savings to move at least some of that cash into shares. Now, as a nation, we invest much less than in other similar countries. So what's going on? Our reporter Joe Krasnä has been speaking to people in Liverpool to find out. We're in a situation where prices arise and the mortgage rates are increasing et cetera. So overall, there's a little bit more of a thought process behind keeping money aside for that. In the need and cases, easy access to money, rather than going through. An investment sort of portfolio, needing to pull it back out again with the risk that obviously what goes in could also become sort of less than what was invested as well. I tried to save something from month to month, but sometimes it's different depending on my expenses each month. Do you invest? I have cash, I say, that I've not invested in stocks and shares, I think really for fear of losing everything. Although I know that in theory, if you keep it long enough, you should make more money than leaving it sitting in a bank account. Is there anything that would encourage you to invest more? I guess if I knew that I wasn't going to lose everything that I was investing, I might be more inclined to take a chance. So what do you think? What puts you off and what would you need to take the plunge? Get in touch. You can email us at [email protected] or send us a message or a voice note on WhatsApp. The number is 0306-783183. Now let's talk to Karen Norley, whose director of corporate affairs at the Investment Association, which represents the investment industry and is leading this campaign. Karen, hello. You also did 10 years, I should say, at the regulator, the financial conduct authority. So you have seen this from some different positions. Just explain what this new campaign is and why you think it's needed. Yeah, I think if you get to the heart of it, I think in this country, so many people when they do imagine investing, they just don't see it, it's something for them. And that is something that we really need to break down because I think as you mentioned, there are lower levels of investment in the UK than there are elsewhere. But actually, for individuals, it makes a big difference to their long-term future if they're invested versus leaving large amounts of money in cash. So the reason we've sort of, the government initiated this and this is very much an industry-led and industry-funded campaign. But it is to take that educational point, so it's not a commercial campaign, it's not to invest in this or invest in that. But to sort of change mindset to convince more people that investing can be for someone like them. Well, we're going to get into some of the, whether it can be, whether it always is, very shortly. Around 7 million adults hold over 10,000 pounds in cash savings. That's according to the FCA. So I suppose those are the kinds of people you're targeting. But I can understand investment platforms wanting us all to invest more. They make money from our fees, after all. But isn't this also about benefiting the government? Because growing investments means more money going into the economy. Isn't that the motivation here? I think it is actually too forward. And I think there is a benefit for the wider economy. I think people don't actually realise what investing actually does. But it's putting money into companies that pay taxes, that hire people, you know, create jobs. And that is great for the overall economy. But it also has long-term impact on individuals who are doing the investing. They'll have more for their retirement or for whatever their long-term plans are. We see it very confidently. There are no guarantees. And people do have worries, don't they? Here's what one Moneybox listener had to say. Hi, Moneybox Life. It's Cath from Bingley here. It's okay being told to invest by someone who has plenty of money. But someone like me who is risk-averse and grew up poor, isn't going to risk their hard- and cash. Invest in British infrastructure. Not likely. Cath, thank you very much indeed for that. We've also had a message from Gerald in Nottingham, who says, "Some of us have the kiss of death with shares. I don't think anyone should invest what they're not prepared to lose." We heard, Karen, from many other people in Liverpool worried about the risk. It's not that some people don't know that investing isn't an option. It's that they don't fancy the risk. Yeah, I think that's probably true. And I think that fear of risk is definitely one of the reasons that we know that people aren't investing. But I think it's important, and part of the objective of the campaign is to make it clear, it is not about taking all the money that you have and putting it on one share, that one company that may lose you all your money. This is about small amount. You can start with a very small amount. You don't have to invest everything. It is important for people to still have cash for their emergencies or their day-to-day expenses. But I'm recommend about six months worth of incoming cash savings, don't they? Yeah, I mean, there's lots of different variations, but definitely. The campaign is very much focused, I think, you use the number £10,000 and above. So these are people sitting in more than £10,000 in cash. And that doesn't mean that people should take that whole £10,000 and invest it. But it might mean, as low as £5, £10, £25 a month, whatever it is that is available, and just get started. Little and often is the best way to think about these things. It's not an all or nothing kind of scenario. Well, joining us throughout the programme today, Karen is David Dodgson, an independent financial adviser with the private office. David, hello. Thank you for being with us. It's a really interesting point, Karen's making, isn't it? But we've seen higher interest rates recently, which have made savings accounts seem more attractive. And also, I suppose, geopolitical unrest in Ukraine and the Middle East, is that