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Post by Harland Kearney on Aug 7, 2019 11:08:49 GMT
I can agree with above, education for teenagers and young adults is non-existant in the average public schools. Even if it were present, I truely believe most would ignore the education from my expirence in school. People have to learn for themselves, or be forced to by a big slap in the face wake up. Most people get the wake up to late after working all there life and not saving, as well as investing the savings correctly (if at all).
I began running my own Business when I was 16, so by 18 (im 21 now) had a fair amount of money being eaten by inflation. I put it all into a Barclays cash ISA(16 age+), and £15 per month return of 15k. Yeh that drove me to look elsewhere in 2016. Peer to Peer was in its honeymoon phase at this time for investors. High returns with no real large defaults coming to light yet (inside Lendy this is exceptionally true)
P2P made me quite a bit of extra cash, and I learnt very quickly what not to do. Really my main "hands on" was trading short term with Lendy bridging loans. In 2016-2017 this was a entirely possible adventure as the SM was extremely liquid. At the time I was too inexpiernced to understand the MAJOR risk I was taking by playing this game, but I didn't lose any money in the lendy default. (Minus £80 from a 3 year old loan, which is still to be resolved.)
My main asset type is now Stocks (Via income & Acculamtion funds). As well as ofc a small mount of money in Bonds & Premium Bonds.
Peer to Peer I only hold money in Assetz Capital actively, the black box accounts there have proven to be reliable and realistic points of return. But I'm keeping a close eye on it, who wouldn't now days.
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Post by propman on Aug 7, 2019 17:22:19 GMT
Personally I am not convinced investing is relevant to the majority of the population. The only investments relevant to most would be pensions and I am not convinced that SIPPS make sense for those without substantial funds with robotically allocated passive funds being sufficient and efficient for most.
Unfortunately most funds in UK have very high fees especially for smaller investors when considered in the recent low inflation / low income world we have been in. I have significant sympathy for IFAs as I believe they have been held liable for the faults of investors (as well as some real failings). The consequence is over regulation and huge costs before they can add value. I believe significant informed caveat emptor and common sense explanations should allow advice based on only a small amount of documented investigation of the client and enable them to operate at much lower fees. Similarly I would have thought large investment houses should be able to operate with much lower overheads to provide a more cost effective service.
Few have funds they would not be shocked to lose and so few should be investing. This is compunded when many have only small amounts and so cannot properly diversify. tghis is especially so given almost universal reduced job security. This is especially true if everyone only considered investing funds once they had > than the 6 months of net salary recommended liquid funds. If education stressed these facts, then only a minority would benefit from education about investment.
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Post by Harland Kearney on Aug 7, 2019 20:02:44 GMT
Such a wide topic, I was not trying to make any sweeping statements, but only from my own expierence. As somebody who started from 0 with no family support for my business startup, the journey of learning financial has been entirely independant and I've managed to see the diffrence it has made for my quaility of life. (and certainly future quaility) I really believe that if people save money over a certain amount, learning to keep hold of that monies spending power, investment is (as of now) the only way to reserve its value.
If I am right, everybody now has a workplace pension by law here in the UK, being self employed I'm not too aware of the situation. But such a thing will certainly help people for the future, as well as help boost the investment economy.
But yes, the average joe setting up a stock account and buy some forgin currency microsoft shares is certainly a receipe for disaster. My point was that near zero education on all things money. Including Risk, Tax, savings & investments collectively not just investments standing alone. You're right though, it would be a waste of money to educate because I truely believe very few people would pay attention to such topics at high school age, let alone be in a postion to truely benefit from it.
Once individals acculmate wealth (independantly, not from hands downs from family) then generally knoledge is attained or learnt the hardway. Least again, thats how my journey has been.
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Post by Deleted on Aug 8, 2019 7:40:01 GMT
Ah, what schools taught me
1) basic mathematics including statistics and risk 2) experimentation and observational processes, the "scientific approach" 3) if a deal looked too good to be believed it was 4) graphical representation and the use of percentages
5) business studies 6) basic economics 7) the dangers of "group think"
were you asleep at the back of the class?
Though to be fair I also got a terrible bit of education once at Loughborough University where I was sent for a week to stretch out a Junior MBA course with a few brighter minds. One of the lecturers tried to explain how the stock market worked and what drove it. Given that he was a failed pro-trader from before the big-bang it was a little silly, to say the least, but at least he tried.
