investment

not a money script: investing

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Various members of my family have taught me lots of things about finance, mostly spontaneously or by osmosis, which I have since internalised as a set of scripts about money that I follow by default. Nearly all the money scripts that I have are useful and work well (although it never hurts to revisit their logic).

One of the things that my family didn’t teach me about was investing. I am under the impression, rightly or wrongly, that they just don’t know that much about it. To be fair, when my parents started work they had final salary pension schemes, and I’m sure they would have assumed that I would get one too. Also, if asked, I’m pretty certain that they would say that saving for retirement is a good thing. But that only goes so far, especially when you are confronted with a list of investment funds for your money purchase pension from which you have to choose when you start your first job.

If I ever have the opportunity to influence young minds (heaven forbid) on the subject of finance, then I’ll be sure to plug investments. I’d tell them about index funds (I understand them) and also explain about tax advantages and the power of compound returns, and opportunity risks, and the problems with inflation. I’ll try to give them an advantage that I didn’t enjoy at their age.

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