all contribute to making some investments seem riskier? I'm sure it does for this to, yes, it's bound to really, because it does mean that stock markets do, let's say, fluctuate quite a bit during those periods of geopolitical uncertainty. But from what Karen was saying, I completely agree with it. It's about thinking about the long term. And the fact of the matter is, if you commit to the long term with this sort of investment, you'll be in a much better place to actually overcome that volatility and those bumps in the road that you'll definitely experience if you invest in stocks and shares based investments. That's certainly the case. Well, Karen, you've decided to front this campaign with a squirrel. Now, pull the list, played some of that campaign on Saturday. Let's just have another listen, though. This is one of the adverts. "Savis grow here. Investing is like exercise. It can be daunting to get started. But once you make a move, you're well on your way. And the long term benefits are well worth it." So, some of the same messages that you've been bringing, Karen, and you're running road shows, I think, starting in Wales today, you've had stunts like free taxi rides if people get in and talk about investing. What are you actually doing to reach people across the UK with this message? Sure. So, the campaign is just kicking off. So, you'll start to see "Savis grow out and about." But in terms of. You mentioned. We launched in Manchester with a series of taxi cabs where you can get in and have a conversation about investing. Today, starting in Cardiff at the coffee spot has been rebranded as the Saturday shots. But apart from those stunts, what are you doing across the country? And so, part of it is around people talking about money. And I think this is the big thing. So, whether it's because you see an adverts or because you see. You go into a coffee shop, the message that we are getting out and we are trying. Through the advertising which will build over time is. Start having those conversations. Start talking about investing. It's not something that people talk about. But we know from our own research, there's lots of interest in learning more. And people feel more comfortable when they've had a conversation with someone they know about investing. But people aren't having those conversations. Are you actually woefully behind the times a bit with this campaign? You're offering a squirrel advert and coffee shop pop-ups. Teenage is a trading crypto online using apps. Is this whole campaign just a little bit. The team? Well, I think it hits lots of different spots. So, we are working with content creators on social media. But also, there's a huge percentage of the population that aren't doing that. There might be young investors who are using apps and absolutely there are many ways that you can invest. There were a lot that aren't, and actually some of those ones who are not comfortable picking up an app are really important to hit as well. They're often the ones with large amounts of cash, and they still have long-term objectives, so midway through their career, etc. And so there's a lot of different people that need to hear a message, and it's the objective of the campaign is to target those messages and delivery over time to the right audiences. And advice you find on social media, not always the best. I'm sure we'll get into that. Really briefly, David. It's important to say, isn't it, that investing is not right for everyone, not like exercise, which is what's happy the squirrel is kind of talking about, but investing isn't necessarily for every single listener. Not necessarily, you're correct. And there are other options that you have. Another priority is some people want to reduce their mortgage. Some people absolutely need to keep more cash available in the, to cover for emergency, emergencies, etc. So you've got to look at your broad financial position before you actually commit. Liz has emailed a long list of reasons why she prefers to keep her money in a cash iser. But she also makes a point that I think is quite interesting. She says, "I'm concerned that if I did put money into shares, they would need to be with very ethical companies. I've not yet found a package of stocks and shares, which gave me the ethical reassurance I require. Thank you very much, Liz, for that." So the government has told us it wants to create what it called a new generation of Brits who are investing, making their money work harder for them. And we did already have some of what's known as retail investors, normal people investing, people like Moneybox, listen to Robert in Essex. Quite a few people only invest in cash isers these days. Words I've had a huge amount of fund and interest to be invested in the stock market over the last 30 years. And it's been a lot more profitable as well. 4% is on the cash iser and I think I'm looking to gain probably near a 20% a year on my stock prices. And obviously there is a certain risk involved there, but with a bit of careful planning and probably initially using managed funds, people who know what they're doing from vegetable companies. The risk can be relatively small and gain as considerable by comparison. David, what do you see with your clients? What kind of income level do people typically start thinking about investing? Well, if someone says to me I'm after 20% per annum, I usually start managing their expectations to be honest. It really is more a case of looking at a rate of return that's above inflation really, because investment returns tend to fluctuate with inflation. And that's the key thing about investment is making sure that your wealth and your savings are not eroded by inflation over time. And there's plenty of evidence to, let's say, prove the points that investing in stocks and shares over the long term. Like Robert says, does the trick? Yes, in it for the long term. I feel like we're going to hear that a lot throughout