How do you choose a top draw investment? In many instances it will be similar to buying a kitchen knife, and the varied results are almost certainly similar. Why?
I am going to start with a question that you need to answer first. How many kitchen knives have you got right now in your draw at home? Now, take a moment and consider, how many of those knives are actually used?
Most people have a favourite, meaning many lie in the draw unused, un-serviced and not recently considered. However, amazingly, despite all those unused knives, it is not uncommon to find people looking for a new “better” version rather than seeking someone to help sharpen what they already have.
Indeed I could be talking about phones, laptops, TV’s, latest tech as well as knives. Have a think about it for a moment….. how do you choose new ones, and why discard what you already have?
Reality check – top draw investments and knives comparison
Most new products are sealed, so when choosing new packaging plays a key part, as well as maybe a name or reputation or recommendation. Do you actually get a knife out of the packaging and try it on some meat, vegetables or anything else in the shop? I bet not!
The reality is that the knife you have already at home can probably do the job, but just needs sharpening occasionally at a relatively low cost.
Surely, the objective you actually are targeting is not the knife, new or otherwise, but the ability to cut food!?
Let me be clear – top draw investments or pensions are almost identical to the knives conundrum, you buy new unnecessarily, you fail to sharpen or review, you have favourites and often the objective is something else.
Top Draw Investments – the starting point
With an investment, pretty much the only thing you can go on is the packaging, name, reputation and past performance. In reality all you really want is an objective or requirement, for example, produce an income, plan towards retirement.
What is the packaging of an investment? Often it is a glossy brochure and a suave investment adviser dressed in a suit. Somehow, this transfers in people’s minds to a suave competent investment. Any quoted “big” name provides re-assurance. Reputation and past performance are often unsubstantiated brochures with words like “guaranteed” used. Look at knives and see the “guaranteed for 10 years” statements – who really believes it but despite this, it sub-consciously provides substance to the idea that this is the real thing!
Nope, like a knife, the starting point for a pension or an investment is the objective you need, and then a sharpening of the existing pension or investment. Getting someone to sharpen your existing investments through a review and re-appraisal, like sharpening a knife, is much more cost effective then going down the local shop and buying a gloriously packaged, but untried, new pension or investment that may be worse than the one you already have!
We offer a forensic review of the 10 reasons to use a QROPS for those that would like revisit the QROPS and investments they hold. Increased investment performance and lower charges may make a significant difference at retirement.
Some offshore salesmen promoting QROPS as an investment solution live in a parallel universe where they claim to make world stock markets behave differently in QROPS than they do if the same funds are used from and within UK pension funds. Think and behave logically, if promises of bigger returns can only be achieved by moving to a QROPS then why hasn’t the entire UK pension industry moved offshore? It hasn’t!
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published on 8th February 2017
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