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Post by propman on Aug 8, 2019 9:28:42 GMT
Ah, what schools taught me
1) basic mathematics including statistics and risk 2) experimentation and observational processes, the "scientific approach" 3) if a deal looked too good to be believed it was 4) graphical representation and the use of percentages
5) business studies 6) basic economics 7) the dangers of "group think"
were you asleep at the back of the class?
Though to be fair I also got a terrible bit of education once at Loughborough University where I was sent for a week to stretch out a Junior MBA course with a few brighter minds. One of the lecturers tried to explain how the stock market worked and what drove it. Given that he was a failed pro-trader from before the big-bang it was a little silly, to say the least, but at least he tried.
from helping 2nd quartile GCSE students I am yet to find one who understands the meaning of any statistics beyond averages (and there they don't really understand the nuances of mode-median-mean). the teaching is geared towards the processes of the calculations rather than the meaning of what the statistics tell them. To truly get to grips with fat tails and the impact of skewed distributions on possible scenarios requires a whole different approach. Similarly even degree level economics rarely explores the true importance of correleted markets to portfolio behaviour and the understanding that normal distributions are not universal!
Without these basic understandings creating a diversified investment portfolio that meets their requirements and understand the risk (and uncertainty, a concept that is too difficult for most econometric modelling and therefore conveniently ignored by most since Keynes) is not something that they can aspire to based on the education given. I only realised the long term impact of significant losses on long term performance after many years in business.
unfortunately lessons learned are from one set of economic parameters. We all see "past returns is no guide to future performance" and ignore it for want of any alternative approach...
pensions are more universal, but employees still have the right to opt out. However these will only go up to 8% of salary per year. For someone who's real salary grows 3% for 15 years, flat for 15 years then declines 2% for 10 years, even returning 2% real return throughout this would give a pension pot of only a little over 5 times salary. An index linked annuity yields less than 2%. Even if you assume you can draw 4% pa this would only give just over 20% of final salary (which incidentally is 20% below when it peaked). So not a huge amount.
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Post by Deleted on Aug 8, 2019 13:27:30 GMT
So they were asleep. To be honest I never really cared about mode-median-mean as, in most cases, you just use the one that is most relevant, but in my day standard deviation was calculated along with chi-squared at o level and student-t at A level. I understand that study-inflation never happens. :-)
Still to be fair when I read Engineering the whole class had to re-do mathematics from O level to A level because some of the British Maths teaching had been so bad, which gave me at least one lazy lecture a week.
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Post by bracknellboy on Aug 8, 2019 14:18:50 GMT
Well I was lucky enough that at O-Level I did not just Maths (SMP), but also Statistics as an O-Level in its own right. Probably not that common in the Comprehensive system, but thumbs up for the school management, esp. as it was a ex Sec Mod turned Comp not a former Grammar. Interestingly, when I went to the ex Grammar for Sixth Form, including double maths (Trad), they weren't convinced about that funny new SMP stuff I'd done, so I had to do an intermediate AS (or was it AO) trad maths exam. Which after some studying I flew through. So another thumbs up the education I got at the ex Comp.
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aju
Member of DD Central
Posts: 3,500 
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Post by aju on Aug 8, 2019 14:50:36 GMT
<snipped>
pensions are more universal, but employees still have the right to opt out. However these will only go up to 8% of salary per year. For someone who's real salary grows 3% for 15 years, flat for 15 years then declines 2% for 10 years, even returning 2% real return throughout this would give a pension pot of only a little over 5 times salary. An index linked annuity yields less than 2%. Even if you assume you can draw 4% pa this would only give just over 20% of final salary (which incidentally is 20% below when it peaked). So not a huge amount.
I worked for a large comms company that had a little bird as its mascot a good while back now and I remember our final salary pensions were regularly commuted by not getting pay rises but rather bonuses. These said bonuses were quite handsome in a few cases but to be honest most of us would have prefered the pay rise to ensure an increase in the pension when the time came to draw the pension. That said they are still way better than any other forms of pension and I fail to see why people are still hellbent on conversions etc.
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Post by propman on Aug 8, 2019 16:45:52 GMT
Bracknellboy,
I am not saying people don't get a ghood maths education, just that it is not geared to practical applications. These days I think they are also more focussed on passing the exams than giving a rounded education (you get what you measure?).
