Holly's Blog: Investment lessons of Westeros
By Mike Narouei, Content Producer at Boring Money
24 May, 2019
WARNING: This blog contains substantially more swearing than normal and some language which will probably offend some readers. Please address any complaints to HBO and George R. R. Martin.
So as Game of Thrones draws its last breath, what can we learn about money from Westeros' finest?
1. "Winter is coming." – Ned Stark
This is how most conversations with a financial adviser will start. Experts usually suggest we gather between 3–6 months’ income in an easy access cash (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/cash/)account for those emergencies and rainy days. Or unexpected mishaps with swords. Don’t just leave it in your current account. Savings Champion have regularly-updated cash Best Buy tables (https://savingschampion.co.uk/best-buys/personal/easy-access).
2. "A Lannister always pays his debts." – Tyrion Lannister.
The clarion call of the Lannisters was probably instrumental in helping them become the richest house in the land (not that it got them very far in the end). Not paying off credit card debt is a key mistake many of us make. Set up direct debits to manage this for you. And have a look at 0% transfer deals if you have chunky interest payments today.
That said, not all debts are bad. Paying off student debt early is not always a good idea and these days many mortgages are cheap.
3. "Everything before the word ‘but’ is horsesh1t." – Jon Snow
Make sure you read the terms and conditions or fees when opening new accounts. If you are talking to an adviser, ask them to spell out in £s what you will pay every year and ask bigger firms if they have exit fees. A few do – and are less than clear about these.
If someone is offering you ‘guaranteed’ returns of figures like 10% or more, I wouldn’t even read to the word ‘but’. NO such thing as a free lunch. Wave goodbye.
4. "Nothing f***s you harder than time." – Ser Davos
This really should be the slogan of HMRC if they want to get youngsters saving into a pension. The more polite way to observe this is to talk about compound interest. But it’s less catchy. It is worth remembering that you can set up a DIY ISA (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/stocks-shares-isa/)or pension (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/private-pension/)online from about £25–£50 a month. Doing this in your 20s is one of the best things you can do. Everyone should check with HR – if they will match your contributions at work, that’s an awesome offer not to be sneezed at.
5. "I would like to die in my own bed, with a belly full of wine and a [whatsy] around my [whatsy], at the age of eighty." – Tyrion Lannister
Rude! We can’t find any pensions providers (https://www.boringmoney.co.uk/isas-pensions/isas-pensions/) who will promise that. But these days we’re living longer than ever so having some sort of concept about what our retirement income looks like (https://www.boringmoney.co.uk/learn/learning-paths/retirement-guide/) is important. A start is to look at what your state pension might be. It gives us an idea of what we’ll need to have saved privately to top this up. Hop onto HMRC’s site and get a forecast (https://www.gov.uk/check-state-pension).
6. "A lion doesn’t concern itself with the opinion of sheep" – Tywin Lannister.
There’s so much uncertainty around. Trade wars. Brexit. Resigning prime ministers. Massive tech firms with massive valuations. Ignore the short-term bleating. We still hear from people who set up investments only to bail after a few months of negative returns and bad headlines. Be a lion not a sheep. Unless you believe in the demise of capitalism, investing in a ‘multi-asset’ shares (or ‘multi-asset equity’) fund (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/funds/)will spread your money around the globe’s largest companies in one fell swoop, and is a sensible, diversified starting point. Enabling a lazy lion approach.
7. "The storms come and go, the waves crash overhead, the big fish eat the little fish, and I keep on paddling." – Lord Varys
Per the above, Lord Varys would have made a very good investor. Boring old paddling is the way to do it. You can drip feed into any investment accounts (https://www.boringmoney.co.uk/isas-pensions/isas-pensions/) rather than dollop chunks in big, wave-like movements. This means you never invest everything when markets are at record highs (i.e. super expensive). Most providers will let you set up a regular monthly direct debit contribution.
8. "I'm going West of Westeros" – Arya Stark
I hope she isn’t relying on changing her money at the airport. Make a decision now before it’s 11pm the day before your summer hols to sort out your currency. Pre-paid cards are good – check out Halifax Clarity or Barclaycard Platinum, which have no fees abroad. I use my Monzo card but avoid ATM withdrawals with this. Avoid your standard debit card like the plague. If it is quite last minute and you want cash, the Post Office deliver currency and their rates are quite decent (https://www.postoffice.co.uk/travel-money-online).
9. "I don’t care about checking my worst impulses. I don’t care about making the world a better place. Hang the world." – Cersei Lannister
Well that attitude didn’t get you very far, did it love? If you are less unpleasant than Ms Lannister, you might be interested in the new wave of socially responsible investment products. And before you curl your lip and assume inferior returns, the thinking has moved on. With an increasingly obvious correlation between good governance and good returns (https://www.boringmoney.co.uk/learn/articles/ethical-investment-isa-2019/) (Metro Bank/Carillion/Volkswagen anyone?) these portfolios are no longer the preserve of ‘hippies’ who don’t care about returns!
10. "All men must die, but we are not men." – Daenerys Targaryen
In case I haven’t offended enough people, let me go out on a blaze of glory. Data does show that female investors make better returns than men. Before you all breathe fire on me for casual sexism, this is a) confirmed by data (https://www.boringmoney.co.uk/learn/articles/women-make-better-investors-than-men/) and b) largely attributable to lower confidence levels leading to less trading/activity, so there is less of a hit on performance from trading fees (https://www.boringmoney.co.uk/learn/articles/2019-online-investment-platforms-performance/). The lesson here is to resist the urge to fiddle.
The only people not offended and still reading will be potty-mouthed female investors who favour socially responsible investments.
I wish all 8 of you a glorious weekend!