Tony Byrne’s View 13 November 2017

Nov 13, 2017 | Wealth & Tax Blog

How to manage your time to increase your wealth

What is your most valuable resource? The one thing that will reduce minute by minute, hour by hour, day by day, week by week ad infinitum. Why it’s your time of course!

Time is the one thing you cannot replace. It is a limited resource. So the question is are you using your time wisely?

I cannot cover every possible use of your time in one article but what I can do is cover how smart use of your time can make you money!

The classic thing to do is only spend time on money making or money saving activities that justify the time spent. So if you are wasting valuable time finding ways to use coupons to save you a few pence or a few pounds forget it! It’s really not worth spending an hour to save £1 is it?

I’ve even known motorists who drive 10 miles each way to save a few pence a litre on their fuel which pretty much equates to the running cost per litre of driving to that garage to fill up meaning there is effectively no net cost saving! In addition to this they have wasted half an hour of their lives driving too! Madness or what?

If, on the other hand, you are contemplating a large purchase such as a house it is well worthwhile spending an hour or more negotiating a lower purchase price which could potentially save you £10K or more! It would take you a lifetime to save that much money in discount shopping vouchers! That’s smart time management.

The world’s most famous investor, Warren Buffet, one of the wealthiest men on the planet will only give you 20 minutes of his time for a meeting because, in his mid-eighties, he realises that his time on earth is now very limited. A very wise man indeed. No wonder he is so wealthy.

Likewise if you do not have the time, inclination or skill to manage your investments or your pensions why not save time by delegating that task to a financial planner or a wealth manager who is far more likely to get better returns for you than from leaving your money stagnating in a bank or Building Society account or in National Savings, especially Premium Bonds!

Research by Vanguard shows that the value of a financial planner is about 3% a year. Bearing in mind most financial planners charge 1% a year of the value of the money they manage it appears to me to be a no brainer to appoint one to act for you. Then again I am a bit biased!

Various studies have shown that most amateur DIY investors achieve very poor investment returns of c.4% a year less than the market return. Assuming a long term average return of 6.7% a year for shares that means such investors are only making 2.7% a year. Even though that does beat the average return of barely 1% a year from bank accounts it is still a poor return.

By contrast our Wealth Investment Strategy has achieved a 9.8% p.a. average return over the last 21 years. In spite of that we still come across clients with significant amounts of money in banks, Building Societies and National Savings earning a paltry 1% a year.

Whilst it makes sense to have some rainy day money set aside we do come across cases where this “safe money” runs into 6 figures and even 7 figures on occasion! These very same clients are enjoying far greater returns using our investment strategy with the rest of their money yet they still persist in investing large sums in accounts paying very low interest rates!

So if you really want to make your money sweat and save yourself time in the process why not invest it with Wealth And Tax Management? Contact us to arrange an appointment and we will be delighted to help you. You know it makes sense.

 

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