AJU,
most people don't understand the impact of inflation or fees. When you are offerred 20X final salary pension, 25% tax free, it sounds like a no brainer to most people. If they had assumed 20% tax, a pension of £10k pa would be £8k after tax. Instead they get £200k. Even if they remember the tax on drawing the 75%, that is £170k so are only worse off after >21 years. Add that they have a company saying what they can grow the £200k to and people get excited. Unfortunately they have forgotten that the pension is index linked. A healthy 65 year old would get around £4k pa as an annuiity for £200k so the deal isn't actually so great.
In addition, many people want the money earlier. Most defined benefiot Schemes will only pay out from 65 when transfer to a Money Purchase and you can withdraw to your timetable from 55. If you are struggling that is a big plus. Yes you might be much better off from 65, but whether that is woth the 10 years of comparative hardship beforehand is a personal judgement. Psychologists have shown most under value delayed gratification...
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Post by Harland Kearney on Aug 8, 2019 17:36:26 GMT
Not all schools are equal in there giving of education. It is naive to think because you were taught those things, teachers we had bothered. We learnt basic Mathematics yes, but nothing on the economy, tax, rights etc. You taught that things can be too good to be true by basic human nature, I think most people understand that. If you don't you will once your fleased. My high school education was done in pretty much bog-standard high school, with many teaches putting in a 5/10 effort, just wanting the day to end. Nothing beyond what the exam paper would ask you. Which is never about tax. My education was Foundation Maths (Bottom set), ironic yes. But I believe I could easily have done beyond that, but I had no teachers willing to put the one on one effort. Which is fair enough, there were 30 other students, most of whom are misbehaving at the bottom set. I had a learning diffculty which was not addressed until very late in my education, hence the low set. Never a lack of effort, I am always driven; I love to be independant and run my own business. I love to learn. I've never had a lesson in stats or anything on that nature. I understand now (to a I guess a entry, but needed for informed investments, im not formally educated in it) from my own learning, which is great, but I've understood how that knowledge is power in today's world. I am talking for purely high school education to the age of 16, not anything afterwards. If you took economics afterwards in today A-Level, well ofc. Everybody is talking from their experience, which is great because I am too. But that some of us have such diffrent tales to tell is enough on its own. Anyway, yes really information about these sites and the understanding of the risks they carry is the only way to mitigrate uninformed investors from getting into precarious postions. However I'm sure such instances happen on the stock market (taking postions without fully understand the risks and fees) and you cannot goto the obusman in that case. The last regulatory update since Lendy seemed to put FCA on the stepping stones to makes regulation to protect themselves, as well as "investors" or from investors!!!  Love to read everyone feedback on here, I usally scoru the Citywire Fourum too about stock investments, but convos here seem much more personal. |
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Post by dan1 on Aug 8, 2019 18:07:39 GMT
<snipped>
pensions are more universal, but employees still have the right to opt out. However these will only go up to 8% of salary per year. For someone who's real salary grows 3% for 15 years, flat for 15 years then declines 2% for 10 years, even returning 2% real return throughout this would give a pension pot of only a little over 5 times salary. An index linked annuity yields less than 2%. Even if you assume you can draw 4% pa this would only give just over 20% of final salary (which incidentally is 20% below when it peaked). So not a huge amount.
I worked for a large comms company that had a little bird as its mascot a good while back now and I remember our final salary pensions were regularly commuted by not getting pay rises but rather bonuses. These said bonuses were quite handsome in a few cases but to be honest most of us would have prefered the pay rise to ensure an increase in the pension when the time came to draw the pension. That said they are still way better than any other forms of pension and I fail to see why people are still hellbent on conversions etc. Buzby? If so, you should check out SLIS (Somerset, formerly Suffolk!... I assume he worked at BT Research)... simplelivingsomerset.wordpress.com/He affectionately refers to his former employer as The Firm 
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Post by martin44 on Aug 8, 2019 21:42:37 GMT
After a long period of diverse and occasionally risky, self investing.. p2p is going to be ( I pretty confidently estimate) my worst investment strategy of the lot... anyone of the same ilk? Edit.... and that includes crypto's.. - I empathise with your situation having myself had a number of negative experiences with P2P: Rebuilding Society (bad debt/defaults), Collateral (in administration), Lendy (in administration), Funding Circle (bad debt/defaults), Funding Secure (bad debt/defaults), MoneyThing (bad debt/defaults) ... the list goes on. I think it's safe to say the list of inherent risks is far greater than I was able to ascertain before investing my hard-earned cash. I'm happy to hold my hand up when I've made bad investment decisions but I do question whether the incoming regulation will do anything to thwart the devious platforms/borrowers who see P2P as a 'get-rich-quick' opportunity.