the program. Absolutely. We heard Karen from one of those people at the start of the program that investments aren't as easy to get your hands on as actual cash in an easy access savings account. How long can it take to get your money out of an investment platform in an emergency? I think it will probably depend on the individual product and platform that you have, because one of the things about investing is there are lots of different ways to do it and lots of different products. But you know, David may be able to say more on his side. Yeah, it depends how you're invested to be fair. If you've got something that's invested in a portfolio of stocks and shares directly in stocks and shares, you've got to sell them down, settle them, and they have them and he paid out. So it could take up to five work in days with other arrangements. It can come out much more quickly than that. Okay. Which is all useful for people to know, isn't it? I want to ask about how to actually invest what the practicalities are. But I don't think we've fully got into the why yet. Now Karen, you were talking about the value of savings being eaten away by inflation. Today we learned that inflation was about 2.8% in the year to April. And analysis from money facts suggests savers have lost up to 19 pence per pound saved in real terms since 2020. Simply because inflation significantly outpaced the rates they were getting on their savings. Some of our listeners might be wondering though, doesn't inflation also eat away at the value of returns on investments? So inflation being sort of as prices get more expensive. And I think the difference is is if you take your money out after investing and you had a certain percentage, sorry after cash, versus if you have, you know, you return over the long time if you invest. And I suppose if I give you sort of another set of which might be easier to sort of, or another way of looking at it, which is some of the research that we've done. So if you had put a thousand pounds in a, you had a thousand pounds to invest 10 years ago and you put it either in cash or you put it in a sort of diversified global equity fund, which is just sort of a collection of companies spread across the globe. In 10 years, you know, your buying power of that thousand pounds plus your interest would be about the equivalent of what you could have bought for 840 pounds. So, you know, your buying power is 840 pounds versus a thousand, which you put in. So that's, you know, you get less. But if you put it into an investment, it would be closer to 2,970. Okay. Because of the return to higher, it basically helps counteract the rising prices of inflation. Yes. And if you look back historically, typically that is true. People invested in the longer term, but some of our listeners will be hearing that answer. They'll understand the theory. But they'll also be thinking that if they accidentally make a poor investment or if there is a significant market crash just before they need to get the money out, they could potentially lose even more. What would you say to them? So I think there's some really interesting research and it's one of my favourite because it sounds like exactly like something I would do, which is investor the worst possible time, you know, the day before a stock market crash. And a van guide, which is an investment company, did some research and they called it the unluckiest investor, which basically had you invested, you know, going back to 1997, you know, in all the worst possible time. So the, you know, the day before the financial meltdown in, you know, the day before the invasion of Ukraine, you know, COVID, etc, etc. So if you had put in lump sums literally at each and every one of those sort of tolling up to, you know, they looked at 45,000 since 1997. Again, you know, your investment would still be worth 200,000 versus 64,000 if it had been in cash. So, but you're right, if it is something that you know that you're going to need right away at a certain day, you know, we've talked about the long term, you know, long term is what investing is for. This is, you know, where you can afford to write out some of those, those bumps over time. You know, if you know you're going to need the money for short term needs, then, you know, investing probably isn't, you know, it depends on individual circumstances. Okay, it is around long term being able to manage those fluctuations. Long term, we've heard it again. Well, unlike most savings accounts, though, of course, there are also costs to investing. Neil Indochester has emailed to say fees, costs and charges eat up too much of the money invested. His recommendation is we should all stick to cash, is with any spare cash. David, just explain what kind of fees there can be and what you'd say to Neil. I would say to Neil that he perhaps needs to do a little bit more research in terms of what the real cost of investing is. The fact of the matter is that there are certain platforms available that will deal directly with consumers, directly with our savers and investors. And the cost of investment are extremely low. It may cost absolutely nothing to actually invest your money. But then on an ongoing basis, yes, you will be subject to an annual management charge. And if you're invested in, as Karen mentioned, let's say, a world index tracker, as Karen mentioned, the cost on that could be as low as 0.25% per annum, which when compared to the overall potential returns, which as we said, not guaranteed. That is relatively low cost and worth the cost, I think. And it has to be born in mind that we are not looking at a financial advisor with not say, invest all your money. You have to keep a big lump of cash back to give yourself security. This is the end of the video. If you are going to study this, you will be able to get a lot of money. You will be able to get a lot of money in the future. Hey, listen to me. How do you manage to get money? The value is