Just before I started my first job back in summer 1983 my mum and dad used to give me £1 a week pocket money now whilst this was always the old £1 notes the current £1 coin came into circulation during that year.
The current coin will be replaced by a 12 sided one on the 28th of this month – partly due to the high level of counterfeiting that’s being going on – ever had problems getting a car park meter to accept one of your £1 coins – chances are that it’s due to it being fake.
Let’s have a look at some interesting figures if you’d have invested £1 in various places back in 1983, what would they be worth today adjusted for inflation.
£1 into your piggy bank back in 1983 would, with the effects of inflation buy you the equivalent of just 32p today – quite startling during the relatively low inflation of the last few years.
£1 invested in gold would now have a value of £1.05.
£1 invested in a cash savings account would now have a value of £1.33.
£1 invested in property would have a value of £2.42
£1 invested in government bonds would have a value of £4.93.
And here’s the big one:
£1 invested to track the rise of the FTSE would now have a value of £11.66!!!! Albeit with the income reinvested – but what a huge difference! Now don’t get me wrong I’m not suggesting that we all rush out and stick money into shares – we all need a balanced portfolio to balance out the rise and fall of the various types of investment.
So what’s my point – make your money work as hard as possible – and if you can, consider tax efficient wrappers to protect or mitigate any tax hit – pension or ISA’s can make a huge difference in the long term – even more so when you consider the tax free environment that these enjoy.
Don’t hesitate to give us a call if you’d like to chat about any of the above over a cuppa.
Rob ‘piggy bank’ Greaves