Couldnt agree more.. when a platform offers a lender opportunity based on "their" valuers interpretation... i expect it to be a professional interpretation ... not a fag packet job.. which it appears most valuations are based.
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Post by martin44 on Aug 8, 2019 21:52:20 GMT
Not all schools are equal in there giving of education. It is naive to think because you were taught those things, teachers we had bothered. We learnt basic Mathematics yes, but nothing on the economy, tax, rights etc. You taught that things can be too good to be true by basic human nature, I think most people understand that. If you don't you will once your fleased. My high school education was done in pretty much bog-standard high school, with many teaches putting in a 5/10 effort, just wanting the day to end. Nothing beyond what the exam paper would ask you. Which is never about tax. My education was Foundation Maths (Bottom set), ironic yes. But I believe I could easily have done beyond that, but I had no teachers willing to put the one on one effort. Which is fair enough, there were 30 other students, most of whom are misbehaving at the bottom set. I had a learning diffculty which was not addressed until very late in my education, hence the low set. Never a lack of effort, I am always driven; I love to be independant and run my own business. I love to learn. I've never had a lesson in stats or anything on that nature. I understand now (to a I guess a entry, but needed for informed investments, im not formally educated in it) from my own learning, which is great, but I've understood how that knowledge is power in today's world. I am talking for purely high school education to the age of 16, not anything afterwards. If you took economics afterwards in today A-Level, well ofc. Everybody is talking from their experience, which is great because I am too. But that some of us have such diffrent tales to tell is enough on its own. Anyway, yes really information about these sites and the understanding of the risks they carry is the only way to mitigrate uninformed investors from getting into precarious postions. However I'm sure such instances happen on the stock market (taking postions without fully understand the risks and fees) and you cannot goto the obusman in that case. The last regulatory update since Lendy seemed to put FCA on the stepping stones to makes regulation to protect themselves, as well as "investors" or from investors!!! Love to read everyone feedback on here, I usally scoru the Citywire Fourum too about stock investments, but convos here seem much more personal. I remember a few moons ago when you first arrived on the forum as a newbie.... its certainly good to here your views now as a "semi" pro investor  time is a learner... and you and we will always be learning from our mistakes. 
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aju
Member of DD Central
Posts: 3,500
Likes: 924
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Post by aju on Aug 8, 2019 22:38:54 GMT
I worked for a large comms company that had a little bird as its mascot a good while back now and I remember our final salary pensions were regularly commuted by not getting pay rises but rather bonuses. These said bonuses were quite handsome in a few cases but to be honest most of us would have prefered the pay rise to ensure an increase in the pension when the time came to draw the pension. That said they are still way better than any other forms of pension and I fail to see why people are still hellbent on conversions etc. Buzby? If so, you should check out SLIS (Somerset, formerly Suffolk!... I assume he worked at BT Research)... simplelivingsomerset.wordpress.com/He affectionately refers to his former employer as The Firm Yes it was buzby but sadly I worked in HQ London for a long while when the bonus milarky was going on. I used to also work in MH but I lived about 60 miles west of there in a famous seat of learning and eventually worked with those bright young chaps and chapesses from the Indian continent mostly using fledgling internet phones and satelite tv links etc. I'm not sure I ever heard of my former employer being called "The Firm" but who knows with those boffin people over on the heath I guess anything is/was possible.
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Post by dan1 on Aug 8, 2019 22:50:53 GMT
Buzby? If so, you should check out SLIS (Somerset, formerly Suffolk!... I assume he worked at BT Research)... simplelivingsomerset.wordpress.com/He affectionately refers to his former employer as The Firm Yes it was buzby but sadly I worked in HQ London for a long while when the bonus milarky was going on. I used to also work in MH but I lived about 60 miles west of there in a famous seat of learning and eventually worked with those bright young chaps and chapesses from the Indian continent mostly using fledgling internet phones and satelite tv links etc. I'm not sure I ever heard of my former employer being called "The Firm" but who knows with those boffin people over on the heath I guess anything is/was possible. I assume he just refers to them as The Firm to avoid explicitly naming them. A Google tells me MH = Martlesham Heath. Just to be clear, I've never worked for BT. I just thought SLIS's use of the pension scheme (perhaps the same one you're in) may be of interest because iirc he goes into details such as actuarial reduction and the like. His writing style appeals to my dry sense of humour although the depth and honesty of the US blog livingafi.com makes it my personal favourite (understandably no longer updated).
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