the money you get from your investment and the money you get from your investment. It is a money, a money-based company that has been working for a long time, and has been able to get money from your investment. The value is the money, the money you get from your investment. Good luck. Okay, lots of emails coming in, we're going to rattle through as many as we can. Jan from Devon has called us. At 77, watching my pension win till every year, where should I relocate about 30,000 please? Easy access, but simply to get better value. I have a nicer, thank you. Thank you, Jan. David, I know you know we don't give share tips on this programme, so keep it nice in general if you can. But are there any options where Jan could get her money in a hurry if she needed it or is a cash-izer the answer for her? I think that if she's looking at the short term, it has to be cash. It probably also needs to be a cash iser, although she said she did already have an iser, but she should be looking at a situation where perhaps put someone easy access where you can get some good rates at the moment. And also, one year fix, I think you can get up to 4.7% at the moment, so that makes sense. So divide it, manage it and think about it and do a bit of research online or even in the newspaper. Well, I hope that helped. So I'm sure it did. We've also had an email from John David. He asks, at the age of 79, what do financial advisers consider to be a long-term investment? Okay, 79, I think the life expectancy of someone who's 79 is about eight or nine years on average. I would say, if you're going to invest in stocks and shares, you need to do so for at least five to seven years. And I'd say, give it a go if you've got some spare cash or just spend it and enjoy yourself. I mean, that's always good advice, isn't it? I would care a lot of people do have investments, even if they don't necessarily think about them, because of course their pension will be invested. Do you think more people understood investing? They might be able to engage more with their pension pots as well. Absolutely. And I think a lot of people who say, oh no, I'm not an investor or investing is not for me. Actually are, because with auto enrollment in place, you're likely to have if you're working an pension from your employer, that is actually an investment. Final salary pensions are a thing of the past largely with a few exceptions. So people have these investments. And actually knowing you have it, does two things. One, it's useful to engage in it, so you know where you have it. It might give you some comfort. You can go back and look how it's done. You know, you can see what's happened to it. You can see you are, you know, you're getting your own real-life example. But also it's a really interesting and it is a potential option if you do have a bit of extra money and you want to invest, but you don't know where to start. Something like just adding some extra money to your pension is a way you can do that and that's tax-efficient. So there's lots of different ways to invest and pensions are definitely one of them. Okay, we have, we've touched on some jargon, I think, so far. So let's bust some now. Let's talk about the main types of investing, Karen. Once you've got your emergency cash, you've got some ready cash and you decide, right, that's it. I'm going to start investing with the rest. You then need to understand the difference between what's called active and passive investing. So I managed fund versus tracking the market. Just explain that. Yeah, so I mean, there were actually many more, but if you're talking about a fund or you know, manage, that's someone, making individual decisions about where that money goes, what companies that's invested in, what infrastructure, etc. A tracker basically takes a stock market usually. So you take, you know, the London Stock Exchange, the FTSE 100, the top 100 companies, the largest 100 companies, and it buys a proportionate share of, or the fund owned a part of all of those companies. And there's no, you know, it just follows as the size of those companies grow on the stock market. So does the size of the fund. So it tracks the rise and fall of the companies on an exchange. And it is, as David mentioned, a low-cost way of investing. And you know, that might be right for some people. An active one will be someone making a decision through, and it could be, you know, I think we had a listener asked about sustainable funds or a sustainable investment. It could be someone making a decision about which of those. I mean, there's lots of different trackers, but it comes to, you know, is someone making individual decisions versus are they following a set formula to track something? But David, if you do want to start investing, how easy is it for someone to potentially do it themselves? They need to go through a platform, don't they? Well, yeah, there are investment platforms that market directly to consumers. I won't name any of them. But the fact of the matter is that opportunity to invest is there. And I have to say, if you're a first-time investor, I think that I would go for what we call a passive investment that Karen was just explaining, because it's a very, let's say, low-cost way to get market exposure, i.e. to stocks and shares. And it also gets you used to that concept of, let's say, volatility of investment and discipline you and get you the experience of how holding on to that investment for a long time is the best way of doing things. So potentially a way to dip your toe in. I would take a show, yeah. But there can also be with an increased awareness of investment, an increase in risk, can't that, because Chris has emailed. And I'm afraid he was conned by an investment scam disguised as an advert. His words are being read by one of our team. I fell for one of these. The ad was actually on a website linked to a page that looks like a national newspaper, even having the name of a real