It Depends...
The murky world of real life financial decisions
The internet and, more worryingly, our legacy media are awash with ‘financial advice’.
We have masses of unqualified/misinformed people spouting about what other people should do with their money.
Whilst some of this ‘advice’ may be sensible, it is often portrayed in absolute terms.
As we know, the world isn’t black and white. It’s varying shades of grey.
“There are no solutions, only trade-offs”
Thomas Sowell
In our quest for certainty in an uncertain world, we often search for neat solutions and definitive answers, but the real answer is usually, ‘it depends’:
How should I split my investment between equities and bonds? It depends…
Should I prioritise my pension or my Stocks & Shares ISA? It depends…
Should I invest in a lump sum or drip feed over time? It depends…
How many months expenses should I keep in cash? It depends…
Should I gift to my children now or in the future? It depends…
Should I overpay my home mortgage or invest? It depends…
What should I do with my inheritance? It depends…
Should I buy a buy-to-let property? It depends…
Should I buy crypto? Probably not…
For some of these questions, there is a ‘correct’ spreadsheet answer; however, life doesn’t happen on a spreadsheet.
Spreadsheets are devoid of emotion and nuance. They do not account for intangible things, such as your peace of mind or your wider circumstances.
Ultimately, it depends… on you.
It depends on your values.
It depends on your relationships.
It depends on your health and longevity.
It depends on your circumstances, needs and wants.
It depends on your tolerance, understanding and capacity for risk.
It. Depends. On. You.
Any content on the internet (including by me), and most well-meaning advice from friends/family, does not account for your unique set of life experiences, which make you who you are.
Acting on generic, surface level advice is risky business. There may be a ‘correct’ answer to your question, but it may not be your answer.
Yes, it probably is a good idea for you to invest, but how you go about it requires intimate knowledge of your circumstances, your wants and, most importantly, your needs.
A random journalist, Reddit contributor, or teenager on Tik-Tok knows nothing about you. Any ‘advice’ they give is likely a reflection of their life experiences, not yours.
If you are going to take advice, make sure you seek out a regulated professional.
Financial Planners shouldn’t provide any advice without first gaining a deep understanding of you, your needs, wants and circumstances.
The result of which will be highly personalised advice.
It’ll be your answer, not the answer.
Thanks for reading,
Tom Redmayne
Cambridge-Based Financial Planner
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments.
This is not personal advice based on your circumstances.
All views are my own.