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Community ideas

Building and preserving wealth

I started this website earlier in the year and I haven’t been tempted to plaster it with advertising or go out of my way to find affiliates. My only affiliate link I use sometimes is to Zopa because I think peer to peer lending is the future.

Most of us can build wealth by improving something that we own. It might be doing repairs on your house or maintaining your garden to preserve wealth. Even maintaining your car and keeping it clean and polished is preserving something of value and so preserving wealth.

At this time of year we are encouraged to spend our money on food, drinks and presents and that is a drain on our resources. We could save that money and add to our wealth, but life is for living. We have to enjoy special occasions and Christmas is a special occasion. I’ll be shopping later and buying a few presents, but I’ll still be quite thrifty. I certainly won’t be in debt in January.

A few years ago people thought this recession would be far worse and were preparing for the worst; hyper-inflation and money becoming worth a lot less. They started buying gold and in some places it was even sold from vending machines. There were people who said you can’t eat gold and it’s not good for very much. The price still went up. I wasn’t able to able to fill a vault full of gold bars,  but adding a few gold coins to my coin collection seemed a sensible thing to do.

As the recession started to bite, interest rates went to ridiculous lows and the stock market dropped like the proverbial brick. I look at Zopa to get a better interest rate and although it’s riskier; it has given me an interest rate above inflation.

Then I looked at shares. My first investments weren’t so good, but you pay to learn. The shares I’ve bought in the past year have made up for earlier mistakes. I bought Lloyd’s Banking group and that’s up 64%, Premier Foods is up 192% and this year I bought Royal Bank of Scotland which took a while to go up, but is up by a respectable 12% now. Banks are supposed to take our deposits and invest on the stock markets and pay us interest. They haven’t been doing so well have they? The system appears to be broken.

I think many people will spend too much money over Christmas and be in trouble in January. More than a million people a year turn to payday loans in the UK. It’s hardly surprising with little control on the privatised industries that claim they have to increase prices to ‘invest’. Can’t they get that investment from their shareholders?

The country needs people to build wealth and invest, but the government could do a lot more to encourage small investors. It is better to pander to a million small investors than one millionaire. A million votes is better than one.

Please comment is you have something to say. Will you be skint after Christmas? Do you have a tip or observation for preserving wealth? Please share your ideas.

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