person who works for the newspaper as financial correspondence. Okay, I lost 250 pounds, but what is worrying is that I've since had emails and calls from organisations telling me they can recover the money. Almost a scam on a scam if you like. I have screenshots, et cetera, and I've contacted the website who haven't replied, and the newspaper who have, and are investigating. Thank you, Chris. And I'm sorry to hear what you've been through. Karen, this is a real risk. Isn't it? We hear so many devastating stories of investment fraud at MoneyBox. We know that it's a very fast growing area. If more people are told that investing is a good option, more people could be vulnerable. How should they stay safe? What should they look out for? Yeah, I think, you know, as a first part of Call, I really recommend taking a look at what the financial conductors authority is saying on some of the work that they have done and some of the sort of warning signs to look out for, for example, is the company that's trying to advise you and get convinced you to invest, you know, a legitimate company. Is it registered by the regulator? So anyone providing financial advice or financial products has to be regulated by the FCA. So there's some really great information there that people should be aware of. And then I think there's a few sort of comments across lots of financial services things to keep in mind. If it sounds too good to be true, is the classic one? It probably is. If there's a huge amount of time pressure put on you to do things. So I think, you know, yes, it's good to be cautious and really to take take a look and, you know, as I said, the FCA is probably a great first thoughts. Okay, so many signs themselves off as cynical of phantom says it's going to be a field day for scammers. David, there's actually a huge amount about investments on social media, often from some really charismatic people. And I've seen some of those people peddling risky investment opportunities. Sometimes alongside protein powder, there are risks there as well, aren't there? Even if they're not outright scams? Of course there are. And I think that you've got to apply a bit of a sniff test, as Karen said, to anything that seems a bit too good to be true, take a step back and think, is that really going to be possible? The chap who is talking about, I think, 30% or 20% returns per annum. Yeah, if someone's offering you that, then step back and think about that, is it really possible? Karen, really briefly, if you can, is there a real risk that younger investors are going to be more attracted by attractive people on TikTok than by savvy the squirrel? Yeah, I know we younger generations are definitely getting their information in a different way, but there's some really good stuff on those websites as well, it's a really effective way of getting messaging out. Savvy is on TikTok. And again, you're selling protein powder. No, it's selling protein powder, but it's also not set to tell you a particular thing to invest in. But I think that sniff test is key for everyone. Okay, useful to know. It might be the only minority of us invest, but so many of you have sent emails and messages. Clearly people do want to understand more. Let's leave them with a final tip. With seconds to go, what is the one thing a new the investor should know, Karen? I would say start small and little enough, then it's the way to go. So it's about the long term and you don't need lots of money to get started. David, your final thought? I would say think about the level of cash you need to keep in order to allow you to sleep at night. And if you're going beyond that, probably don't do it. Well, that is all we've got time for in today's podcast. Thank you to everybody who took part. And thank you, of course, to today's experts. We've been hearing from Karen Norley from the Investment Association and David Dodgson from the private office. So that was investing the good, the bad and the ugly. And speaking of the good, don't miss Paul Lewis with Money Box at midday on Saturday or the podcast afterwards on BBC Sounds. He'll be talking even more about the potential dangers of taking financial tips from social media. Now, the Money Box live podcast takes a break now. We'll be back for a new series in just four weeks. But if there's a story that you want the team here to take a look at, then you can still get in touch with us. You can email MoneyBox at bbc.co.uk or send us a message on WhatsApp. The number is 03 06 7 8 3 1 8 3. In this podcast, the producer was Craig Henderson, the studio manager, Elliott Purlich, production coordinator, Catherine Lund. Our editor is Jess Quail. I'm Felicity Hanna and this was a BBC News Money and Work production for BBC Sounds. If you've got a scrolling problem, then this is the podcast for you. It's called Top Comment with Me, Matt Shay. And Me, Marianna Spring, we both investigate social media for a living. Whether it's disinformation, conspiracy theories, internet culture, memes. We're going to be getting behind the stuff that is popping up on your feed on this podcast. That's Top Comment on BBC Sounds. Olen Shannon Maldonado, käsintehtyjä artesaanitua teitä myyvän jauji-lahjakaupan perusta. Valit sinu shopifainkoska alustoja testatessani totesin sen ehdottomasti yhdeksi helpokäyttöisimmistä alustoista. Minulla oli tärkeää pohtia kehittymistä me tulevaisuudessa. Kaikki myyntiin tarvittavat työkaluut, kuten varaston suunnittelu ovat kätivästi dashboardissä. Aloita ilmainen kokeilu shopifaippiste komsi vustolla. Pierustin pyöräilyvää teitä valmistavan ornotin vuonna 2013. Mielestäni parasta shopifais saan se, että voimme harjoittaa liiketoimintaa ilman teknistä osaamista. Voimme hallinnoida yrityksen taustajaristeelle mien ja front-endia sekä myydä verkossa, vaivatta. Jos shopifai olisi pyöräilyvaruste, sollisimielestäni itse polkupyörä. Sillä asiat hoidetaan ja meidän liiketoiminta me hoituu shopifaisissa. [Muuttu]